A lawsuit against Vanderbilt University is moving forward based on allegations that the university and its fiduciaries mismanaged its retirement plan by paying excessive fees and maintaining poor investment options.

In that lawsuit, Cassell v. Vanderbilt et al., plaintiffs filed a 160-page complaint alleging multiple violations of ERISA. Cassell v. Vanderbilt, No. 3:16-cv-02086 (M.D. Tenn. Jan. 5, 2018). Cassell is one of numerous class action lawsuits that have been filed against prominent universities based on similar allegations. The lawsuits allege that Internal Revenue Code Section 403(b) plan fiduciaries breached duties of prudence and loyalty, and engaged in prohibited transactions. Vanderbilt University, like other schools, filed a motion to dismiss the claims. The court granted part of its motion, but allowed the rest of the lawsuit to proceed.

Continue Reading 403(b) University Cases Move Forward: Cassell v. Vanderbilt University

If an employer has employees in San Francisco and is subject to the Health Care Security Ordinance (HCSO), the employer must submit its 2017 Annual Reporting Form by April 30, 2018.  Failure to timely submit a report could expose employers to penalties of up to $500 per quarter. To begin, obtain your company’s San Francisco business identification number and submit your report online here.

If you are not sure whether you are subject to the San Francisco’s HCSO, reach out to the author or your regular McDermott attorney.

What if you didn’t have to take time out of your day to see a physician in person when you needed a prescription? What if a diagnosis could be delivered over video chat? What if your psychiatrist was available at the press of a button or swipe on your screen?

These options are fast becoming a reality, as telehealth (or telemedicine) continues to take hold in a health care system that is desperate for increased efficiency and higher quality outcomes. And while telehealth offers exciting new possibilities in terms of convenience and access for patients, it also poses new regulatory challenges for industry stakeholders still learning the new rules of the game in today’s digital health ecosystem.

The Chronic Care Act

One of the biggest drivers of change in the industry right now is the Chronic Care Act. Last month, as part of the House and Senate budget deal to fund the government through March 23, legislators included the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, which will increase reimbursement for a lot of different telemedicine programs.

For example, if you went to a rural hospital and they didn’t have a stroke neurologist and you were having a stroke, you would have an ED doctor with no stroke specialty diagnosing you—not an ideal situation. With telemedicine, it’s now possible for rural doctors to consult with specialty doctors at renowned sites, which the government will fund thanks to the Chronic Care Act. Continue Reading Telehealth and the Changing Regulatory Landscape: Opportunities and Challenges in the Digital Health Ecosystem

The US Department of Labor has taken the position that certain indemnification clauses are void against public policy under Section 410 of ERISA. This policy has been adopted by private plaintiff classes; as evident from a recent settlement, a policy that voids indemnity provisions can limit defense budgets, make settlements more likely and potentially create dangerous precedent for ESOPs.

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Partner Diane Morgenthaler presented at this year’s first Tax in the City® meeting on March 15, 2018. Below is a recap of the key takeaways from the event.

Employee Benefits impacts of federal tax reform:

  1. Alter procedures to ensure no 2018 employer deduction is taken for qualified transportation fringe benefits, except for bicycle transportation subsidies.
  2. Alter procedures to ensure no 2018 employer deduction is taken for “entertainment” and its related travel and meal expenses, including sporting events, theatre, golf, and other activities.
  3. Analyze 2018 financial effect to your employer of any proposed gross ups for loss of moving expense deduction for employer and employee.
  4. If your employer is a US publicly traded company, a foreign issuer with US publicly traded American Depository Receipts (ADRs), or a private company with US publicly traded debt, then careful legal and financial planning is recommended to try to utilize the grandfather exception to the $1M compensation deduction limit under Code section 162(m).

View full presentation.

The PBGC’s missing participants program, which previously applied only to single-employer defined benefit pension plans, has been expanded to defined contribution plans, multiemployer defined benefit plans and small professional service defined benefit plans that end on or after January 1, 2018. The revised program provides a helpful alternative for plan administrators of terminating defined contribution plans, and also includes welcome clarifications that enhance the program available to defined benefit pension plans.

Access the full article.

Todd Solomon urged employers to “get past” a reluctance to deal with transgender employee concerns and “press the issue in order to create a comfortable and inclusive environment” in the workplace. “Support for LGBT employees must come from the top down in order to be effective, and it has to be evidenced by concrete actions in addition to mere words,” Mr. Solomon stated.

Read the full article.

Originally published in The SHRM Blog (Society for Human Resource Management), March 26, 2018.

Partners Mary Samsa and Joe Urwitz discuss the new challenges created for tax-exempts in compensating their executives given the new 21 percent excise tax on pay over $1 million. Now is the time for tax-exempts to be evaluating potential tax planning opportunities for structuring pay to avoid application of the 21 percent excise tax.

Avoid the culture wars and legal issues post-transaction. Join our lawyers Kristin E. Michaels, Maureen O’Brien and moderator Judith Wethall for a discussion of how to best integrate employees and employee benefit plans after a transaction.

Register Today.