Employee Benefits-IRS Issues Rev. Proc. 2024-14, Providing Indexing Adjustments for the Applicable Dollar Amounts Under § 4980H(c)(1) and (b)(1) of the Internal Revenue Code (Posted 5/17/2024)
See the Rev. Proc. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-24-14.pdf
See the Rev. Proc. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-24-14.pdf
Employee Benefits-IRS Issues Publication 969, Health Savings Accounts And Other Tax-Favored Health Plans (Posted 5/15/2024)
Here is What’s New:
Notice 2023-37 addresses the announced end of the COVID-19 public health emergency and the National Emergency Concerning the Novel Coronavirus Disease 2019 Pandemic on May 11, 2023; it modifies prior guidance regarding benefits relating to testing for and treatment of COVID-19 that can be provided by a health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code). Specifically, the relief described in Notice 2020-15, 2020-14 IRB 559, applies only with respect to plan years ending on or before December 31, 2024. Notice 2023-37 also clarifies whether certain items and services are treated as preventive care under section 223(c)(2)(C). Specifically, the preventive care safe harbor as described in Notice 2004-23, 2004-15 IRB 725, does not include screening (for example, testing) for COVID-19, effective as of July 24, 2023.
Notice 2023-37 also provides that items and services recommended with an “A” or “B” rating by the United States Preventive Services Task Force on or after March 23, 2010, are treated as preventive care for purposes of section 223(c)(2)(C), regardless of whether these items and services must be covered, without cost sharing, under Public Health Service Act section 2713.
For more information on Notice 2023-37, 2023-30 I.R.B. 359, see IRS.gov/irb/2023-30_IRB#NOT-2023-37.
See Publication 969 for details. It may be found here: https://www.irs.gov/pub/irs-prior/p969--2023.pdf
Here is What’s New:
Notice 2023-37 addresses the announced end of the COVID-19 public health emergency and the National Emergency Concerning the Novel Coronavirus Disease 2019 Pandemic on May 11, 2023; it modifies prior guidance regarding benefits relating to testing for and treatment of COVID-19 that can be provided by a health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code). Specifically, the relief described in Notice 2020-15, 2020-14 IRB 559, applies only with respect to plan years ending on or before December 31, 2024. Notice 2023-37 also clarifies whether certain items and services are treated as preventive care under section 223(c)(2)(C). Specifically, the preventive care safe harbor as described in Notice 2004-23, 2004-15 IRB 725, does not include screening (for example, testing) for COVID-19, effective as of July 24, 2023.
Notice 2023-37 also provides that items and services recommended with an “A” or “B” rating by the United States Preventive Services Task Force on or after March 23, 2010, are treated as preventive care for purposes of section 223(c)(2)(C), regardless of whether these items and services must be covered, without cost sharing, under Public Health Service Act section 2713.
For more information on Notice 2023-37, 2023-30 I.R.B. 359, see IRS.gov/irb/2023-30_IRB#NOT-2023-37.
See Publication 969 for details. It may be found here: https://www.irs.gov/pub/irs-prior/p969--2023.pdf
Employee Benefits-IRS Says That Its Employer-Provided Childcare Tax Credit Page Helps Employers Determine Eligibility For Up To $150,000 Business Tax Credit (Posted 5/13/2024)
The Page is discussed here: https://www.irs.gov/newsroom/irs-employer-provided-childcare-tax-credit-page-helps-employers-determine-eligibility-for-up-to-150000-business-tax-credit
The Page is discussed here: https://www.irs.gov/newsroom/irs-employer-provided-childcare-tax-credit-page-helps-employers-determine-eligibility-for-up-to-150000-business-tax-credit
Employee Benefits-IRS Issues 2023 Form 7206 Self-Employed Health Insurance Deduction (Posted 5/10/2024)
The Form may be found here: irs.gov/pub/irs-prior/f7206--2023.pdf
The Form may be found here: irs.gov/pub/irs-prior/f7206--2023.pdf
Employee Benefits-IRS Issues Instructions for Form 8915-F (Rev. January 2024) Qualified Disaster Retirement Plan Distributions and Repayments (Posted 5/8/2024)
What’s New:
SEP IRAs and SIMPLE IRAs. Section 601 of the SECURE 2.0 Act of 2022 allows for the creation of Roth accounts for SEP IRAs and SIMPLE IRAs beginning January 1, 2023. As a result, accounts we had previously referred to as "SEP IRAs" and "SIMPLE IRAs" in these instructions will now be called traditional SEP and traditional SIMPLE IRAs, respectively. We will refer to the newly enacted Roth accounts as "Roth SEP IRAs" and "Roth SIMPLE IRAs," respectively. See, for example, the 2023 Instructions for Form 8606.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i8915f--2024.pdf
What’s New:
SEP IRAs and SIMPLE IRAs. Section 601 of the SECURE 2.0 Act of 2022 allows for the creation of Roth accounts for SEP IRAs and SIMPLE IRAs beginning January 1, 2023. As a result, accounts we had previously referred to as "SEP IRAs" and "SIMPLE IRAs" in these instructions will now be called traditional SEP and traditional SIMPLE IRAs, respectively. We will refer to the newly enacted Roth accounts as "Roth SEP IRAs" and "Roth SIMPLE IRAs," respectively. See, for example, the 2023 Instructions for Form 8606.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i8915f--2024.pdf
Employee Benefits-IRS Issues Instructions for Form 5330 (Rev. December 2023) Return of Excise Taxes Related to Employee Benefit Plans (Posted 5/6/2024)
What’s New:
Mandatory electronic filing. Under final regulations (T.D. 9972) issued in February 2023, any employer or individual required to file an excise tax return on Form 5330 must file the excise tax return electronically for tax years ending on or after December 31, 2023, if the filer is required to file at least 10 returns of any type during the calendar year that the Form 5330 is due. See Regulations section 54.6011-3 for more information.
Extension. Effective in 2024, Form 8868, Application for Extension of Time To File an Exempt Organization Return or Excise Taxes Related to Employee Benefit Plans, is used to request an extension of time to file Form 5330. If approved, you may be granted an extension of up to 6 months after the normal due date of Form 5330. Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, is no longer used for an extension of time to file Form 5330.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i5330--2023.pdf
What’s New:
Mandatory electronic filing. Under final regulations (T.D. 9972) issued in February 2023, any employer or individual required to file an excise tax return on Form 5330 must file the excise tax return electronically for tax years ending on or after December 31, 2023, if the filer is required to file at least 10 returns of any type during the calendar year that the Form 5330 is due. See Regulations section 54.6011-3 for more information.
