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?
“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
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00Becky Achtenhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngBecky Achten2024-04-10 16:02:102024-04-10 16:02:10ERISA, ERISA…Just an Old Sweet Song Keeps ERISA on my Mind
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
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 Smith2024-03-06 13:13:582024-03-06 13:16:37Should’ve Been a Cowboy, Court Inflicts Pain on Health Plan Sponsor After Participant Kicked by Bull
The Employee Plans Compliance Resolution System (“EPCRS”), as set forth in Revenue Procedure 2021-30, allows plan sponsors to correct “Qualification Failures,” which are defined as any plan document, operational, demographic or employer eligibility failures. Failure to follow the terms of a plan constitutes an operational failure.
Operational Failures can be corrected without IRS supervision under the Self-Correction Program (“SCP”) of EPCRS without paying a fee or sanction in two circumstances: (1) insignificant operational defects can be corrected at any time, even if the plan is under an IRS audit; and (2) significant operational defects can be corrected by the end of the third plan year following the plan year in which the defect arose. EPCRS summarizes the factors a plan sponsor may use to determine if a failure is insignificant or not. Moreover, SCP is only available if the plan sponsor has established practices and procedures reasonably designed to promote and facilitate overall compliance with applicable Internal Revenue Code requirements, and the failure occurred through an oversight or mistake in applying the procedures or because the procedures were not sufficient to prevent the occurrence of the failure. Read more
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 Thomson2024-02-21 16:40:122024-02-21 16:40:12You Live, You Learn… Correcting “Qualification Failures” under the Self-Correction Program
Join us in-person to hear updates on retirement plan audits, Mental Health Parity requirements and risks, ERISA fiduciary developments, SECURE 2.0 eligibility rules, benefits in mergers and acquisitions, service provider contracts, and more.
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2024-02-13 10:47:222024-02-13 10:47:22Join Us for the Employee Benefits Symposium 2024
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
ERISA, ERISA…Just an Old Sweet Song Keeps ERISA on my Mind
/in 401(k) Plans, Cafeteria Plans, Defined Benefit Plans, DOL, ERISA, Fiduciary Duties, Health & Welfare Plans, IRS, Retirement Plansby 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
/in Corporate Governance in Benefits, DOL, ERISA, Fiduciary Duties, Health & Welfare Plans, Litigationby 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
You Live, You Learn… Correcting “Qualification Failures” under the Self-Correction Program
/in 401(k) Plans, IRS, Retirement Plansby Leslie Thomson
The Employee Plans Compliance Resolution System (“EPCRS”), as set forth in Revenue Procedure 2021-30, allows plan sponsors to correct “Qualification Failures,” which are defined as any plan document, operational, demographic or employer eligibility failures. Failure to follow the terms of a plan constitutes an operational failure.
Operational Failures can be corrected without IRS supervision under the Self-Correction Program (“SCP”) of EPCRS without paying a fee or sanction in two circumstances: (1) insignificant operational defects can be corrected at any time, even if the plan is under an IRS audit; and (2) significant operational defects can be corrected by the end of the third plan year following the plan year in which the defect arose. EPCRS summarizes the factors a plan sponsor may use to determine if a failure is insignificant or not. Moreover, SCP is only available if the plan sponsor has established practices and procedures reasonably designed to promote and facilitate overall compliance with applicable Internal Revenue Code requirements, and the failure occurred through an oversight or mistake in applying the procedures or because the procedures were not sufficient to prevent the occurrence of the failure. Read more
Join Us for the Employee Benefits Symposium 2024
/in UncategorizedJoin us in-person to hear updates on retirement plan audits, Mental Health Parity requirements and risks, ERISA fiduciary developments, SECURE 2.0 eligibility rules, benefits in mergers and acquisitions, service provider contracts, and more.
Reserve your seat by registering (click here to register). This event is in-person only, so please attend the symposium at one of our Holland & Hart offices: Billings, MT | Boise, ID | Denver, CO | Salt Lake City, UT.
For more information, please view our full agenda here.
Tuesday, February 27, 2024
8:30 AM – 12:00 PM MST
CLE/CPE Credits: 3.0 CLE and CPE credits pending for Colorado, Idaho, Montana, and Utah.
PREREQUISITES: None
COST: None
Questions: Please contact Lisa Adelberg.