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What Employers Should Do Now That Roe Has Fallen

The monumental decision by the Supreme Court of the United States in Dobbs v. Jackson Women’s Health Organization to overturn Roe v. Wade presents significant challenges for employers and health plans. According to this Law360 article, employers should begin reviewing state laws, evaluating internal company policies, gauging employee reactions and preparing for legal challenges. McDermott’s Sarah Raaii called the Supreme Court’s decision “an administrative and potentially employee relations nightmare for employers.”

“It creates a lot of challenges for employers who just want to do right by their employees and continue offering these abortion benefits that they have historically done in the past,” Raaii said.

Access the article.




The Overturning of Roe v. Wade

On June 24, 2022, the Supreme Court of the United States issued its decision in Dobbs v. Jackson Women’s Health Organization (Dobbs), overturning Roe v. Wade (Roe) and upending 50 years of precedent protecting a woman’s right to privacy in choosing to abort a pregnancy prior to the point of viability.

The effect of this decision on US companies cannot be understated. Any organization whose operations touch family planning services in any way (e.g., providers, those that facilitate operations, investors, payors, employers that provide family planning benefits and health plan service providers) should immediately examine their precise services, geographic footprint, corporate structure and organizational priorities.

To determine the best steps to take for you and your business, we invite you to join us for the second program in our new webinar series on Wednesday, June 29, at 2:00-3:00 pm EDT with McDermott Partners Stacey Callaghan, David Gacioch and Caroline Reignley and Associate Sarah Raaii, who will analyze and share the latest developments around the reversal of Roe and its likely impacts on US companies.

Register for the webinar here.




Preparing for the Demise of Roe v. Wade and the Criminalization of Abortion in Some US States: Practical Considerations for a Post-Roe World

Sometime in the next several weeks, the Supreme Court of the United States will issue its decision in Dobbs v. Jackson Women’s Health Organization (Dobbs). Based on the draft majority opinion authored by Justice Samuel Alito that was leaked to Politico in early May, there is a significant chance that the Court will overrule Roe v. Wade (Roe) and Planned Parenthood v. Casey (Casey) by holding that there is no federal constitutional right to obtain an abortion and leaving individual states free to substantially restrict abortion or prohibit abortion altogether.

The effect of this likely decision on US companies would be substantial. Every US healthcare provider whose services include any aspect of family planning should give serious thought to how this likely new post-Roe reality will affect its offerings and operations. This includes not only those that provide pregnancy termination services (via surgical or pharmaceutical means, whether brick-and-mortar or telehealth/virtual), but also potentially those providing in vitro fertilization services, and conceivably even some contraceptive providers at some point down the line.

Read more here.




Understanding a Trustee’s Role in Management Incentive Plans

On May 5, 2022, McDermott Partner Erin Turley delivered a presentation during the 2022 TEA National Conference titled “Understanding a Trustee’s Role in Management Incentive Plans.” Her presentation focused on the trustee’s role in Management Incentive Plans (MIPs), how retention and performance stock appreciation rights (SARs) impact an employee stock ownership plan (ESOP) and ways to avoid trustee pitfalls with a MIP. Erin also discussed types of synthetic equity design decisions, incentive stock options, non-statutory stock options and phantom stock/SARs.

The presentation concluded with the following fiduciary considerations:

  • Since the issuance of any equity or synthetic equity can have a potentially dilutive impact on the ESOP, it is important for any plan to be in the best interest of the ESOP plan participants.
  • As a result, one of the primary objectives of the plan should be to identify and select a group of people to be incentivized and rewarded to drive value for everybody.
  • For example, in the case of a SAR, you are rewarding a group of individuals based only on appreciation in the value of the company stock. If the value goes up, that’s good for everybody.
  • The overall compensation program should be in line with compensation practices for comparable-type positions in the industry, perhaps taking geography into account.

For questions about employee benefits matters, please contact Erin or McDermott’s employee benefits practice team.