Extension. Effective in 2024, Form 8868, Application for Extension of Time To File an Exempt Organization Return or Excise Taxes Related to Employee Benefit Plans, is used to request an extension of time to file Form 5330. If approved, you may be granted an extension of up to 6 months after the normal due date of Form 5330. Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, is no longer used for an extension of time to file Form 5330.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i5330--2023.pdf
Employee Benefits-IRS Issues 2023 Instructions for Form 5500-EZ Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan (Posted 5/3/2024)
What’s New:
IRS Compliance Question. A new IRS compliance question regarding whether a plan sponsor is an adopter of a preapproved plan is added to Line 12.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i5500ez--2023.pdf
What’s New:
IRS Compliance Question. A new IRS compliance question regarding whether a plan sponsor is an adopter of a preapproved plan is added to Line 12.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i5500ez--2023.pdf
Employee Benefits-IRS Issues 2023 Instructions for Form 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (Posted 5/1/2024)
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i5329--2023.pdf
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i5329--2023.pdf
Employee Benefits-IRS Issues 2023 Instructions for Form 8955-SSA Annual Registration Statement (Identifying Separated Participants With Deferred Vested Benefits) (Posted 4/29/2024)
See the Instructions for details. They may be fund here: https://www.irs.gov/pub/irs-prior/i8955ssa--2023.pdf
See the Instructions for details. They may be fund here: https://www.irs.gov/pub/irs-prior/i8955ssa--2023.pdf
Employee Benefits-IRS’s Employee Plans News (1/26/2024) Contains Information On Long-Term Part-Time Employees in 401(k) Plans (Posted 4/26/2024)
This version of Employee Plans News may be found here: https://benefitslink.com/src/irs/irs-employee-plans-news-01262024.pdf
This version of Employee Plans News may be found here: https://benefitslink.com/src/irs/irs-employee-plans-news-01262024.pdf
Employment (Posted 4/24/2024)-DOL Issues:-
Fact Sheet #28E:Requesting Leave under the Family and Medical Leave Act
Fact Sheet #28D: Employer Notification Requirements under the Family and Medical Leave Act
Fact Sheet #28H:12-month period under the Family and Medical Leave Act
Fact Sheet #28I: Counting Leave Use under the Family and Medical Leave Act
Fact Sheet #28L: Leave under the Family and Medical Leave Act When You and Your Spouse Work for the Same Employer
See the Fact Sheets for details.
Fact Sheet #28E may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28e-fmla-employee-notice
Fact Sheet #28D may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28d-fmla-employer%20notification
Fact Sheet #28H may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28h-fmla-12-month-period
Fact Sheet #28I may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28i-fmla-leave-calculation
Fact Sheet #28L may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28l-fmla-spouse
Fact Sheet #28E:Requesting Leave under the Family and Medical Leave Act
Fact Sheet #28D: Employer Notification Requirements under the Family and Medical Leave Act
Fact Sheet #28H:12-month period under the Family and Medical Leave Act
Fact Sheet #28I: Counting Leave Use under the Family and Medical Leave Act
Fact Sheet #28L: Leave under the Family and Medical Leave Act When You and Your Spouse Work for the Same Employer
See the Fact Sheets for details.
Fact Sheet #28E may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28e-fmla-employee-notice
Fact Sheet #28D may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28d-fmla-employer%20notification
Fact Sheet #28H may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28h-fmla-12-month-period
Fact Sheet #28I may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28i-fmla-leave-calculation
Fact Sheet #28L may be found here: https://www.dol.gov/agencies/whd/fact-sheets/28l-fmla-spouse
Employee Benefits-PBGC Issues Statement Of Reporting And Disclosure Requirements (4/22/2024)
See the Statement for details. They may be found here: https://www.pbgc.gov/prac/reporting-and-disclosure/requirements
See the Statement for details. They may be found here: https://www.pbgc.gov/prac/reporting-and-disclosure/requirements
Employee Benefits-DOL Issues Procedures Governing the Filing and Processing of Prohibited Transaction Exemption Applications (Posted 4/19/2024)
Here is a summary of the Procedures:
The Department of Labor (the Department) is adopting amendments to its existing procedure governing the filing and processing of applications for administrative exemptions from the prohibited transaction provisions of the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code of 1986 (the Code), and the Federal Employees' Retirement System Act of 1986 (FERSA) (the Amendments). The Secretary of Labor (the Secretary) is authorized to grant exemptions from the prohibited transaction provisions of ERISA, the Code, and FERSA and to establish an exemption procedure to provide for such relief. The Amendments update and supersede the Department's existing prohibited transaction exemption procedures. The amendments are effective April 8, 2024.
See the Procedures for details. They may be found here: https://www.federalregister.gov/documents/2024/01/24/2024-00586/procedures-governing-the-filing-and-processing-of-prohibited-transaction-exemption-applications
Here is a summary of the Procedures:
The Department of Labor (the Department) is adopting amendments to its existing procedure governing the filing and processing of applications for administrative exemptions from the prohibited transaction provisions of the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code of 1986 (the Code), and the Federal Employees' Retirement System Act of 1986 (FERSA) (the Amendments). The Secretary of Labor (the Secretary) is authorized to grant exemptions from the prohibited transaction provisions of ERISA, the Code, and FERSA and to establish an exemption procedure to provide for such relief. The Amendments update and supersede the Department's existing prohibited transaction exemption procedures. The amendments are effective April 8, 2024.
See the Procedures for details. They may be found here: https://www.federalregister.gov/documents/2024/01/24/2024-00586/procedures-governing-the-filing-and-processing-of-prohibited-transaction-exemption-applications
Health Care-Government Issues FAQS About Affordable Care Act Implementation PART 64 (Posted 4/17/2024)
The Government says as to these FAQs: Set out below are Frequently Asked Questions (FAQs) regarding implementation of certain provisions of the Affordable Care Act (ACA). These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/ laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementationfaqs and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
See the FAQs for details. They may be found here: https://www.cms.gov/files/document/faqs-part-64.pdf
The Government says as to these FAQs: Set out below are Frequently Asked Questions (FAQs) regarding implementation of certain provisions of the Affordable Care Act (ACA). These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/ laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementationfaqs and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
See the FAQs for details. They may be found here: https://www.cms.gov/files/document/faqs-part-64.pdf
Retirement Benefits-IRS Issues Publication 915: Social Security and Equivalent Railroad Retirement Benefits (For use in preparing 2023 Returns) (Posted 4/15/2024)
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-prior/p915--2023.pdf
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-prior/p915--2023.pdf
Employee Benefits-IRS Issues Update to Minimum Present Value Requirements for Defined Benefit Plan Distributions (Posted 4/12/2024)
The IRS says of this Update:
This document sets forth final regulations providing guidance relating to the minimum present value requirements applicable to certain defined benefit pension plans. These regulations provide guidance on changes made by the Pension Protection Act of 2006 to the prescribed interest rate and mortality table and other guidance, including rules regarding the treatment of preretirement mortality discounts and Social Security level income options. These regulations affect participants, beneficiaries, sponsors, and administrators of defined benefit pension plans.
