I Want a New Drug…Prescription Drug Data Collection Reporting is Due December 27th

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by Becky Achten

Plan sponsors are ultimately responsible for compliance with the Prescription Drug Data Collection (RxDC) required reporting for their group health plans—and there’s no time to waste since the reporting is due by December 27, 2022. But information to complete one of the data files, the D1 (premium/cost information), may not be available to the Third Party Administrator (TPA) filing the report and, thus, may be incomplete. What’s a plan sponsor to do?

As background, the Consolidated Appropriations Act, 2021 (CAA) requires group health plans and health insurance issuers to submit certain information about health care and prescription drug spending to the Department of Health and Human Services, Department of Labor, and Department of the Treasury (collectively, the Departments) annually. The reporting consists of a plan identifier file, eight separate data files, and a narrative response. Read more

It May Not Be Urgent…But It’s Still an Emergency

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by Lyn Domenick

Although businesses, schools, and the general population seem to be moving COVID-19 to the background, it’s still very much on the forefront of employer health plan administration.

Health and Human Services (HHS) recently announced another 90-day extension of the Public Health Emergency (PHE), effective October 13, 2022, extending it through January 10, 2023. HHS has indicated that it will give 60 days advance notice of the end of this particular PHE period, which has been in effect since January 27, 2020. If this is to be the final 90-day period of the PHE, then HHS should announce its forthcoming end by November 12, 2022. What does this mean for employer health plans? For one thing, group health plans must continue to cover COVID-19 diagnostic testing and related services to participants without cost sharing. Nothing has changed for now. Read more

Hole in the Bottle … Protecting Against 401(k) Cybersecurity Leakage

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by Alex Smith

Both the Department of Labor (DOL) and plaintiffs’ lawyers have taken an interest in retirement plans’ cybersecurity in recent years. Last year, the DOL issued guidance on the cybersecurity considerations plan fiduciaries should be mindful of. In addition, cyber theft in recent years has led to multiple lawsuits. A specific recordkeeper involved in many of these lawsuits is currently being investigated by the DOL with respect to cybersecurity incidents that have impacted certain of its retirement plan clients. Read more

You Spin Me QPAM Baby QPAM: DOL’s Proposed QPAM Rule May Mean Changes to Collective Trust Agreements for Plan Sponsors

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by Bret F. Busacker

The DOL published on July 27, 2022 a proposed change to the QPAM Exemption (“Proposed QPAM Amendment”) that may require retirement plan sponsors to update their collective trust agreements in order to satisfy the new DOL requirements.  Collective trusts have become an increasingly common way for qualified retirement plan committees/plan sponsors to achieve lower investment expenses for some of the investment options in their plans.

These collective trusts are managed by investment managers who often engage other financial institutions to execute trades involving the pension assets held by the collective trust. These trades involving retirement plan assets may at times be executed by a financial institution that is also providing services (such as recordkeeping services) to the same retirement plan.  Absent an exemption, these sorts of related party transactions may violate the ERISA prohibited transaction rules.   Read more

Every Little Thing … Considerations Before Adding Crypto to a 401(k) Plan

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by Alex Smith

Fidelity Investments recently announced that it will offer its 401(k) plan clients the opportunity to offer bitcoin as a 401(k) plan investment option later this year.  While this may sound intriguing to some plan fiduciaries and participants, plan fiduciaries should proceed with extreme caution.

Based on the Department of Labor’s (DOL) public pronouncements, it appears the DOL has serious doubts about whether 401(k) plan fiduciaries who include cryptocurrency among their 401(k) plan’s investment options comply with their ERISA fiduciary duties.  In March, the DOL issued Compliance Assistance Release No. 2022-01, in which it expressed “serious concerns” about the prudence of 401(k) plan fiduciaries including cryptocurrency as a 401(k) plan investment option and announced it plans to conduct an investigative program related to cryptocurrency investments by 401(k) plans.  For more information on Compliance Assistance Release No. 2022-01, please see our prior blog post Can’t Touch This … DOL Discourages Plans From Investing in Cryptocurrency.  Following Fidelity’s announcement, a DOL official expressed “grave concerns” about the offering and indicated that the DOL intends to meet with Fidelity to discuss its concerns in comments to the Wall Street Journal. Read more

How Much is that (Investment) in the Window…A Higher Level of Fiduciary Oversight Could be Required for 401(k) Plan Brokerage Windows

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by Brenda Berg

Fiduciaries of 401(k) plans and other retirement plans know that they must prudently monitor the investment options available to participants in the plan, but are they monitoring participants’ investments made through a plan’s brokerage window? Recent commentary from the Department of Labor (DOL) on cryptocurrency investments suggests maybe fiduciaries should be – and that the DOL may check in on that soon.[i]

A “brokerage window” or “self-directed brokerage account” can allow participants access to a broad array of investments beyond the regular investment menu under the plan. Most plan fiduciaries have not paid much attention to the actual brokerage window investments. This is not surprising given the DOL’s relative lack of focus on the matter. The DOL had issued guidance in 2012 that the investment disclosure portion of the fee disclosure rules could apply to brokerage window investments in certain cases but after pushback due to the administrative burdens, the DOL withdrew that guidance. In 2014 the DOL issued a Request for Information about brokerage window practices but no further guidance was issued. Read more

Can’t Touch This … DOL Discourages Plans From Investing in Cryptocurrency

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by Becky Achten

Among the many phrases of ERISA, one that is familiar to investment fiduciaries is the requirement to choose investments with the care, skill, prudence, and diligence that a prudent person who is familiar with such matters would use. Recently the Department of Labor (DOL) issued guidance on how this prudence standard applies to fiduciaries who offer cryptocurrency investment alternatives to participants.

In Compliance Assistance Release 2022-01, the DOL reminds fiduciaries of their important role in selecting investments for participant direction. Plan fiduciaries must evaluate each investment option made available to participants to ensure they are prudent. Failure to remove an imprudent investment is a breach of duty. Read more

What Doesn’t Kill You Makes You Stronger… New Audit Requirements for Retirement Plans

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by Bret F. Busacker

For many retirement plan sponsors, Form 5500 preparation season is underway.  Plan sponsors should be aware that things have changed with the Form 5500 audit requirements and procedures.  These changes push more responsibility to plan sponsors and require plan sponsors to better understand the representations they are making to the auditors as part of the 2021 plan audit (and beyond). So what has changed?

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What Happens in a Small Town Stays in a Small Town … Until the DOL Doubles Down on Mental Health Parity Compliance

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by Alex Smith

The Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of Treasury (collectively, the Departments) recently issued their joint report to Congress regarding their Mental Health Parity and Addiction Equity Act (MHPAEA) enforcement activities as required under the MHPAEA and the Consolidated Appropriations Act, 2021 (CAA). The report contained insights regarding the DOL’s enforcement of the new MHPAEA reporting and disclosure requirements related to non-quantitative treatment limitations (NQTLs) established by the CAA. For additional information about the CAA’s new MHPAEA reporting and disclosure requirements, please see our previous blog post (as well as earlier blog posts). 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