One Too Many … Employer Considerations Following New Lawsuit Challenging Employer Providing Health Plan Options

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by Alex Smith

A recently filed lawsuit against Northwestern University and its health plan fiduciaries raises novel claims that could be problematic for employers that offer multiple medical benefit options, if the suit gains traction. The lawsuit alleges that the plan’s fiduciaries violated ERISA and breached their fiduciary duties by offering employees a medical plan option that provided insufficient value compared to an alternative option offered to employees. The plaintiffs allege that the “premium” plan option—which charges higher premiums in exchange for lower deductibles and cost sharing—is financially dominated by the “value” plan option because the lower cost sharing does not sufficiently outweigh the higher premium. This lawsuit is still in the early stages, and the court has yet to rule on whether the plaintiffs have plausibly stated a claim, let alone consider the merits of the allegations. Read more

Both Sides Now… Must Be Alert to Cybersecurity

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by Becky Achten

New guidance from the Employee Benefits Security Administration (EBSA) affirms that both sides—retirement plans and welfare plans—must take steps to secure participant data from cybercrime.

In 2021 the Department of Labor (DOL) introduced new guidance on best practices for maintaining cybersecurity, which included tips to participants who check their retirement accounts online. From this, many plan sponsors and service providers concluded that the guidance was only applicable to retirement benefits (such as 401(k), profit sharing, and pension plans). Read more

ERISA, ERISA…Just an Old Sweet Song Keeps ERISA on my Mind

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by Becky Achten

“Georgia” on your mind? As we look towards the upcoming Masters golf tournament weekend, our minds turn to the condition of the greens (exquisite), the players tee off order (does afternoon help or hinder Tiger on an expected rainy day?), and who will make that amazing chip shot out of the bunker to save par. It may not get quite the level of TV viewership of other sporting events, but benefit plan administration is a lot like golf: a series of pars, birdies and bogies, and—oh my, not a double bogie!

If you’re hitting par with your benefit plans, they’re operating smoothly, participants are happy with the offerings, and you’re in compliance with the most obvious regulations. All is good, but you probably won’t earn a green jacket. Read more

A Change Would Do You Good, But Do The Section 125 Cafeteria Plan Rules Permit It?

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by Elizabeth Nedrow

Inevitably, an employee will wake up from their holiday food coma and realize that they made a mistake in open enrollment. “But I didn’t mean to elect family coverage! My spouse is covering the kids this year!” Employers are allowed to set enrollment rules for their self-funded medical plans. One response to the employee is the hard line that the door was closed at the end of the enrollment period. But what if you want to be more flexible?

If the employee catches their mistake before the ball drops on New Year’s Eve, the IRS won’t care. But if the question comes up in January, it’s likely too late. The IRS’s rules on cafeteria plan elections don’t make any exception for mistake. Elections can only be changed if the employee has a change in status event like a divorce or new dependent. Read more

The Time Has Come, A Fact’s A Fact: Consider Adding a Welfare Plan Committee

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by Brenda Berg

The time may have come to add a welfare plan committee to your company’s governance of employee benefit plans. New legal obligations and other developments impose fiduciary risks for welfare plans similar to what already exist for retirement plans.

Most employers that sponsor a 401(k) plan or other retirement plan set up a committee to administer and oversee the plan. This is generally a best practice to ensure that the plan is properly administered in compliance with employee benefits laws and, for plans subject to the Employee Retirement Security Act of 1974 (ERISA), to have a process for following ERISA fiduciary duties. Fiduciary duties include acting prudently and in the best interests of participants, such as in overseeing service providers and monitoring plan fees. Read more

Gimme, Gimme, Gimme, My Required Notices

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by Leslie Thomson

Sponsors of self-funded group health plans are required to notify enrollees about the availability of the plan’s notice of privacy practices and how enrollees can obtain a copy of such notice. This must be done at least once every three years. However, many sponsors satisfy this obligation on behalf of their group health plans by including information regarding the availability of the notice in their plan’s annual enrollment materials. Read more

Time Is On My Side: Some Retirement Plan Amendment Deadlines Pushed Back

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by Brenda Berg

The IRS has given plan sponsors more time to adopt some – but apparently not all – retirement plan amendments reflecting law changes in the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the Bipartisan Miners Act of 2019 (Miners Act), and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Notice 2022-23, issued August 3, 2022, generally provides that the deadline to adopt these amendments is extended to December 31, 2025. This is the deadline for qualified plans regardless of the plan year, and this deadline also applies to 403(b) plans and collectively bargained plans. Governmental plans generally have until 90 days after the third regular legislative session of the body with the authority to amend the plan that begins after December 31, 2023. Read more

I’m Leaving On A Jet Plane…Is Abortion Care Travel a Covered Benefit?

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by Benjamin Gibbons

The focus of this week’s post is on an emerging hot topic, abortion care travel reimbursement. Reimbursement for travel to obtain abortion care was already something being considered by a number of companies in response to the recent Texas fetal heartbeat law and similar laws in other states. With the recently leaked Supreme Court draft opinion that stands to overturn Roe v. Wade, both the need for such a benefit and employers’ interest in offering travel reimbursements has increased significantly. If Roe is overturned, access to abortions will be largely prohibited in the 13 states with so called “trigger laws” and could be significantly restricted in at least 13 other states. Read more

I Feel Good… I Knew That I Would… Wellness Program Reminders

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by Alex Smith

With employers considering the imposition of health plan premium surcharges on participants who are COVID unvaccinated, a recent court decision highlights the importance of complying with the HIPAA wellness program requirements.

A federal district court in Ohio recently rejected a portion of Macy’s motion to dismiss the Department of Labor’s (DOL’s) enforcement action with respect to the tobacco surcharges on health plan premiums Macy’s imposed as part of its wellness program.  In its enforcement action, the DOL focused on the lack of a reasonable alternative standard for some of the years covered by the enforcement action and the lack of retroactively refunding the surcharge to participants who earned the right to avoid the surcharge later in the plan year for certain years in which a reasonable alternative standard was made available. As background, health contingent wellness programs are required to provide a reasonable alternative standard for earning the incentive (avoiding the surcharge) under HIPAA. Read more

Let’s Get Physical – Proposed PHIT Act Would Make Certain Sports and Fitness Expenses Tax Deductible

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by Alex Smith

Earlier this year, the Personal Health Investment Today Act of 2021 (the PHIT Act) was introduced in the U.S. Senate, where the legislation remains currently pending. If enacted, the PHIT Act would amend the Internal Revenue Code of 1986 to include “qualified sports and fitness expenses” among the expenses that may be deducted as tax-deductible medical expenses. In addition, individuals would be able to pay for “qualified sports and fitness expenses” using pre-tax dollars through their health savings account (HSA) or health care flexible spending account (Health FSA). Read more