Last week, former Wells Fargo employees filed a class action lawsuit against Wells Fargo and its health plan fiduciaries alleging that Wells Fargo’s self-funded health plan violated ERISA by paying its pharmacy benefits manager (PBM) excessive administrative fees and excessive fees for prescription drugs. This lawsuit appears to be similar to a lawsuit filed against Johnson & Johnson and its health plan fiduciaries earlier this year. Both lawsuits allege that the health plan paid its PBM exponentially more for certain prescription drugs than the price charged by certain retail pharmacies for the same drugs. Coincidentally, both lawsuits indicate the health plans are funded through a voluntary employees’ beneficiary association (VEBA) trust. See our prior blog post for more information on the heightened health plan fiduciary standards that may be driving these lawsuits. Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Alex Smithhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngAlex Smith2024-08-08 11:56:462024-08-08 11:56:46Hole in the Bottle… Employer Considerations After Another Lawsuit Against an Employer Health Plan
The Department of Health and Human Services issued a final rule amending the HIPAA privacy rules (“2024 Privacy Rule”). The 2024 Privacy Rule limits the use or disclosure of an individual’s PHI in connection with reproductive healthcare for certain non-healthcare purposes, where such use or disclosure could be detrimental to the privacy of the individual, or another person, or the individual’s trust in their healthcare providers. Among other changes, the 2024 Privacy Rule added a new category of prohibited uses and disclosures of PHI, which prohibits the use or disclosure of PHI for any of the following activities:
to conduct criminal, civil, or administrative investigations into any person for the mere act of seeking, obtaining, providing, or facilitating reproductive healthcare, where such healthcare is lawful under the circumstances in which it is provided;
to impose criminal, civil, or administrative liability on any person for the mere act of seeking, obtaining, providing, or facilitating reproductive healthcare, where such healthcare is lawful under the circumstances in which it is provided; and
to identify any person for the purpose of conducting such investigation or imposing such liability.
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Leslie Thomsonhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngLeslie Thomson2024-07-25 12:45:172024-07-25 12:45:17P-R-I-V-A-C-Y is Priceless to Me: The 2024 Privacy Rule
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
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Benjamin Gibbonshttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngBenjamin Gibbons2024-07-11 09:31:122024-07-11 09:31:12Vacation, All I Ever Wanted – But Don’t Forget Your July Compliance Deadlines
As the late, great B.B. King would sing, never make your move too soon. That’s often a smart approach in life. But when it comes to employee benefits communications, that might not be the right advice. The recent legislation known as SECURE 2.0 has a delayed deadline for retirement plan amendments. Generally, for a calendar year retirement plan, the SECURE 2.0 amendment deadline is December 31, 2026; collectively bargained plans have until December 31, 2028, and governmental plans have until December 31, 2029. However, many of the relevant SECURE 2.0 provisions may already be in effect now—or will be very soon—in your plan. What are the plan sponsor’s obligations regarding communicating the SECURE 2.0 changes to employees?
In general, a plan sponsor must either update its Summary Plan Description (SPD) or issue a Summary of Material Modifications (SMM) to employees by no later than 210 days following the end of the plan year in which a retirement plan change is adopted. For a calendar year plan, that is typically July 29th following the plan year of the change (July 28th this year due to leap year). For example, if you made any plan amendments in 2023, you should issue an updated SPD or SMM by July 28, 2024. Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Lyn Domenickhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngLyn Domenick2024-06-20 09:33:262024-06-20 09:33:26Never Make Your SPD Move Too Soon… or Should You?
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
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Beth Nedrowhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngBeth Nedrow2024-06-13 10:13:432024-06-13 10:13:43You Say It’s Your Birthday?! Well, It’s ERISA’s Birthday, Too!
Owners of closely held businesses, particularly first-generation owners, often have a difficult time finding a suitable succession plan. These owners are faced not only with phasing out of their labor of love, but choosing a new direction for the thing they created. That new direction often starts by looking at third party investors and buyers, which may consist of competitors or private equity. If the owners find the third-party market undesirable, they may seek out alternatives. Our blog post today looks at three “internal” succession alternatives that owners may want to consider, particularly those that are driven by a desire to preserve legacy and/or protect the workforce, including existing management. Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Kevin Selzerhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngKevin Selzer2024-05-13 12:00:352024-05-24 13:38:25Sweet Child O’Mine – Business Transition with Benefits
“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
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Brenda Berghttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngBrenda Berg2024-04-26 14:23:452024-04-29 10:58:35Just Because I’m Missing, Doesn’t Mean I’m Lost: Should Plan Sponsors Provide Data for the DOL’s Missing Participant Database?