See the Update for details. It may be found here: https://www.federalregister.gov/documents/2024/01/19/2024-00978/update-to-minimum-present-value-requirements-for-defined-benefit-plan-distributions
The IRS says of this Update:
This document sets forth final regulations providing guidance relating to the minimum present value requirements applicable to certain defined benefit pension plans. These regulations provide guidance on changes made by the Pension Protection Act of 2006 to the prescribed interest rate and mortality table and other guidance, including rules regarding the treatment of preretirement mortality discounts and Social Security level income options. These regulations affect participants, beneficiaries, sponsors, and administrators of defined benefit pension plans.
See the Update for details. It may be found here: https://www.federalregister.gov/documents/2024/01/19/2024-00978/update-to-minimum-present-value-requirements-for-defined-benefit-plan-distributions
Employee Benefits-IRS Issues 2023 Instructions For Forms 1099-R and 5498 (Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.) (Posted 4/10/2024)
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i1099r--2023.pdf
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i1099r--2023.pdf
Employee Benefits-IRS Issues Employee Stock Ownership Plan Listing of Required Modifications and Information Package (ESOP LRM): For use with Pre-approved Plans intending to satisfy the requirements of Code § 4975(e)(7) (Posted 4/8/2024)
See the ESOP LRM for details. It may be found here: https://www.irs.gov/pub/irs-tege/esop-lrm0124.pdf
See the ESOP LRM for details. It may be found here: https://www.irs.gov/pub/irs-tege/esop-lrm0124.pdf
Employee Benefits-IRS Issues Cash or Deferred Arrangement (CODA) Listing of Required Modifications and Information Package (LRMs) (Posted 4/5/2024)
See the LRMs for details. They may be found here: https://www.irs.gov/pub/irs-tege/coda-lrm0124.pdf
See the LRMs for details. They may be found here: https://www.irs.gov/pub/irs-tege/coda-lrm0124.pdf
Employee Benefits-IRS Issues Defined Contribution Pre-Approved Plans Listing of Required Modifications and Information Package (LRM) Revised January 2024 (Posted 4/3/2024)
See the LRM for details. It may be found here: https://www.irs.gov/pub/irs-tege/dc-lrm0124.pdf
See the LRM for details. It may be found here: https://www.irs.gov/pub/irs-tege/dc-lrm0124.pdf
Employee Benefits-IRS IssuesFrequently Asked Questions (FAQs): Pension-Linked Emergency Savings Accounts (4/1/2024)
DOLsays the following about these FAQs: The SECURE 2.0 Act of 2022, enacted Dec. 29, 2022, as Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328, (SECURE 2.0) authorizes plans to include a new “pension-linked emergency savings account” (PLESA) feature. The PLESA rules are found in new sections 801 through 804 of the Employee Retirement Income Security Act of 1974 (ERISA), and in section 402A(e) of the Internal Revenue Code (Code), which include provisions that are largely parallel to the new ERISA provisions. The PLESA provisions are effective for plan years beginning after December 31, 2023.
These frequently asked questions (FAQs) provide general compliance information under ERISA regarding PLESAs. These FAQs have been prepared by the Department of Labor (Department) in consultation with the Department of the Treasury and Internal Revenue Service (IRS). These FAQs are designed to help employers, plan sponsors, and plan fiduciaries of ERISA plans, as well as participants and beneficiaries in such plans, understand and benefit from the new law.
See the FAQs for details They may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/pension-linked-emergency-savings-accounts
DOLsays the following about these FAQs: The SECURE 2.0 Act of 2022, enacted Dec. 29, 2022, as Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328, (SECURE 2.0) authorizes plans to include a new “pension-linked emergency savings account” (PLESA) feature. The PLESA rules are found in new sections 801 through 804 of the Employee Retirement Income Security Act of 1974 (ERISA), and in section 402A(e) of the Internal Revenue Code (Code), which include provisions that are largely parallel to the new ERISA provisions. The PLESA provisions are effective for plan years beginning after December 31, 2023.
These frequently asked questions (FAQs) provide general compliance information under ERISA regarding PLESAs. These FAQs have been prepared by the Department of Labor (Department) in consultation with the Department of the Treasury and Internal Revenue Service (IRS). These FAQs are designed to help employers, plan sponsors, and plan fiduciaries of ERISA plans, as well as participants and beneficiaries in such plans, understand and benefit from the new law.
See the FAQs for details They may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/pension-linked-emergency-savings-accounts
Employee Benefits-PBGC Provides Adjustments Of Civil Penalties For Inflation (Posted 3/29/2024)
According to the PBGC, the adjustments have the following purpose:
This rule is needed to carry out the requirements of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Office of Management and Budget guidance M–24–07. The rule adjusts, as required for 2024, the maximum civil penalties under 29 CFR parts 4071 and 4302 that the Pension Benefit Guaranty Corporation (PBGC) may assess for failure to provide certain notices or other material information and certain multiemployer plan notices.
PBGC's legal authority for this action comes from the Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and from sections 4002(b)(3), 4071, and 4302 of the Employee Retirement Income Security Act of 1974 (ERISA).
See the Adjustments for details. They may be found here: https://www.federalregister.gov/documents/2024/01/12/2024-00488/adjustment-of-civil-penalties-for-inflation
According to the PBGC, the adjustments have the following purpose:
This rule is needed to carry out the requirements of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Office of Management and Budget guidance M–24–07. The rule adjusts, as required for 2024, the maximum civil penalties under 29 CFR parts 4071 and 4302 that the Pension Benefit Guaranty Corporation (PBGC) may assess for failure to provide certain notices or other material information and certain multiemployer plan notices.
PBGC's legal authority for this action comes from the Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and from sections 4002(b)(3), 4071, and 4302 of the Employee Retirement Income Security Act of 1974 (ERISA).
See the Adjustments for details. They may be found here: https://www.federalregister.gov/documents/2024/01/12/2024-00488/adjustment-of-civil-penalties-for-inflation
Employee Benefits-IRS Issues Notice 2024-22: Guidance on Anti-Abuse Rules Under Section 127 of the SECURE 2.0 Act of 2022 and Certain Other Issues with Respect to Pension-Linked Emergency Savings Accounts (Posted 3/27/2024)
According to the IRS, the Notice has the following purpose:
This notice provides guidance with respect to section 127 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 3559 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Section 127 of the SECURE 2.0 Act provides for the creation of Pension-Linked Emergency Savings Accounts (PLESAs) effective for plan years beginning after December 31, 2023.
This notice is not intended to provide comprehensive guidance with respect to section 127 of the SECURE 2.0 Act, but rather it provides initial guidance regarding anti-abuse rules under section 402A(e)(12) of the Internal Revenue Code (Code) to assist in the implementation of SECURE 2.0 Act section 127 provisions. This notice also addresses whether Rev. Rul. 74-55, 1974-1 C.B. 89, and Rev. Rul. 74-56, 1974-1 C.B. 90, are applicable to PLESAs.
The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) invite comments on this guidance and any other aspect of section 127(e) and (f) of the SECURE 2.0 Act.
