Vacation, All I Ever Wanted – But Don’t Forget Your July Compliance Deadlines

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by Benjamin Gibbons

Congratulations! You made it to summer, that wonderful time of year when things at work (hopefully) slow down a bit and you’re able to take some well-deserved time off. Though before you Go-Go(‘s) (do you see what I did there?), be sure your July employee benefits compliance deadlines are covered.

July 29 – Summary of Material Modifications (SMM) – Were any of your organization’s plans materially amended last year? If so, you may be required to furnish an SMM to participants (or a revised summary plan description). Those SMMs must be provided no later than 210 days after the end of the plan year in which the change was adopted. So, for a 2023 change, the SMM deadline would fall on July 29 (you get an extra day this year because 210 days falls on July 28, a weekend). Read more

You Say It’s Your Birthday?! Well, It’s ERISA’s Birthday, Too!

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by Elizabeth Nedrow

Employee benefits law is mostly drawn from two federal sources—the Internal Revenue Code and ERISA. Just what is “ERISA,” though? Its official reference is the “Employee Retirement Income Security Act of 1974.” That means the law is 50 years old this year! So, in honor of its birthday, let’s take a deeper dive into its history.

ERISA was signed by President Gerald Ford on Labor Day, September 2, 1974. The history of laws regulating benefit plans started long before then, mostly in the form of tax rules controlling deductions relating to pension plans. For example, the Revenue Act of 1913 provided for the tax-exempt status of pensions, and the Revenue Act of 1942 provided participation requirements and, for the first time, disclosure requirements. Read more

Just Because I’m Missing, Doesn’t Mean I’m Lost: Should Plan Sponsors Provide Data for the DOL’s Missing Participant Database?

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by Brenda Berg

“Missing participants” have long been a thorn in the side of plan sponsors and administrators, as they are owed a retirement benefit, but are unable to be found or unresponsive to plan communications. As a partial solution, Congress directed the DOL in the SECURE 2.0 Act of 2022 to create a “Retirement Savings Lost and Found”—an online searchable database that would connect missing participants with their retirement benefits—by December 29, 2024. The DOL had contemplated populating the database with information from Form 8955-SSA, which plans already submit to the IRS. However,  the IRS has refused to provide the information to the DOL, citing privacy concerns regarding confidential tax information. This has caused the DOL to look to sponsors of ERISA plans to voluntarily provide participant information to populate the database. While this may be a good idea in principle, it creates many obstacles. 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

Should’ve Been a Cowboy, Court Inflicts Pain on Health Plan Sponsor After Participant Kicked by Bull

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by Alex Smith

A recent decision by a federal district court in Ohio in a health plan benefits dispute highlights the importance for health plan fiduciaries to properly review benefit claim denials to ensure that the claims administrator’s basis for denial is appropriate and that the claims administrator has properly considered information provided by the participant.

In this case, the participant sued after he was denied coverage for more than $100,000 of medical bills related to a broken ankle suffered when he was kicked by his bull calf. Even though the participant worked as an HVAC division manager, the health plan’s third-party administrator denied the claims based on the plan’s exclusion for on-the-job injuries because the participant owned a cattle farm from which he sold beef. The court ruled that the participant was entitled to coverage for his medical expenses because the health plan fiduciaries had the burden of demonstrating the plan exclusion applied. Read more

Take the Power Back . . . Negotiating Provider Contracts for Benefit Plans

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By Kevin Selzer

Disputes between plan sponsors and plan service providers are not new. As with any contractual relationship, things don’t always go according to “plan” or at least, as the sponsor expects. When that happens, one of the first things sponsors (and their attorneys) will do is review the provider’s contract. Some sponsors will be surprised to find some very provider-friendly provisions, such as:

  • a provision specifying that the provider is permitted by the contract to act negligently (as long as the conduct does not rise to gross negligence or intentional misconduct), or
  • a provision indicating that the sponsor has contractually waived its right to participate in a class against the provider.

Unfortunately for sponsors, a provider’s willingness to fix an error often comes down to how much the provider wants to continue working with the sponsor on a go forward basis. 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

Better Hide the Wine … Employer Considerations as the DOL Doubles Down on Mental Health Parity Compliance in New Proposed Regulations

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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 proposed Mental Health Parity and Addiction Equity Act (MHPAEA) regulations and their second joint report to Congress regarding their MHPAEA enforcement activities as required under the MHPAEA and the Consolidated Appropriations Act, 2021 (CAA).

In addition, the DOL issued Technical Release 2023-01P, requesting comments on potential data requirements related to non-quantitative treatment limitations (NQTLs) and network composition. The proposed regulations and Technical Release indicate that employers can expect increased compliance obligations related to NQTLs and the NQTL comparative analysis reporting and disclosure requirements established by the CAA. For additional information about the CAA’s MHPAEA NQTL comparative analysis reporting and disclosure requirements, please see our blog posts from 2022 and 2021. Read more

You Can Count On Me…But Check Your Math When Counting Participants for the 5500 Audit Rule!

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by Becky Achten

Bruno Mars may be crooning “Count on me,” but make sure you don’t overcount your retirement plan participants! New rules may allow you to leave some employees out of the count, which could save you the expense of the annual audit.

If your retirement plan is considered “large” – generally 100 or more participants – you’re probably in the middle of the Department of Labor required annual independent audit of the financial statements that must accompany the Form 5500. There are a few exceptions to the audit requirement – plans that have less than 100 participants at the beginning of the year and those with between 80 and 120 who filed as a small plan in the prior year. If your plan is just over that 100-participant level, there may be relief on the horizon from the required audit and another reason to keep track of those separated participants. Read more

It’s a Roller Coaster … Employer Considerations After Court Invalidates ACA Preventive Care Mandate

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by Alex Smith

Since the Affordable Care Act (“ACA”) became law in 2010, numerous groups have attempted to invalidate the ACA or specific parts of the ACA through litigation. Even after a number of plaintiffs unsuccessfully attempted to invalidate the ACA over the past dozen years, a Federal district court judge in Texas recently invalidated the ACA’s requirement that non-grandfathered group health plans provide preventive care services with an “A” or “B” rating in the current recommendations from the United States Preventive Services Task Force (e.g., certain cancer screenings, depression screening, statins to prevent heart disease, etc.) with no cost sharing. In addition, the court ruled that the requirement that plans cover PrEP HIV medications cannot be enforced against plan sponsors with religious objections. The ACA’s other preventive care mandates remain in effect. Read more