German Tax Aspects of Cross-Border Remote Working

As a result of the COVID-19 pandemic, remote working became a necessity. Despite the easing lockdowns, the trend is likely to stay, particularly with “workstations” being actively promoted by the travel industry; however, there are considerable tax consequences for international employers. In this International News article, McDermott’s Gero Burwitz and Isabella Denninger discuss the complexity of this new working order and how international businesses can navigate it.

Access the article (pg. 11).




Employers Explore Abortion Coverage Continuation

While the United States awaits the Supreme Court’s ruling in Dobbs v. Jackson, which may overturn Roe v. Wade and eliminate the federal standard for abortion access, some states are considering setting their own standards that would ban or protect the medical procedure. This state-by-state rulemaking will cause some difficulty for employer plans, and employers are increasingly exploring ways to continue providing abortion coverage.

Read more here.




ERIC Petitions US Supreme Court on Seattle Healthcare Case

McDermott Will & Emery’s Michael B. Kimberly, Sarah P. Hogarth and Andrew C. Liazos, are co-counsel on a petition for certiorari before the Supreme Court of the United States on behalf of the ERISA Industry Committee (ERIC). The petition calls for review of ERIC’s legal challenge to the City of Seattle’s hotel healthcare “play or pay” ordinance. The ordinance mandates hospitality employers make specified monthly healthcare expenditures for their covered local employees if their healthcare plans do not meet certain requirements. The petition demonstrates that Seattle’s ordinance is a clear attempt to control the benefits provided under medical plans in violation of the preemption provision under the Employee Retirement Income Security Act of 1974, as amended (ERISA). This case is of significant national importance. Several other cities have proposed making similar changes, and complying with these types of ordinances will substantially constrain the ability of employers to control the terms of their medical plans on a uniform basis. ERIC’s petition is joined by several trade associations, including the US Chamber of Commerce, the American Benefits Council and the Retail Industry Leaders Association.

Read ERIC’s petition for writ of certiorari here.

Read ERIC’s statement here.




ERIC Files Amicus Brief Rebutting DOL Attempt to Create New Regulations in Lawsuit

McDermott Will & Emery’s Andrew C. Liazos, Michael B. Kimberly and Charlie Seidell recently filed an amicus brief in the US Court of Appeals for the 10th Circuit on behalf of the ERISA Industry Committee (ERIC). McDermott filed the brief in response to a US Department of Labor (DOL) amicus brief that advanced a novel interpretation of its regulations which, if adopted through litigation, would change longstanding procedures for benefit determinations under self-funded medical plans sponsored by large employers. The amicus brief focuses on key arguments against the DOL’s attempted regulatory reinterpretation, including that:

  • DOL may not rewrite its regulations outside of notice-and-comment rulemaking;
  • DOL’s interpretation of its own regulations is inconsistent with the plain text of the regulations;
  • There are good policy reasons underlying differential treatment of healthcare and disability benefits determinations; and
  • DOL’s interpretation of the regulations in its amicus brief is not entitled to deference under the Supreme Court decision in Kisor.

Read ERIC’s amicus brief here.

Read ERIC’s statement here.




The Challenges and Opportunities of Hybrid Work

What are some of the challenges and opportunities of hybrid work arrangements? In this Lexology GTDT Market Intelligence article, McDermott Partner Carole Spink offers insight about tracking remote work, navigating local rules, and protecting confidential and propriety information.

Access the article.




Biden Administration Foreshadows Impending Nursing Home Quality Reforms

On February 28, 2022, the White House issued a fact sheet outlining several efforts aimed to increase safety, accountability, oversight and transparency in the senior services industry (Fact Sheet). Although the Fact Sheet’s initiatives have not yet been implemented, President Biden reiterated his administration’s focus on nursing home reform during his March 1, 2022, State of the Union address. Accordingly, the efforts described in the Fact Sheet provide stakeholders with a peek into the regulatory crystal ball of the governmental efforts that may be forthcoming, either through new laws, regulatory action, policy changes, enforcement activities or subregulatory guidance.

Read more here.




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