See Notice 2024-22 for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-22.pdf
According to the IRS, the Notice has the following purpose:
This notice provides guidance with respect to section 127 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 3559 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Section 127 of the SECURE 2.0 Act provides for the creation of Pension-Linked Emergency Savings Accounts (PLESAs) effective for plan years beginning after December 31, 2023.
This notice is not intended to provide comprehensive guidance with respect to section 127 of the SECURE 2.0 Act, but rather it provides initial guidance regarding anti-abuse rules under section 402A(e)(12) of the Internal Revenue Code (Code) to assist in the implementation of SECURE 2.0 Act section 127 provisions. This notice also addresses whether Rev. Rul. 74-55, 1974-1 C.B. 89, and Rev. Rul. 74-56, 1974-1 C.B. 90, are applicable to PLESAs.
The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) invite comments on this guidance and any other aspect of section 127(e) and (f) of the SECURE 2.0 Act.
See Notice 2024-22 for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-22.pdf
ERISA-Ninth Circuit Considers Whether A Health Care Provider Can Seek benefits Under ERISA (3/25/2024)
In South Coast Specialty Surgery Center, Inc. v. Blue Cross of California, No. 22-55717 (9th Cir. 1/10/2024), the following occurred:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s dismissal of an ERISA action brought by South Coast Specialty Surgery Center, Inc., and remanded.
South Coast, a healthcare provider, sought reimbursement from Blue Cross of California, d/b/a Anthem Blue Cross, an insurer and claims administrator, for the costs of medical services provided to South Coast’s patients. South Coast, neither a plan participant nor a beneficiary, could not bring a direct enforcement action under ERISA, but it argued that it could enforce ERISA’s protections directly because its patients assigned it the right to sue for the non-payment of plan benefits via an “Assignment of Benefits” form.
The Panel held that, under longstanding precedent, a healthcare provider has derivative authority to enforce ERISA’s protections if it has received a valid assignment of rights. Construing South Coast’s “Assignment of Benefits” form, the Panel held that South Coast’s patients effectuated a valid assignment. Accordingly, South Coast had the right to seek payment of benefits and to sue for non-payment.
See the case for details. It may be found here: https://cases.justia.com/federal/appellate-courts/ca9/22-55717/22-55717-2024-01-10.pdf?ts=1704906087
In South Coast Specialty Surgery Center, Inc. v. Blue Cross of California, No. 22-55717 (9th Cir. 1/10/2024), the following occurred:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s dismissal of an ERISA action brought by South Coast Specialty Surgery Center, Inc., and remanded.
South Coast, a healthcare provider, sought reimbursement from Blue Cross of California, d/b/a Anthem Blue Cross, an insurer and claims administrator, for the costs of medical services provided to South Coast’s patients. South Coast, neither a plan participant nor a beneficiary, could not bring a direct enforcement action under ERISA, but it argued that it could enforce ERISA’s protections directly because its patients assigned it the right to sue for the non-payment of plan benefits via an “Assignment of Benefits” form.
The Panel held that, under longstanding precedent, a healthcare provider has derivative authority to enforce ERISA’s protections if it has received a valid assignment of rights. Construing South Coast’s “Assignment of Benefits” form, the Panel held that South Coast’s patients effectuated a valid assignment. Accordingly, South Coast had the right to seek payment of benefits and to sue for non-payment.
See the case for details. It may be found here: https://cases.justia.com/federal/appellate-courts/ca9/22-55717/22-55717-2024-01-10.pdf?ts=1704906087
Employment- DOL Issues Fact Sheet 13: Employee or Independent Contractor Classification Under the Fair Labor Standards Act (FLSA) (Fact Sheet Revised January 2024)(Posted 3/22/2024)
The DOL says the following about the Fact Sheet: This fact sheet provides general information on how to determine if a worker is an employee or independent contractor under the FLSA. Misclassification occurs when a worker is an employee under the FLSA but is instead treated as an independent contractor by the employer. Misclassification may deny workers minimum wage, overtime pay, and other protections. Also, employers that comply with the law are placed at a competitive disadvantage compared to other businesses that misclassify employees. It is an employer’s responsibility to determine if a worker is an employee or independent contractor under the FLSA.
See the Fact Sheet for details. It may be found here: https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship
The DOL says the following about the Fact Sheet: This fact sheet provides general information on how to determine if a worker is an employee or independent contractor under the FLSA. Misclassification occurs when a worker is an employee under the FLSA but is instead treated as an independent contractor by the employer. Misclassification may deny workers minimum wage, overtime pay, and other protections. Also, employers that comply with the law are placed at a competitive disadvantage compared to other businesses that misclassify employees. It is an employer’s responsibility to determine if a worker is an employee or independent contractor under the FLSA.
See the Fact Sheet for details. It may be found here: https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship
Employee Benefits-IRS Issues Top-Heavy Plans: Employee Plans Issues Resource Guide (Guide Revised 7/25/2023) (Posted 3/20/2024)
The background: The top-heavy rules were added to the Internal Revenue Code (IRC 416) by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), P.L. 97-248, Section 240, effective for plan years beginning after December 31, 1983, and amended by Sections 524 and 713(f) of the Tax Reform Act of 1984 (P.L. 98-369). Generally, to be qualified under IRC 401(a), a plan must contain language which meets the requirements of IRC 416, and which will be effective if the plan becomes top-heavy per IRC 401(a)(10)(B).
See the Guide for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p5875.pdf
The background: The top-heavy rules were added to the Internal Revenue Code (IRC 416) by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), P.L. 97-248, Section 240, effective for plan years beginning after December 31, 1983, and amended by Sections 524 and 713(f) of the Tax Reform Act of 1984 (P.L. 98-369). Generally, to be qualified under IRC 401(a), a plan must contain language which meets the requirements of IRC 416, and which will be effective if the plan becomes top-heavy per IRC 401(a)(10)(B).
See the Guide for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p5875.pdf
Employment-DOL Issues Regulations On Employment Or Independent Contractor Classification Under The Fair Labor Standards Act (Posted 3/18/2024)
The DOL says that it is modifying Wage and Hour Division regulations to replace its analysis for determining employee or independent contractor classification under the Fair Labor Standards Act (FLSA or Act) with an analysis that is more consistent with judicial precedent and the Act’s text and purpose.
The modified regulations may be found here: https://public-inspection.federalregister.gov/2024-00067.pdf
The DOL says that it is modifying Wage and Hour Division regulations to replace its analysis for determining employee or independent contractor classification under the Fair Labor Standards Act (FLSA or Act) with an analysis that is more consistent with judicial precedent and the Act’s text and purpose.
The modified regulations may be found here: https://public-inspection.federalregister.gov/2024-00067.pdf
Employee Benefits-PBGC Issues e-Filing Portal Login.gov FAQs (Posted 3/15/2024)
According to the PBGC, Login.gov is a secure sign-in service used by the public to sign in to participating government agencies. Login.gov uses the highest standards of security to keep your information safe by using two-factor authentication, similar to what you are probably used to when logging on to a website to check your banking or credit card information.
