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Rick Stepanovic focuses his practice on employee benefits and executive compensation matters. He has experience working on matters related to tax-qualified pension plans, health and welfare plans, and deferred compensation arrangements. He also has experience handling correction and administrative matters before the Internal Revenue Service and the Department of Labor. Read Rick Stepanovic's full bio.

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.

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Join us Friday, November 2 for our monthly Fridays with Benefits webinar. With 2019 right around the corner, now is the time to dust off your year-end checklist and take stock of changes we have seen in 2018, and how they project to impact planning for the new year. Join us for an interactive discussion designed to draw attention to the key employee benefits issues you should tackle before New Year’s Eve. Our lively 45-minute discussion will include a tax reform update, an overview of retirement plan disaster relief, responding to new disability regulations from the DOL, and how to implement final regulations on QNECs and QMACs.

Friday, November 2, 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

Register now.

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.

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The US Court of Appeals for the Sixth Circuit ruled on March 7, 2018, that workplace discrimination on the basis of gender identity and gender expression violates Title VII of the Civil Rights Act of 1964. The language of Title VII does not expressly prohibit discrimination on the basis of gender identity. However, the US EEOC has taken a broad approach to enforcing Title VII’s prohibition on sex discrimination, arguing that it includes both gender identity and sexual orientation.

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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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On February 26, 2018, the US Court of Appeals for the Second Circuit (covering Connecticut, New York and Vermont) ruled that workplace discrimination on the basis sexual orientation violates Title VII of the Civil Rights Act of 1964 (Title VII).

The language of Title VII does not expressly prohibit discrimination on the basis of sexual orientation. However, in 2015, the US Equal Employment Opportunity Commission (EEOC) took the position that Title VII prohibits sexual orientation discrimination under the purview of prohibited sex discrimination. In 2016, the EEOC began filing sexual orientation discrimination lawsuits enforcing that position.

Circuit courts are divided on the question of whether claims of sexual orientation discrimination are viable under Title VII. In March of 2017, the Eleventh Circuit held that sexual orientation discrimination does not violate Title VII. The Seventh Circuit held the opposite the following month, and the Supreme Court declined to decide the split in December. With its en banc decision in Melissa Zarda et al. v. Altitude Express, dba Skydive Long Island, et al., the Second Circuit sided with the EEOC and the Seventh Circuit.

As a result of the decision, employers may see increased litigation in the area of sexual orientation discrimination. To protect against potential lawsuits, employers should consider updating their nondiscrimination policies to prohibit discrimination on the basis of sexual orientation and gender identity. In addition, employers should perform sexual orientation harassment training for employees and managers.

The decision also raises potential concerns for employee benefit plans. Although the Employee Retirement Income Security Act of 1974, as amended (ERISA) generally preempts state laws that relate to employee benefit plans, ERISA does not preempt other federal laws, including Title VII. While certain spousal benefits and rights under qualified retirement plans are required by federal law to be extended to same-sex spouses, the same explicit mandates do not apply to welfare plans. Employers should consider whether any of their employee benefit plans discriminate against employees with same-sex spouses (e.g., excluding same-sex spouses from coverage under a self-funded medical plan). Such distinctions may be ripe for legal action as a result of the decision and the EEOC’s ongoing enforcement efforts.

The Department of Labor announced increased penalties for employee benefit plans under ERISA. The increases generally apply to penalties that involve employee benefit reporting and disclosure failings if the penalty is assessed after January 2, 2018, and if the violation occurred after November 2, 2015. We’ve compiled a resource outlining the ERISA penalty amounts assessed for violations on or before January 2, 2018, and those amounts assessed after January 2.

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The new tax reform legislation includes important changes to the tax treatment of employer-sponsored benefit programs, including transportation benefit programs and moving expense reimbursements. The law also creates a new tax credit for employers who provide paid family and medical leave to their employees.

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Through a series of recent settlements, the US Department of Labor has outlined the process steps fiduciaries should follow in connection with a transaction involving a purchase from, or sale to, an employee stock ownership plan.

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