Archives: Employee Benefits

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Senate Republicans Unveil ACA Repeal Bill

Last week, Senate Republicans unveiled draft legislation to move toward repealing portions of the Affordable Care Act (ACA). The draft health care bill, known as the Better Care Reconciliation Act, was hatched behind closed doors without public committee hearings or debate, in response to concerns raised by the House’s American Health Care Act (AHCA), which … Continue Reading

Proposed Changes to § 409a Regulations: Greater Clarity and Better Planning Alternatives

Andrew Liazos and Allison Wilkerson wrote this bylined article on Tax Code Section 409A’s deferral and payment requirements for nonqualified deferred com­pensation plans. Recent IRS Section 409A guidance makes “several helpful changes that employers will want to consider and take advantage of,” the authors wrote, and they warned employers that they ignore final IRS “at … Continue Reading

The Quandary of Publicly-Traded Employer Stock in a 401(k) Plan

Offering employer stock in a 401(k) plan investment lineup can seem like a win-win situation. It can enable employees to become company owners—real, skin-in-the-game, participants in their employer’s economic future—through a simple deferral election. The U.S. Supreme Court has even recognized the value of employer stock funds, confirming that Congress sought to encourage their creation … Continue Reading

District Court Dismisses Shareholder Claim that Equity Award Share Withholding Triggers Section 16(b) Liability

A US District Court recently dismissed a claim that an insider’s election to satisfy an income tax obligation by having shares withheld from the delivery of an award constituted a non-exempt sale of shares back to the issuer for purposes of Section 16(b) of the Exchange Act, unless the share withholding was required, rather than … Continue Reading

Amy Gordon and Susan Nash Named Top Authors in JD Supra’s 2017 Readers’ Choice Awards

Amy Gordon and Susan Nash were recognized as top authors by JD Supra’s 2017 Readers’ Choice Awards for their thought leadership pieces in the Defense & Space Industry and Affordable Care Act (ACA) categories. In addition, Amy’s article, along with Sarah Raaii and Jamie Weyeneth, “Recent Government-Issued FAQs Clarify ACA Employer Mandate, Market Reforms” was … Continue Reading

Supreme Court Rules in Favor of Church-Affiliated Hospitals in Church Plan Litigation

In a major victory for church-affiliated hospitals, the US Supreme Court overturned three appellate court rulings and decided unanimously that church-affiliated hospitals can maintain their pension plans as “church plans” exempt from the Employee Retirement Income Security Act of 1974, as amended (ERISA), regardless of whether a church actually established the plan. Impacted health systems, … Continue Reading

Proposed 457(f) Regulations: Opportunities and Challenges

The 2016 proposed regulations significantly expanded 457(f) plan sponsors’ ability to permit elective deferrals, use noncompetition agreements and make larger severance payments than otherwise permitted under 409A without immediate taxation to participants. In a recent presentation, Ruth Wimer, Mary Samsa and Joseph Urwitz discuss the surprising opportunities with respect to tax-exempt and governmental entities’ “ineligible … Continue Reading

Partial Victories to Two Universities in Their Motions to Dismiss Code Section 403(b) Fee Litigation

Multiple large, class action lawsuits have been filed against prominent higher education institutions claiming fiduciary breaches under their Code Section 403(b) plans as a result of insufficient oversight of plan investments, which allegedly caused excessive fees to be paid by participants. Last week, district courts in Georgia and North Carolina, respectively, ruled on defendants’ motions … Continue Reading

The Future of Discretionary Clauses in California Life and Disability Insurance Agreements

On May 11, 2017, the United States Court of Appeals for the Ninth Circuit reversed a district court ruling, and upheld a California law that invalidates a plan provision that assigns the final determination on benefit payout determinations to an insurer. How will this impact the future of discretionary clauses in California life and disability … Continue Reading

Executive Order Regarding Contraceptive Mandate Directed toward Religious Employers

Late last week, President Donald Trump signed an executive order directing federal agencies to look into exempting religious employers from the Affordable Care Act’s (ACA) contraceptive mandate. Qualifying religious employers (e.g. houses of worship) are already exempt from providing contraceptive coverage under their benefit plans, and an accommodation process is provided for certain non-profit employers … Continue Reading

Upcoming Employee Benefits Innovators Roundtable Series!