Once you set up a Login.gov account, you will be able to use your Login.gov credentials (i.e., email address and password) to access any agency that partners with Login.gov. This streamlines your process and eliminates the need to remember multiple usernames and passwords.
See the FAQs for details. They may be found here: https://www.pbgc.gov/prac/e-filing-portal-logingov-faqs
According to the PBGC, Login.gov is a secure sign-in service used by the public to sign in to participating government agencies. Login.gov uses the highest standards of security to keep your information safe by using two-factor authentication, similar to what you are probably used to when logging on to a website to check your banking or credit card information.
Once you set up a Login.gov account, you will be able to use your Login.gov credentials (i.e., email address and password) to access any agency that partners with Login.gov. This streamlines your process and eliminates the need to remember multiple usernames and passwords.
See the FAQs for details. They may be found here: https://www.pbgc.gov/prac/e-filing-portal-logingov-faqs
Employee Benefits-PBGC Issues Comprehensive Premium Filing Instructions For 2024 Plan Year (Posted 3/13/2024)
The Instructions may be found here: https://www.pbgc.gov/sites/default/files/documents/2024-premium-payment-instructions.pdf
The Instructions may be found here: https://www.pbgc.gov/sites/default/files/documents/2024-premium-payment-instructions.pdf
Employee Benefits-IRS Says That Form 5558 Will Be Postponed For Electronic Filing Through EFAST Until January 1, 2025 (Posted 3/11/2024)
The IRS Statement is here: https://www.irs.gov/retirement-plans/form-5500-corner
The IRS Statement is here: https://www.irs.gov/retirement-plans/form-5500-corner
Employee Benefits-IRS Issues 2024 Publication 15-B, Employer’s Tax Guide To Fringe Benefits (Posted 3/8/2024)
Here is What’s New:
Cents-per-mile rule. The business mileage rate for 2024 is 67 cents per mile. You may use this rate to reimburse an employee for business use of a personal vehicle, and under certain conditions, you may use the rate under the cents-per-mile rule to value the personal use of a vehicle you provide to an employee. See Cents-Per-Mile Rule in section 3.
Qualified parking exclusion and commuter transportation benefit. For 2024, the monthly exclusion for qualified parking is $315 and the monthly exclusion for commuter highway vehicle transportation and transit passes is $315. See Qualified Transportation Benefits in section 2.
Contribution limit on a health flexible spending arrangement (FSA). For plan years beginning in 2024, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $3,200.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-prior/p15b--2024.pdf
Here is What’s New:
Cents-per-mile rule. The business mileage rate for 2024 is 67 cents per mile. You may use this rate to reimburse an employee for business use of a personal vehicle, and under certain conditions, you may use the rate under the cents-per-mile rule to value the personal use of a vehicle you provide to an employee. See Cents-Per-Mile Rule in section 3.
Qualified parking exclusion and commuter transportation benefit. For 2024, the monthly exclusion for qualified parking is $315 and the monthly exclusion for commuter highway vehicle transportation and transit passes is $315. See Qualified Transportation Benefits in section 2.
Contribution limit on a health flexible spending arrangement (FSA). For plan years beginning in 2024, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $3,200.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-prior/p15b--2024.pdf
Employee Benefits-IRS Issues Memorandum On Required Minimum Distributions (Posted 3/6/2024)
See the Memorandum for details. It may be found here: https://benefitslink.com/src/irs/irs-epnews-20231228.pdf
See the Memorandum for details. It may be found here: https://benefitslink.com/src/irs/irs-epnews-20231228.pdf
ERISA-Tenth Circuit Considers Claims Related To A Term Life Insurance Policy (Posted 3/4/2024)
The case is Huff v. BP Corporation North America, Inc., No. 23-5022 (10th Cir. Dec. 20, 2023). See the case for details. It may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110971747.pdf
The case is Huff v. BP Corporation North America, Inc., No. 23-5022 (10th Cir. Dec. 20, 2023). See the case for details. It may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110971747.pdf
Employee Benefits-IRS Issues Notice 2024-2, Miscellaneous Changes Under the SECURE 2.0 Act of 2022 (Posted 3/1/2024)
According to the IRS:
This notice provides guidance in the form of questions and answers with respect to certain provisions of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Specifically, this notice addresses issues under the following sections of the SECURE 2.0 Act: section 101 (expanding automatic enrollment in retirement plans), section 102 (modification of credit for small employer pension plan startup costs), section 112 (military spouse retirement plan eligibility credit for small employers), section 113 (small immediate financial incentives for contributing to a plan), section 117 (contribution limit for SIMPLE plans), section 326 (exception to the additional tax on early distributions from qualified plans for individuals with a terminal illness), section 332 (employers allowed to replace SIMPLE retirement accounts with safe harbor 401(k) plans during a year), section 348 (cash balance), section 350 (safe harbor for correction of employee elective deferral failures), section 501 (provisions relating to plan amendments), section 601 (SIMPLE and SEP Roth IRAs), and section 604 (optional treatment of employer contributions or nonelective contributions as Roth contributions).
This notice is not intended to provide comprehensive guidance as to the specific provisions of the SECURE 2.0 Act, but rather is intended to provide guidance on discreet issues to assist in commencing implementation of these provisions. The Department of the Treasury (Treasury Department) and the Internal Revenue Service(IRS) continue to analyze the various provisions of the SECURE 2.0 Act and anticipate issuing further guidance, including regulations, as appropriate.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-02.pdf
According to the IRS:
This notice provides guidance in the form of questions and answers with respect to certain provisions of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Specifically, this notice addresses issues under the following sections of the SECURE 2.0 Act: section 101 (expanding automatic enrollment in retirement plans), section 102 (modification of credit for small employer pension plan startup costs), section 112 (military spouse retirement plan eligibility credit for small employers), section 113 (small immediate financial incentives for contributing to a plan), section 117 (contribution limit for SIMPLE plans), section 326 (exception to the additional tax on early distributions from qualified plans for individuals with a terminal illness), section 332 (employers allowed to replace SIMPLE retirement accounts with safe harbor 401(k) plans during a year), section 348 (cash balance), section 350 (safe harbor for correction of employee elective deferral failures), section 501 (provisions relating to plan amendments), section 601 (SIMPLE and SEP Roth IRAs), and section 604 (optional treatment of employer contributions or nonelective contributions as Roth contributions).
