In a presentation for the National Center for Employee Ownership (NCEO) Conference, Emily Rickard presented on ESOP plan design, operation and administration. She, along with the other presenters, identified ERISA compliance watchdogs including the plaintiff’s bar, Department of Treasury and Department of Labor, and what attracts their attention when it comes to audits. Emily also identified common mistakes employers make during the entire ESOP lifecycle (e.g. lack of employee communication, distribution strategy and planning) and provided guidance on how to correct those mistakes.
Join us Friday, April 19 as Erin Turley and Judith Wethall discuss some of the innovative strategies organizations are employing to achieve transparency, reduce fees and provide enhanced offerings when negotiating multi-year health and welfare benefit plan contracts.
Our lively 45-minute discussion will cover emerging trends you can leverage at the negotiating table, including
- Pharmacy Pricing Transparency
- Data Access/Ownership Rights
- Performance Guarantees and Other Rebates
Friday, March 15, 2019
10:00 – 10:45 am PST
11:00 – 11:45 am MST
12:00 – 12:45 pm CST
1:00 – 1:45 pm EST
On March 28, a District of Columbia federal court agreed with a New York-led challenge by a group of 11 states and the District of Columbia and found that the Department of Labor’s (DOL) 2018 association health plan (AHP) rule (the Final Rule):
- Is contrary to the Employee Retirement Income Security Act of 1974 (ERISA)’s text and purpose; and
- Circumvents the protections and standards of the Affordable Care Act (ACA).
The decision, penned by Judge Bates, may act to deal a significant blow to the Trump administration’s attempt to expand coverage for small employers. Crafted in response to the October 12, 2017, executive order directing the DOL to promote the availability of AHPs, the Final Rule materially relaxed the standards for qualifying as an AHP under ERISA.
As further described here, the Final Rule sets forth the criteria pursuant to which a “bona fide group or association of employers” may establish a single-employer AHP under ERISA. Under the Final Rule, employers, associations and sole proprietors (referred to as “working owners”) can participate in AHPs provided certain arguably subjective requirements are satisfied. The states challenged the Final Rule, arguing that the DOL unreasonably expanded ERISA’s definition of employer. Applying the Chevron standard, the court agreed with the states to hold that the DOL unlawfully expanded ERISA’s definition of employer by failing to provide a “meaningful limit on the associations that would qualify as ‘bona fide’ ERISA ‘employers.’” The court vacated the bona fide association and working owner provisions of the Final Rule, but also provided some specific critiques and ordered the DOL to determine whether any part of the Final Rule can be salvaged; for now, the Final Rule is in limbo.
In a set of Questions and Answers issued April 2, 2019, the DOL noted that it disagrees with the court’s decision, and is considering all available options in consultation with the Department of Justice (DOJ). The DOJ has until May 28 to file a notice of appeal. The Trump administration could seek a stay of the order pending resolution of any appeal. Unless a court issues a stay, the regulations in effect prior to the Rule would be in effect. Stay tuned for further guidance and developments.
The US District Court for the District of Colorado granted partial summary judgment to 401(k) fiduciaries, holding that ERISA’s six-year statute of repose barred some claims and rejecting challenges to the plan’s fees.
Proposed regulations will alter which white-collar employees remain overtime exempt. Staying vigilant on Fair Labor Standards Act compliance is critical; read on to learn more on proposed increases to the minimum salary necessary to qualify for the executive, administrative or professional exemptions.
In one of the first ERISA cases to address claims against fiduciaries for excessive health plan fees, the court entered judgment in favor of the defendants on all counts. The decision addresses health plan fiduciary standards for reviewing plan fees and expenses.
In a presentation at McDermott’s Employment and Employee Benefits Forum, Ted Becker and Chris Scheithauer explored the various ways that disgruntled employees file lawsuits with plaintiffs’’ lawyers. Lawsuits have been brought in cases alleging, imprudence in the management of plans, challenging fees, involving company stock, actuarial equivalence and more. They used recent cases such as, NYU, American Century Services and IBM, as examples of the various types of lawsuits and the important lessons employers can take away from them. In addition, they provided attendees with key strategies to minimize exposure to lawsuits, including demonstrating a thoughtful and deliberative decision-making process.
Looking ahead to 2019, they touched on ERISA issues to watch for including, venue/forum selection clauses in plan documents, arbitration agreements and impact on fiduciary duty claims, statute of limitations and burden of proof issues.
In an Information Letter dated February 27, 2019, the Department of Labor (DOL) clarified that an ERISA plan must include any procedures for designating authorized representatives in the plan’s claims procedure and summary plan description (SPD) or in a separate document that accompanies the SPD. In response to a request by a patient advocate and health care claim recovery expert for plan participants and beneficiaries, the DOL reiterated that the claims procedure regulations permit authorized representatives to receive notifications in connections with an ERISA plan’s claim and appeal determinations, and noted that a plan’s claims procedure cannot prevent claimants from choosing who will act as their representative for purposes of a claim and/or appeal. ERISA plan sponsors should review plan documents to ensure that the applicable documents clearly outline any steps a participant or beneficiary must take to validly designate an authorized representative under the plan.
In a presentation at McDermott’s Employment and Employee Benefits Forum, Jeffrey Holdvogt discussed qualified plans, including student loan repayment benefits and the rise of DOL/IRS/PBGC plan activity. He also commented on the scrutiny on plan governance and fiduciary process materials. He addressed the legal challenges and mandates, such as state laws protecting against balance billing by out-of-network providers.
The District of Massachusetts court struck the plaintiffs’ jury-trial demand in their ERISA complaint for damages and equitable relief against 401(k) plan fiduciaries. The court followed the “great weight of authority” in ruling that there is no right to trial by jury in ERISA actions for breach of fiduciary duty.