Employee Benefits Archives | Page 64 of 153

Once Again, IRS Extends Nondiscrimination Relief for Frozen Defined Benefit Plans

by Alan D. Nesburg, PC and Charnae Supplee | Sep 19, 2019 | Employee Benefits, Retirement Plans

The Internal Revenue Service (IRS) has once again extended the temporary nondiscrimination relief for frozen defined benefit plans, now through 2020. Frozen pension plans are pension plans that have been closed to new participants but continue to provide ongoing benefit accruals for certain participants. This extended relief is intended to enable frozen pension plans to satisfy certain nondiscrimination testing requirements. In most cases, the relief allows the frozen defined benefit plan to be aggregated with a defined contribution plan to satisfy the nondiscrimination testing requirements. The relief assists the aggregated plan in passing nondiscrimination requirements that apply to accrued benefits and to certain rights and features relating to those benefits.

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PBGC’s Multiemployer Insurance Program Faces Insolvency, While Single-Employer Program Improves

by Charnae Supplee and Stephen Pavlick | Sep 17, 2019 | Employee Benefits, Retirement Plans

The Pension Benefit Guaranty Corporation (PBGC) recently issued a press release announcing that the Multiemployer Insurance Program remains in a dire financial condition, nearing insolvency. The agency’s insurance program for multiemployer pensions, covering more than 10 million people, will likely run out of money by the end of fiscal year 2025, according to the FY 2018 Projections Report. On the other hand, the PBGC’s projection for the Single-Employer Program shows continued improvement. However, these positive projections are subject to a range of potential outcomes due to the Program’s sensitivity to economic conditions.

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Tyll v. Stanley Black & Decker: When Plan Ambiguity Cost an Employer $4 Million

by Elizabeth M. Rowe, Jacob Mattinson and J. Christian Nemeth | Sep 12, 2019 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

An employer learned the full cost of ambiguity when a Connecticut federal district court agreed with an employee’s widow that the word “maximum” was ambiguous in the company’s life insurance plan, thus making the widow entitled to an additional $4 million in benefits. This decision serves as a warning for employers sponsoring insured benefits.

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Federal Court Certifies Class in Multiple-Plan ERISA Challenge to Health-Plan and Retirement-Plan Fees

by Richard J. Pearl | Sep 10, 2019 | Benefit Controversies, Employee Benefits, Fiduciary and Investment Issues, Health and Welfare Plans, Retirement Plans

A Texas federal court certified a class in case brought by participants in one plan, and allowed those participants to represent participants in unaffiliated plans. The claims alleged that the defendants, who marketed and provided services to all of the plans, breached fiduciary duties by imposing excessive fees. See Chavez, et al. v. Plan Benefits Services, Inc., et al., No. AU-17-CA-00659-SS, United States District Court for Western District of Texas (Aug. 30, 2019).

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Ninth Circuit Answers Some Questions About Arbitration of ERISA Claims

by Richard J. Pearl | Sep 5, 2019 | Benefit Controversies, Employee Benefits, Retirement Plans

In two opinions—one published and one unpublished—the Ninth Circuit overturned prior precedent and held that a Plan amendment requiring arbitration meant that an individual had to arbitrate, on an individual basis, purported class claims alleging imprudent and disloyal management of 401(k) investments. This decision, although unpublished, provides support for plans wishing to add binding arbitration provisions that apply to ERISA 502(a)(2) claims.

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Transgender Health Benefits: Best Practices and Legal Considerations

by Erin Steele, Jacob Mattinson and Todd Solomon | Sep 3, 2019 | Employee Benefits, Employment, Health and Welfare Plans

A growing number of medical organizations, courts and administrative bodies have stated that transition-related medical care is medically necessary and should be covered by employer-sponsored medical plans. Access to employer-sponsored healthcare coverage for transgender workers has become an issue of focus for civil rights advocacy groups such as Lambda Legal and the American Civil Liberties Union, and there has been an uptick in discrimination lawsuits filed against health plans and insurers denying such care.

These trends highlight the importance of weighing the legal and business considerations that come with providing (or not providing) comprehensive health benefits for transgender workers. Health plan sponsors and insurers should consider how the decision to provide or exclude transition-related medical coverage will affect their legal compliance, overall costs and workplace culture—all of which are discussed in this article.

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Originally published in Benefits Magazine, August 2019.

Third Circuit Upholds Decision Blocking Trump Administration’s Birth Control Rules

by McDermott Will & Schulte | Aug 29, 2019 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

A Third Circuit appeals panel upheld the lower court ruling in Commonwealth of Pennsylvania v. President United States of America et al. No. 17-3752. This ruling grants a nationwide preliminary injunction against the religious and moral exemptions for employers to the ACA’s birth control mandate, so employers may want to take a cautious approach toward limiting contraceptive coverage.

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Teal Trujillo, a summer associate in our Chicago office, also contributed to this article.

Genetic Testing Kits and FSAs

by Jacob Mattinson and McDermott Will & Schulte | Aug 27, 2019 | Employee Benefits, Health and Welfare Plans

The IRS issued a private letter ruling (PLR) this week indicating that an FSA (and presumably an HSA and HRA) may reimburse a portion of the purchase of genetic testing and reports regarding ancestry and health. The IRS noted that the health services portion of such a cost is a reimbursable medical expense under Code Section 213(d) because the tests fall under “diagnosis of a disease.” With respect to the genetic services incurred by the individual seeking the PLR, the IRS noted that the reports contained genotyping (a qualified medical expense), as well as general information and ancestry information (not a qualified medical expense). It is incumbent upon the taxpayer to allocate the cost for the reimbursement to the portion which was attributable to a qualified medical expense. IRS private letter rulings are only applicable for the taxpayer that requests it; however, this is helpful insight to IRS approach to genetic testing kits as Code Section 213 medical expenses.

Right Around the Corner: Expanded IRS Determination Letter Program Opens in September

by Brian Tiemann, Sarah L. Engle and McDermott Will & Schulte | Aug 22, 2019 | Employee Benefits, Retirement Plans

Beginning September 1, 2019, the IRS is expanding its retirement plan determination letter program to apply to certain individually designed statutory hybrid and merged plans. Employers sponsoring hybrid plans not previously reviewed by the IRS for required (or other) plan changes, and employers that have or will merge two or more of their plans together in connection with a corporate transaction, should consider taking advantage of this expanded determination letter program.

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7 Severance Structuring Tips for Tax-Exempt Colleges and Universities

by Erin Steele, Joseph K. Urwitz and Todd Solomon | Aug 20, 2019 | Employee Benefits, Employment, Executive Compensation

In-house counsel and human resources professionals at tax-exempt colleges and universities often face a variety of challenges when structuring, and determining obligations due under, severance arrangements. There are some key considerations to bear in mind, which are outlined in this article.

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