This notice is not intended to provide comprehensive guidance as to the specific provisions of the SECURE 2.0 Act, but rather is intended to provide guidance on discreet issues to assist in commencing implementation of these provisions. The Department of the Treasury (Treasury Department) and the Internal Revenue Service(IRS) continue to analyze the various provisions of the SECURE 2.0 Act and anticipate issuing further guidance, including regulations, as appropriate.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-02.pdf
Taxation-IRS Issues Publication 15-A, Employer’s Supplemental Tax Guide (For Use In 2024) (2/28/2024)
Here is What’s New:
Social security and Medicare tax for 2024. The social security tax rate is 6.2% each for the employee and employer. The social security wage base limit is $168,600. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2023. There is no wage base limit for Medicare tax. Social security and Medicare taxes apply to the wages of household workers you pay $2,700 or more in cash wages in 2024. Social security and Medicare taxes apply to election workers who are paid $2,300 or more in cash or an equivalent form of compensation in 2024.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-prior/p15a--2024.pdf
Here is What’s New:
Social security and Medicare tax for 2024. The social security tax rate is 6.2% each for the employee and employer. The social security wage base limit is $168,600. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2023. There is no wage base limit for Medicare tax. Social security and Medicare taxes apply to the wages of household workers you pay $2,700 or more in cash wages in 2024. Social security and Medicare taxes apply to election workers who are paid $2,300 or more in cash or an equivalent form of compensation in 2024.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-prior/p15a--2024.pdf
Taxation-IRS Issues Notice 2024-1:Calculating the qualifying payment amount in 2024 (Posted 2/26/2024)
The Notice states that is has the following purpose and scope:
Pursuant to Treas. Reg. § 54.9816-6T(c), 29 CFR 2590.716-6(c), and 45 CFR 149.140(c), this notice provides the percentage increase for calculating the qualifying payment amounts (QPAs) for items and services furnished during 2024 for purposes of sections 9816 and 9817 of the Internal Revenue Code (Code), sections 716 and 717 of the Employee Retirement Income Security Act of 1974 (ERISA), and sections 2799A-1 and 2799A-2 of the Public Health Service Act (PHS Act). These provisions, added by the No Surprises Act, provide protections against surprise medical bills in certain circumstances. This notice was drafted in consultation with the Departments of Labor and Health and Human Services. Similar guidance for items and services furnished during 2022 and 2023 was published in Revenue Procedure 2022-11, Notice 2022-11, and Notice 2023-4.2.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-01.pdf
The Notice states that is has the following purpose and scope:
Pursuant to Treas. Reg. § 54.9816-6T(c), 29 CFR 2590.716-6(c), and 45 CFR 149.140(c), this notice provides the percentage increase for calculating the qualifying payment amounts (QPAs) for items and services furnished during 2024 for purposes of sections 9816 and 9817 of the Internal Revenue Code (Code), sections 716 and 717 of the Employee Retirement Income Security Act of 1974 (ERISA), and sections 2799A-1 and 2799A-2 of the Public Health Service Act (PHS Act). These provisions, added by the No Surprises Act, provide protections against surprise medical bills in certain circumstances. This notice was drafted in consultation with the Departments of Labor and Health and Human Services. Similar guidance for items and services furnished during 2022 and 2023 was published in Revenue Procedure 2022-11, Notice 2022-11, and Notice 2023-4.2.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-01.pdf
Employee Benefits-IRS Issues (on 12/15/2023) Revised Exempt Organizations Technical Guide TG 48: Unrelated Business Income Tax (Posted 2/23/2024)
The Guide may be found here: https://www.irs.gov/pub/irs-pdf/p5894.pdf
The Guide may be found here: https://www.irs.gov/pub/irs-pdf/p5894.pdf
ERISA-First Circuit Considers Timliness Of The Filing Of A Suit Under ERISA For Long-Term Disability Benefits (Posted 2/21/2024)
In Smith v. Prudential Ins. Co. of Am., No.23-1168 (1st Cir. Dec. 6, 2023), the First Circuit Court of Appeals says the following:
Brian Smith sued Prudential for breach of fiduciary duty after it terminated his long-term disability benefits under an insurance policy it issued. Although the policy specified a three-year limitations period to file a lawsuit, it also, inexplicably, started the limitations clock on the date Smith was required to submit proof that he was disabled, not on the date Prudential allegedly breached the policy by stopping payment. As a result, the clock had already run out by the time Smith sued.
Smith now appeals from the entry of summary judgment against him on the ground that his lawsuit was filed too late. He asks us to reverse based on three arguments litigated by the parties below but not addressed by the district court, including a potentially winning argument that enforcing the limitations scheme in this case would violate Rhode Island public policy. There are compelling reasons for concluding that the limitations scheme here may indeed run contrary to Rhode Island public policy, and holding so would mean a ruling in Smith's favor. But because we believe that reversing and remanding on that ground arguably would amount to an expansion of Rhode Island law, we certify the public policy question to the Rhode Island Supreme Court.
The case may be found here: http://media.ca1.uscourts.gov/pdf.opinions/23-1168P-01A.pdf
In Smith v. Prudential Ins. Co. of Am., No.23-1168 (1st Cir. Dec. 6, 2023), the First Circuit Court of Appeals says the following:
Brian Smith sued Prudential for breach of fiduciary duty after it terminated his long-term disability benefits under an insurance policy it issued. Although the policy specified a three-year limitations period to file a lawsuit, it also, inexplicably, started the limitations clock on the date Smith was required to submit proof that he was disabled, not on the date Prudential allegedly breached the policy by stopping payment. As a result, the clock had already run out by the time Smith sued.
Smith now appeals from the entry of summary judgment against him on the ground that his lawsuit was filed too late. He asks us to reverse based on three arguments litigated by the parties below but not addressed by the district court, including a potentially winning argument that enforcing the limitations scheme in this case would violate Rhode Island public policy. There are compelling reasons for concluding that the limitations scheme here may indeed run contrary to Rhode Island public policy, and holding so would mean a ruling in Smith's favor. But because we believe that reversing and remanding on that ground arguably would amount to an expansion of Rhode Island law, we certify the public policy question to the Rhode Island Supreme Court.
The case may be found here: http://media.ca1.uscourts.gov/pdf.opinions/23-1168P-01A.pdf
Employee Benefits-IRS Issues Rev. Rul. 2024-1, Tables For Covered Compensation (2/19/2024)
The Rev. Rul. provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, for the 2024 plan year.
See the Rev. Rul. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rr-24-01.pdf
The Rev. Rul. provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, for the 2024 plan year.
See the Rev. Rul. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rr-24-01.pdf
Employee Benefits-IRS Issues 2023 Instructions For Form 8941, Credit for Small Employer Health Insurance Premiums (Posted 2/15/2024)
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8941--2023.pdf
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8941--2023.pdf
Employment-Eleventh Circuit Considers Whether The Plaintiff Was Fired In Violation Of The FMLA And Florida State Law (Posted 2/12/2024)
In Lapham v. Walgreen Co., No. 21-10491 (11th Cir. Dec. 13, 2023), the Eleventh Circuit Court of Appeals says the following:
Doris Lapham worked for the Walgreen Co. (“Walgreens”) in various roles and at multiple store locations for over a decade until April 13, 2017, when she was fired for the stated reasons of insubordination and dishonesty. Lapham’s version of events, however, is that she was unfairly fired as a result of her requests for leave under the Family and Medical Leave Act (“FMLA”), 29 U.S.C. §§ 2601–54, so that she could provide care to her disabled son. Lapham alleges that Walgreens both interfered with her attempts to obtain leave in violation of the FMLA and retaliated against her for those attempts in violation of the FMLA and Florida’s Private Sector Whistleblower Act (“FWA”), Fla. Stat. § 448.102 et seq.
