Write This Down … Participants Have to Follow the Plan’s Beneficiary Designation Procedures

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by Elizabeth Nedrow

The principles governing how ERISA plans determine a participant’s beneficiary haven’t changed much since the country singer George Strait sang “Write this down” in 1999. In short, the participant has to write it down … on the forms and following the procedures established by the plan.

Recently we’ve seen several examples of family members of deceased employees who are surprised by the plan’s record of who was designated as beneficiary. They have tried to argue that the deceased employee’s will should be allowed to designate a beneficiary, or that the plan should look to state laws regarding estates. However, the courts have clearly established that those extraneous sources do not affect the plan’s process. (Most famous are the U.S. Supreme Court’s 2001 Egelhoff decision, and its 2009 Kennedy v. DuPont decision.) Read more

Here I Go Again in the Plan…Treatment of Rehired Employees

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by Benjamin Gibbons

As a result of the current labor shortage that many employers are currently faced with, more and more companies are finding themselves rehiring former employees.  If those former employees previously participated in an employer’s 401(k) plan prior to their severance from employment, such employers should review their 401(k) plan documents to see how such rehired employees are treated under those plans. Read more

Oh Won’t You Stay…A Little Bit Longer…Because There’s No Need to Sign Your Distribution Form in Person

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by Elizabeth Nedrow and Becky Achten

In June 2020, the IRS issued Notice 2020-42 providing temporary relief from the physical presence requirement for certain participant distribution and beneficiary designation elections required to be witnessed by a notary public or plan representative.  This temporary relief was scheduled to expire June 30, 2021, and now has again been extended by the IRS.

As the COVID-19 pandemic continues, the IRS issued Notice 2021-40, again extending the temporary relief through the 12-month period ending June 30, 2022, as long as the prior requirements are met.  See our January 25, 2021 blog posting for a summary of the requirements. Read more

This is the End: Employers Must Provide Notice of the Expiring COBRA Subsidy Period

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by Brenda Berg

The COBRA subsidy from COVID-19 stimulus bill – The American Rescue Plan Act of 2021 (ARPA) – is nearing an end and in many cases requires employers to provide notices by September 15. The COBRA subsidy covered 100% of COBRA premiums for assistance-eligible individuals for periods of coverage beginning on or after April 1, 2021 through September 30, 2021. We previously covered the details of the subsidy in these posts: These Boots Are Made For Walking…But If You Quit, You Might Not Get the COBRA Subsidy and Lean on Me…New Guidance on Federal COBRA Subsidy. Because eligible individuals have 60 days to elect COBRA, there are still a couple months of coverage periods for which individuals may still be able to elect the subsidy. Read more

I Can’t Go For That, No Balance Billing

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by Leslie Thomson

The Consolidated Appropriations Act of 2021 (“CAA”) established, among other things, new protections from surprise billing and excessive cost-sharing for consumers receiving health care items and services (“No Surprises Act”).

Most group health plans and health insurance issuers that offer group or individual health insurance coverage have a network of providers and health care facilities that agree to accept a specific payment amount for their services. Providers and facilities that are not part of a plan’s or issuer’s network usually charge higher amounts than the in-network providers and facilities. Group health plans and issuers typically do not cover the entire out-of-network costs, leaving the individual with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider may bill the individual for the difference between the billed charge and the amount paid by their plan or insurance, unless prohibited by state law (known as “balance billing”). Read more

Here We Go Again, PCORI’s Back in Town

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By Benjamin Gibbons

For those employers that sponsor a self-insured health plan, it’s important to be aware that the deadline for your 2021 PCORI filing is August 2, 2021. This deadline applies for plan years ending on December 31, 2020 (or any others between October 1, 2020 and October 1, 2021).  If you haven’t yet made your PCORI filing on IRS Form 720, we recommend doing so as soon as possible. Read more

Time Has Come Today…For Form 5500 Season

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By Benjamin Gibbons

Days are getting longer, temperatures are getting warmer, plants are looking greener, schools are letting out, Brood X cicadas are emerging…it can only mean one thing…5500 season is approaching.

However, unlike the cicadas and their 17-year cycle, the Form 5500 filing requirements arise every summer for calendar year-end ERISA covered retirement plans and health and welfare plans that cover at least 100 participants.  While it may be easy enough to file an extension and hit the snooze button until October, now is great time for plan sponsors to start thinking about their 5500 obligations. Read more

Baby, What a Big Surprise! Right Before My Very Eyes…

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by Becky Achten

The No Surprises Act (part of the Consolidated Appropriations Act introduced earlier this year) is poised to eliminate some of the surprises that group health plan participants encounter from unexpected charges.  One way the new legislation intends to accomplish this is with Advanced Explanation of Benefits (EOBs). Read more

Lean on Me . . . New Guidance on Federal COBRA Subsidy

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By Kevin Selzer

We posted on April 6th about the COBRA subsidy that was made available through the American Rescue Plan Act of 2021 (ARPA).  In short, the law gives certain individuals who are entitled to COBRA due to a reduction of hours or involuntary termination of employment a 100% subsidy for health coverage that is continued under COBRA or equivalent state laws. Read more

Matchmaker, Matchmaker, Make Me a Match … Based on my Student Loan Repayments

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by Beth Nedrow

For the last several years, a hot topic for policymakers has been how to address the nation’s massive student loan debt. At the same time, the pressure remains to develop ways to encourage Americans to save for their own retirement. Legislation is in the works that proposes marrying those two goals.

Earlier this week, the U.S. House of Representatives Ways and Means Committee passed a bipartisan retirement reform bill, the Securing a Strong Retirement Act of 2021 (or “SECURE 2.0,” to reflect its role in following in the footsteps of the SECURE Act passed in December 2019). Among other provisions, SECURE 2.0 would permit employers to make matching contributions under a 401(k) plan, 403(b) plan or SIMPLE IRA with respect to “qualified student loan payments.” Such arrangements have been touted as a way to make sure employees burdened with student loans don’t miss out on employer retirement contributions since they may be unable to afford both student loan repayments and elective deferrals to a retirement plan. Read more