Hole in the Bottle… Employer Considerations After Another Lawsuit Against an Employer Health Plan
/in Corporate Governance in Benefits, DOL, ERISA, Fees, Fiduciary Duties, Health & Welfare Plans, Litigationby Alex Smith
Last week, former Wells Fargo employees filed a class action lawsuit against Wells Fargo and its health plan fiduciaries alleging that Wells Fargo’s self-funded health plan violated ERISA by paying its pharmacy benefits manager (PBM) excessive administrative fees and excessive fees for prescription drugs. This lawsuit appears to be similar to a lawsuit filed against Johnson & Johnson and its health plan fiduciaries earlier this year. Both lawsuits allege that the health plan paid its PBM exponentially more for certain prescription drugs than the price charged by certain retail pharmacies for the same drugs. Coincidentally, both lawsuits indicate the health plans are funded through a voluntary employees’ beneficiary association (VEBA) trust. See our prior blog post for more information on the heightened health plan fiduciary standards that may be driving these lawsuits. Read more
P-R-I-V-A-C-Y is Priceless to Me: The 2024 Privacy Rule
/in Health & Welfare Plansby Leslie Thomson
The Department of Health and Human Services issued a final rule amending the HIPAA privacy rules (“2024 Privacy Rule”). The 2024 Privacy Rule limits the use or disclosure of an individual’s PHI in connection with reproductive healthcare for certain non-healthcare purposes, where such use or disclosure could be detrimental to the privacy of the individual, or another person, or the individual’s trust in their healthcare providers. Among other changes, the 2024 Privacy Rule added a new category of prohibited uses and disclosures of PHI, which prohibits the use or disclosure of PHI for any of the following activities:
Read more
Vacation, All I Ever Wanted – But Don’t Forget Your July Compliance Deadlines
/in 401(k) Plans, 403(b) plans, Defined Benefit Plans, DOL, ERISA, ESOPs, Fees, Health & Welfare Plans, IRS, Retirement Plansby 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
Never Make Your SPD Move Too Soon… or Should You?
/in 401(k) Plans, 403(b) plans, Defined Benefit Plans, ERISA, ESOPs, Governmental Plans, IRS, Legislation, Retirement Plansby Lyn Domenick
As the late, great B.B. King would sing, never make your move too soon. That’s often a smart approach in life. But when it comes to employee benefits communications, that might not be the right advice. The recent legislation known as SECURE 2.0 has a delayed deadline for retirement plan amendments. Generally, for a calendar year retirement plan, the SECURE 2.0 amendment deadline is December 31, 2026; collectively bargained plans have until December 31, 2028, and governmental plans have until December 31, 2029. However, many of the relevant SECURE 2.0 provisions may already be in effect now—or will be very soon—in your plan. What are the plan sponsor’s obligations regarding communicating the SECURE 2.0 changes to employees?
In general, a plan sponsor must either update its Summary Plan Description (SPD) or issue a Summary of Material Modifications (SMM) to employees by no later than 210 days following the end of the plan year in which a retirement plan change is adopted. For a calendar year plan, that is typically July 29th following the plan year of the change (July 28th this year due to leap year). For example, if you made any plan amendments in 2023, you should issue an updated SPD or SMM by July 28, 2024. Read more
You Say It’s Your Birthday?! Well, It’s ERISA’s Birthday, Too!
/in ERISAby 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
Sweet Child O’Mine – Business Transition with Benefits
/in ESOPs, Executive CompensationBy Kevin Selzer
Owners of closely held businesses, particularly first-generation owners, often have a difficult time finding a suitable succession plan. These owners are faced not only with phasing out of their labor of love, but choosing a new direction for the thing they created. That new direction often starts by looking at third party investors and buyers, which may consist of competitors or private equity. If the owners find the third-party market undesirable, they may seek out alternatives. Our blog post today looks at three “internal” succession alternatives that owners may want to consider, particularly those that are driven by a desire to preserve legacy and/or protect the workforce, including existing management. 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?
/in 401(k) Plans, 403(b) plans, 457(b) plans, 457(f) plans, Defined Benefit Plans, DOL, Employee Stock Purchase Plans (ESPPs), ERISA, ESOPs, Fiduciary Duties, Legislation, Retirement Plansby 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