However, the district court below ultimately granted summary judgment in favor of Walgreens on all of these claims. This appeal asks us to determine whether the district court erred in granting summary judgment to Walgreens on these claims and, as part of that larger inquiry, what the proper causation standard is for FMLA and FWA retaliation claims. After careful consideration, and with the benefit of oral argument, we hold that the proper causation standard for both FMLA and FWA retaliation claims is but-for causation and that the district court correctly granted summary judgment in favor of Walgreens on Lapham’s retaliation and interference claims. Accordingly, we affirm.
The case may be found here: https://media.ca11.uscourts.gov/opinions/pub/files/202110491.pdf
In Lapham v. Walgreen Co., No. 21-10491 (11th Cir. Dec. 13, 2023), the Eleventh Circuit Court of Appeals says the following:
Doris Lapham worked for the Walgreen Co. (“Walgreens”) in various roles and at multiple store locations for over a decade until April 13, 2017, when she was fired for the stated reasons of insubordination and dishonesty. Lapham’s version of events, however, is that she was unfairly fired as a result of her requests for leave under the Family and Medical Leave Act (“FMLA”), 29 U.S.C. §§ 2601–54, so that she could provide care to her disabled son. Lapham alleges that Walgreens both interfered with her attempts to obtain leave in violation of the FMLA and retaliated against her for those attempts in violation of the FMLA and Florida’s Private Sector Whistleblower Act (“FWA”), Fla. Stat. § 448.102 et seq.
However, the district court below ultimately granted summary judgment in favor of Walgreens on all of these claims. This appeal asks us to determine whether the district court erred in granting summary judgment to Walgreens on these claims and, as part of that larger inquiry, what the proper causation standard is for FMLA and FWA retaliation claims. After careful consideration, and with the benefit of oral argument, we hold that the proper causation standard for both FMLA and FWA retaliation claims is but-for causation and that the district court correctly granted summary judgment in favor of Walgreens on Lapham’s retaliation and interference claims. Accordingly, we affirm.
The case may be found here: https://media.ca11.uscourts.gov/opinions/pub/files/202110491.pdf
ERISA-Fifth Circuit Considers Suit Involving The Imposition Of A Surrender Fee Under An Annuity Contract (Posted 2/9/2024)
The case is Markham v. Variable Annuity Life, No. 22-20540 (5th Cir. 12/14/2023). It may be found here: https://cases.justia.com/federal/appellate-courts/ca5/22-20540/22-20540-2023-12-14.pdf?ts=1702600249
The case is Markham v. Variable Annuity Life, No. 22-20540 (5th Cir. 12/14/2023). It may be found here: https://cases.justia.com/federal/appellate-courts/ca5/22-20540/22-20540-2023-12-14.pdf?ts=1702600249
Employee Benefits-IRS Issues Notice 2024-08, 2024 Standard Mileage Rates (Posted 2/7/2024)
According to the IRS, the Notice has the following purpose:
This notice provides the optional 2024 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan. Additionally, this notice provides the maximum fair market value (FMV) of employer provided automobiles first made available to employees for personal use in calendar year 2024 for which employers may use the fleet-average valuation rule in § 1.61- 21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e).
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-08.pdf
According to the IRS, the Notice has the following purpose:
This notice provides the optional 2024 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan. Additionally, this notice provides the maximum fair market value (FMV) of employer provided automobiles first made available to employees for personal use in calendar year 2024 for which employers may use the fleet-average valuation rule in § 1.61- 21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e).
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-24-08.pdf
Employee Benefits-IRS Issues 2023 Instructions For Form 8915-C, Qualified 2018 Disaster Retirement Plan Distributions and Repayments (Posted 2/5/2024)
Here is What’s New:
Repayments. The repayment period for a qualified 2018 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2018 disaster distribution was received in 2020. Repayments reported on 2023 Form 8915-C can be used to reduce the income reportable on your 2020, 2021, or 2022 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i8915c--2023.pdf
Here is What’s New:
Repayments. The repayment period for a qualified 2018 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2018 disaster distribution was received in 2020. Repayments reported on 2023 Form 8915-C can be used to reduce the income reportable on your 2020, 2021, or 2022 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i8915c--2023.pdf
Employee Benefits-IRS Issues 2023 Form 8881, Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Participation (Posted 2/2/2024)
The Form is here: https://www.irs.gov/pub/irs-prior/f8881--2023.pdf
The Form is here: https://www.irs.gov/pub/irs-prior/f8881--2023.pdf
Employee Benefits-IRS Issues 2024 Form W-4P (and Instructions), Withholding Certificate for Periodic Pension or Annuity Payments (Posted 1/31/2024)
The Form and Instructions are here: https://www.irs.gov/pub/irs-prior/fw4p--2024.pdf
The Form and Instructions are here: https://www.irs.gov/pub/irs-prior/fw4p--2024.pdf
Employee Benefits-IRS Issues 2024 Form W-4R (and Instructions), Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions (Posted 1/29/2024)
The Form and Instructions are here: https://www.irs.gov/pub/irs-prior/fw4r--2024.pdf
The Form and Instructions are here: https://www.irs.gov/pub/irs-prior/fw4r--2024.pdf
Employee Benefits-IRS Issues Form 15397 (and Instructions), Application for Extension of Time to Furnish Recipient Statements (For Forms W-2, W-2G, 1042-S, 1094-C, 1095, 1097, 1098, 1099, 3921, 3922, 5498, and 8596) (Posted 1/26/2024)
The Form and Instructions are here: https://www.irs.gov/pub/irs-pdf/f15397.pdf
The Form and Instructions are here: https://www.irs.gov/pub/irs-pdf/f15397.pdf
Employee Benefits-IRS Issues Instructions For Form 8915-D, Qualified 2019 Disaster Retirement Plan Distributions and Repayments (Posted 1/24/2024)
Here is What’s New with the Form 8915-D:
Repayments. The repayment period for a qualified 2019 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2019 disaster distribution was received in 2020. Repayments reported on 2023 Form 8915-D can be used to reduce the income reportable on your 2020, 2021, 2022, or 2023 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
Eligible retirement plans. Roth SEP and Roth SIMPLE IRAs have been added to the list of eligible retirement plans as of January 1, 2023. See Eligible retirement plan, later, for details.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i8915d--2023.pdf
Here is What’s New with the Form 8915-D:
Repayments. The repayment period for a qualified 2019 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2019 disaster distribution was received in 2020. Repayments reported on 2023 Form 8915-D can be used to reduce the income reportable on your 2020, 2021, 2022, or 2023 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
Eligible retirement plans. Roth SEP and Roth SIMPLE IRAs have been added to the list of eligible retirement plans as of January 1, 2023. See Eligible retirement plan, later, for details.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i8915d--2023.pdf
Employee Benefits-IRS Issues Notice 2023-79, 2023 Required Amendments List for Individually Designed Qualified and Section 403(b) Plans (Posted 1/22/2024)
According to the IRS, the Notice has the following purpose:
This notice sets forth the 2023 Required Amendments List (2023 RA List). The Required Amendments List (RA List) applies to both individually designed plans qualified under section 401(a) of the Internal Revenue Code (Code) (qualified individually designed plans) and individually designed plans that satisfy the requirements of section 403(b) (section 403(b) individually designed plans).
