Benefit Controversies Archives - EMPLOYEE BENEFITS BLOG

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

by David Quinn Gacioch, Stacey Callaghan, Dana McSherry, Caroline Reignley, Paul Thompson and Sarah Raaii | Jun 15, 2022 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

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

by McDermott Will & Emery | Jun 9, 2022 | Benefit Controversies, Employee Benefits, Employee Stock Ownership Plans (ESOPs), Executive Compensation, Fiduciary and Investment Issues, Retirement 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

by Gero Burwitz and Isabella Denninger | Jun 8, 2022 | Benefit Controversies, Employee Benefits, Employment, Labor

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

by Sarah Raaii and McDermott Will & Emery | Jun 1, 2022 | Benefit Controversies, Employee Benefits, Employment, Executive Compensation, Health and Welfare Plans

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

by Michael B. Kimberly, Sarah P. Hogarth and Andrew Liazos | May 11, 2022 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

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

by Andrew Liazos, Michael B. Kimberly and Charlie Seidell | Apr 28, 2022 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

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

by McDermott Will & Emery | Apr 26, 2022 | Benefit Controversies, Employee Benefits, Employment, Labor, Privacy and Data Security

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

by Evie Atwater, George Tzanetakos and Gregory Fosheim | Apr 7, 2022 | Benefit Controversies, Digital Health, Employee Benefits, Employment, Health and Welfare Plans, Labor

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.

Inflation and ERISA Penalties: Hand in Hand for 2022

by Diane Morgenthaler | Apr 6, 2022 | Benefit Controversies, Employee Benefits, Employee Stock Ownership Plans (ESOPs), Employment, Executive Compensation, Fiduciary and Investment Issues, Health and Welfare Plans, Labor, Retirement Plans

The Federal Civil Penalties Inflation Adjustment Act of 2015 directs the US Department of Labor (DOL) to make annual inflation adjustments to specified Employee Retirement Income Security Act (ERISA) violations. The increased penalties generally apply to reporting and disclosure failures if the penalty is assessed after January 15, 2022, and if the violation occurred after November 2, 2015.

Access the updated DOL penalties.

Issues Mount as Health Plans Offer At-Home COVID-19 Tests

by Jacob Mattinson and Teal Trujillo | Feb 10, 2022 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

The Biden administration’s January guidance that group health plans and insurers cover the costs of at-home COVID-19 tests has rattled insurers and employers. According to this SHRM article, insurers’ data processing systems have had difficulty paying for tests purchased by consumers at pharmacies, and self-insured employers have struggled to identify the best way to pay for tests. McDermott’s Jacob Mattinson, Teal Trujillo and Judith Wethall recently advised plan administrators to work with their third-party administrators to develop a process for coverage of over-the-counter COVID-19 tests and to develop procedures to reduce the risk of participant fraud.

Read more here.

BLOG EDITORS

STAY CONNECTED

TOPICS

ARCHIVES

RECENT POSTS