McDermott will be holding its annual Employee Benefits Innovators Roundtable Series this month. The roundtables offer experienced benefits professionals an opportunity to discuss cutting-edge, topical employer-driven benefit programs with their peers and members of McDermott’s employee benefits team. We are meeting in four locations this year. Join us in one of the following cities: May … Continue Reading

IRS Implementation of ACA’s Employer Shared Responsibility Provision Falls Short Based on the Results of a Recent Audit

Based on a recent audit conducted by the Treasury Inspector General for Tax Administration (TIGTA), the IRS’ processes and procedures to ensure compliance with the employer information reporting requirements mandated by the employer shared responsibility provision (the play or pay rules) of the Affordable Care Act (ACA), have fallen short of their intended goals. (see … Continue Reading

State-Run Retirement Plans – What Labor Allowed

With approximately 68 million US employees without access to a retirement savings plan through an employer, there has been increased movement by states to sponsor retirement type arrangements for private sector employees. Partner Andrew Liazos presented “State-Run Retirement Plans – What Labor Allowed” discussing insights and strategies for retirement, health and executive compensation plans. He … Continue Reading

Employee Benefits Programs in May

Join members of the McDermott Employee Benefits team in May at one of these programs covering a variety of employee benefits topics. The John Marshall Law School The Center for Tax Law & Employee Benefits 14th Annual Employee Benefits Symposium | May 1, 2017 | Chicago, Illinois | Speaker, Joseph S. Adams Proposed 457(f) Regulations: Opportunities and … Continue Reading

Puerto Rico Legislation May Require Changes to Retirement Plans

Puerto Rico enacted new legislation in February that will require changes to tax-qualified retirement plans covering Puerto Rico employees, including both Puerto Rico-only and dual-qualified (US and Puerto Rico) retirement plans. Act No. 9-2017 revises a number of Puerto Rico qualified retirement plan rules including contribution limits, rules related to nondiscrimination testing and employer deductions … Continue Reading

IRS Issues Revised Requirements for Employers to Claim FICA Tax Refunds

On March 20, 2017, the Internal Revenue Service (IRS) issued Revenue Procedure 2017-28, which provides guidance to employers on obtaining employee consents used to support a claim for credit or refund of overpaid taxes under the Federal Insurance Contributions Act (FICA) and the Railroad Retirement Tax Act (RRTA). This OTS describes the new procedures and … Continue Reading

IRS Will Now Permit DC Plan Hardship Withdrawal Self-Certification Summaries

Two recently published memoranda by the Internal Revenue Service (the IRS) indicate that it is permissible for 401(k) and 403(b) plan sponsors and their third party administrators (TPAs) to rely on participants’ written summaries describing their financial hardships when processing hardship withdrawals from plans that apply the safe harbor event rules. Plan sponsors and TPAs … Continue Reading

View From McDermott: Employee Benefit Plan Considerations for Health Systems in 2017

Amy Gordon, Jeffrey Holdvogt, Susan Nash and Mary Samsa wrote this bylined article on health system employee benefit opportunities and challenges in 2017. The authors urged health systems to review internal controls for 403(b) plan compliance and new design opportunities for 457(f) plans, to review their short- and long-term health plan operation in light of … Continue Reading

Private Equity Compliance with ERISA: Navigating Manager Fiduciary Duties for Funds Holding ERISA Plan Assets

On February 28, Todd Solomon and Maureen O’Brien presented a Strafford live webinar, “Private Equity Compliance With ERISA: Navigating Manager Fiduciary Duties for Funds Holding ERISA Plan Assets”. ERISA imposes fiduciary obligations on funds that hold employee benefit plan assets, including private equity managers responsible for investing fund assets. Managing those fiduciary obligations requires knowledge … Continue Reading
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