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.
Jacob M. Mattinson focuses his practice on employee benefits and matters related to 401(k), 403(b), pension, executive compensation, health care reform, and cafeteria and welfare plans. Jacob assists clients in drafting employee benefit plan documents and amendments. He represents clients in matters before the Internal Revenue Service (IRS), US Department of Labor (DOL) and Pension Benefit Guaranty Corporation with respect to plain qualification issues. Read Jacob Mattinson's full bio.
On January 14, 2019, US District Judge Wendy Beetlestone in the US District Court for the Eastern District of Pennsylvania issued a nationwide preliminary injunction blocking the Trump administration’s carveouts to the Affordable Care Act’s (ACA) contraceptive coverage mandate. One day prior, US District Judge Haywood Gilliam in the US District Court for the Northern District of California issued a more limited injunction blocking the same carve outs from taking effect in 13 states plus the District of Columbia.
On October 6, 2017, the Trump administration issued rules that are the subject of these two decisions. The rules would have allowed employers to raise religious and moral objections to avoid the ACA’s requirement that contraceptive coverage be provided without cost sharing under their group health plans. Under the ACA, certain contraceptive products and services are included in the list of preventive services that must be covered by most group health plans without cost sharing. The available exemptions to this rule were limited.
Judge Beetlestone reasoned that the loss of contraceptive coverage would have resulted in “significant” and “proprietary harm” to the states by causing increased use of state-funded contraceptive services, along with increased costs associated with unintended pregnancies. Without the preliminary injunction, the Trump administration’s rules would have gone into effect on January 14, 2019. The preliminary injunction does not permanently block the rules, but rather it stops the rules from going into effect while legal challenges are being pursued. Judge Beetlestone indicated that she is likely to invalidate the rules, stating that the US Departments of Health and Human Services, Labor and Treasury exceeded the scope of their authority under the ACA by issuing the carve outs.
Charnae Supplee, a law clerk in the Firm’s Washington, DC office, also contributed to this post.
Join us Friday, December 7 for our monthly Fridays With Benefits webinar. New proposed rules make the HRA an interesting option for employers beginning in 2020. Join McDermott lawyers for an interactive discussion regarding the “Integrated HRA” the “Excepted Benefit HRA” and the medical plan design opportunities they present.
Join our lively 45-minute discussion while we tackle the following items:
- Can we really get out of the medical coverage game?
- How does the Integrated HRA work?
- What are the next steps?
Friday, December 7, 2018
10:00 – 10:45 am PDT
11:00 – 11:45 am MDT
12:00 – 12:45 pm CDT
1:00 – 1:45 pm EDT
Yesterday, November 15, 2018, the Internal Revenue Service (IRS) increased the annual maximum salary reduction limit for contributions to a health flexible spending account to $2,700. The 2019 contribution limit was published in Rev. Proc. 2018-57. The 2018 contribution limit was $2,650, resulting in an increase of $50 for 2019. An employer may use the increased limit for both health flexible spending accounts and limited purposed health flexible spending accounts that it maintains for its employees.
One of the busiest times of year for an employee benefits professional is open enrollment. It is a crucial and yet stressful time of year that typically results in numerous employee questions and complaints and is a time of year with high potential for both employer and employee mistakes. Despite the stress and potential for problems, open enrollment provides an opportunity for a company to set itself up for success for the following year.
The Employee Retirement Income Security Act (ERISA) does not require an annual opportunity for employees to change benefit plan elections. However, because of compliance issues that can spring from not offering a regular enrollment period, most companies choose to offer an “open enrollment” period, usually taking place in mid- to late fall for calendar-year health and welfare benefit plans.
Employee attention to employer communications during this period is often high, and attention to detail in participant communications behooves an employer during this period. Well-written and timely notices may be relied upon to satisfy many compliance obligations. Inaccurate or incomplete open enrollment materials, however, can create employee confusion and result in legal liability under the complex network of federal laws governing employer-sponsored benefit programs.
Read the full article here for a sampling of key issues to consider to help you avoid compliance missteps during this year’s open enrollment period.
Originally published in BenefitsPRO.com, October 2018.
Recently the Internal Revenue Service (IRS) and the Social Security Administration announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the Social Security wage base for 2019. The table below compares the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2018 and 2019.*
UPDATE: On Thursday, November 11, 2018, the Internal Revenue Service announced that, for calendar year 2019, the annual maximum salary reduction limit for contributions to a health flexible spending account was increased by $50 to $2,700.
|RETIREMENT PLAN LIMITS||2018||2019|
|Annual compensation limit||$275,000||$280,000|
|401(k), 403(b) & 457(b) before-tax contributions||$18,500||$19,000|
|Catch-up contributions (if age 50 or older)||$6,000||$6,000|
|Highly compensated employee threshold||$120,000||$125,000|
|Key employee officer compensation threshold||$175,000||$180,000|
|Defined benefit plan annual benefit and accrual limit||$220,000||$225,000|
|Defined contribution plan annual contribution limit||$55,000||$56,000|
|Employee stock ownership plan (ESOP) limit for determining the lengthening of the general five-year distribution period||$220,000||$225,000|
|ESOP limit for determining the maximum account balance subject to the general five-year distribution period||$1,105,000||$1,130,000|
|HEALTH AND WELFARE PLAN LIMITS|
|Health Flexible Spending Accounts|
|Maximum salary reduction limit||$2,650||$2,700|
|High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA)|
|HDHP – Maximum annual out-of-pocket limit (excluding premiums):|
|HDHP – Minimum annual deductible:|
|HSA – Annual contribution limit:|
|Catch-up contributions (age 55 or older)||$1,000||$1,000|
|SOCIAL SECURITY WAGE BASE|
|Social Security Maximum Taxable Earnings (dollars)||$128,400||$132,900|
Plan sponsors should update payroll and plan administration systems for the 2019 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, like open enrollment materials and summary plan descriptions.
For further information about applying the new employee benefit plan limits for 2019, contact your regular McDermott lawyer.
*The dollar limits are generally applied on a calendar year basis; however, certain dollar limits are applied on a plan-year, tax-year, or limitation-year basis.
President Trump signed an executive order last year directing the Secretaries of Labor, Treasury and Health and Human Services to consider proposing regulations to “increase the usability of HRAs.” This month, the collective departments issued proposed regulations containing changes to the prohibition on pairing HRAs with individual health policies, as well as other changes to the current HRA rules.
Proposed effective date January 1, 2020; comments due December 28, 2018.
The US Department of Labor published a final rule that makes it easier for a group or association of employers to act as a single “employer” sponsor of an Association Health Plan under ERISA. By creating an opportunity for small employers and self-employed individuals to take advantage of the economies of scale that are usually enjoyed by large employers, the final rule is intended to expand access to affordable health care.
New proposed guidance on mental health parity issued last month spotlights the complexities of these rules. Join us for out next Fridays with Benefits webinar on June 1 as Jacob M. Mattinson and Judith Wethall discuss the impact these rules will have on group health plans and how to determine if your plan complies. Find out about recent litigation and agency enforcement actions.
Friday, June 1st, 2018
10:00 – 10:45 am PDT
11:00 – 11:45 am MDT
12:00 – 12:45 pm CDT
1:00 – 1:45 pm EDT
On May 10, 2018, the IRS announced cost-of-living adjustments to the applicable dollar limits for health savings accounts and high-deductible health plans for 2019. Many of the limits will change for 2019.