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-79.pdf
According to the IRS, the Notice has the following purpose:
This notice sets forth the 2023 Required Amendments List (2023 RA List). The Required Amendments List (RA List) applies to both individually designed plans qualified under section 401(a) of the Internal Revenue Code (Code) (qualified individually designed plans) and individually designed plans that satisfy the requirements of section 403(b) (section 403(b) individually designed plans).
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-79.pdf
Employee Benefits-IRS Issues 2023 Form 8606 For Nondeductible IRAs (Posted 1/20/2024)
The Form may be found here: https://www.irs.gov/pub/irs-prior/f8606--2023.pdf
The Form may be found here: https://www.irs.gov/pub/irs-prior/f8606--2023.pdf
ERISA-Tenth Circuit Considers Case Regarding Denial Of Healthcare Benefits (Posted 1/16/2024)
In C., et al, v. United Healthcare Insurance Company, No. 22-4082 (10th Cir. 12/5/2023), the Tenth Circuit Court of Appeals of Appeals says the following:
This appeal arises from an action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001–1461, to challenge the denial of healthcare benefits through an employer-sponsored plan. Ian C., the plan participant, claimed coverage for his son, A.C., the beneficiary, to receive care at an inpatient residential treatment center, Catalyst Residential Treatment, for mental-health and substance-abuse issues. The plan authorized UnitedHealthcare Insurance Company (United), the claims fiduciary, to determine A.C.’s eligibility for benefits under the plan. After initially covering A.C.’s treatment at Catalyst, United later denied coverage.
See the case for details and results. The case may be found here: https://cases.justia.com/federal/appellate-courts/ca10/22-4082/22-4082-2023-12-05.pdf?ts=1701795799
In C., et al, v. United Healthcare Insurance Company, No. 22-4082 (10th Cir. 12/5/2023), the Tenth Circuit Court of Appeals of Appeals says the following:
This appeal arises from an action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001–1461, to challenge the denial of healthcare benefits through an employer-sponsored plan. Ian C., the plan participant, claimed coverage for his son, A.C., the beneficiary, to receive care at an inpatient residential treatment center, Catalyst Residential Treatment, for mental-health and substance-abuse issues. The plan authorized UnitedHealthcare Insurance Company (United), the claims fiduciary, to determine A.C.’s eligibility for benefits under the plan. After initially covering A.C.’s treatment at Catalyst, United later denied coverage.
See the case for details and results. The case may be found here: https://cases.justia.com/federal/appellate-courts/ca10/22-4082/22-4082-2023-12-05.pdf?ts=1701795799
Employee Benefits-PBGC Issues Final Rule Pertaining to Allocation Of Assets In Single-Employer Plans Posted 1/12/2024)
The PBGC describes the Final Rule As follows:
This rule amends the Pension Benefit Guaranty Corporation’s regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2024. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. DATES: This rule is effective January 1, 2024.
See the Final Rule for details. It may be found here: https://public-inspection.federalregister.gov/2023-26238.pdf
The PBGC describes the Final Rule As follows:
This rule amends the Pension Benefit Guaranty Corporation’s regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2024. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. DATES: This rule is effective January 1, 2024.
See the Final Rule for details. It may be found here: https://public-inspection.federalregister.gov/2023-26238.pdf
Employee Benefits-DOL Issues FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 63 (Posted 1/10/2024)
DOL begins the FAQs by saying the following:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of certain provisions of the Affordable Care Act (ACA) and Title I (the No Surprises Act) of Division BB of the Consolidated Appropriations Act, 2021. These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
See the FAQs for details. They may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-63
DOL begins the FAQs by saying the following:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of certain provisions of the Affordable Care Act (ACA) and Title I (the No Surprises Act) of Division BB of the Consolidated Appropriations Act, 2021. These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
See the FAQs for details. They may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-63
ERISA-Tenth Circuit Considers Entitlement For Benefits To Cover Treatment For Mental Health Problems and An Eating Disorder (Posted 1/8/2024)
The case is E.W., et al. v. Health Net Life Insurance Company, et al., No. 21-4110 (10th Cir. 11/21/2023). It may be found here: https://cases.justia.com/federal/appellate-courts/ca10/21-4110/21-4110-2023-11-21.pdf?ts=1700588020
The case is E.W., et al. v. Health Net Life Insurance Company, et al., No. 21-4110 (10th Cir. 11/21/2023). It may be found here: https://cases.justia.com/federal/appellate-courts/ca10/21-4110/21-4110-2023-11-21.pdf?ts=1700588020
Employee Benefits-IRS Issues Form 8508, Application for a Waiver from Electronic Filing of Information Returns (Posted 1/4/2024)
The Form may be found here: https://www.irs.gov/pub/irs-pdf/f8508.pdf
The Form may be found here: https://www.irs.gov/pub/irs-pdf/f8508.pdf
Employee Benefits-IRS Issues Publication 794 On Favorable Determination Letters (Posted 1/2/2024)
The IRS introduces the Publication by saying: This publication explains the significance of a favorable determination letter, points out some features that may affect the tax status of an employee retirement plan and nullify the determination letter without specific notice from us, and provides general information on the reporting requirements for the plan.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p794.pdf
The IRS introduces the Publication by saying: This publication explains the significance of a favorable determination letter, points out some features that may affect the tax status of an employee retirement plan and nullify the determination letter without specific notice from us, and provides general information on the reporting requirements for the plan.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p794.pdf
Employee Benefits-IRS Issues Rev. Proc. 2023-37, Dealing With Rules For Qualified And 403(b) Plans (Posted 12/28/2023)
The IRS says the following about the Rev. Proc.:
This revenue procedure sets forth the rules regarding Qualified Preapproved Plans and Section 403(b) Pre-approved Plans, and combines, conforms, clarifies, and updates rules for Qualified Pre-approved Plans and Section 403(b) Preapproved Plans previously set forth in prior revenue procedures, as described in section 1.01(1) through (3).1 Combining these prior revenue procedures allows for the rules for the different types of Pre-approved Plans to be more easily conformed to each other, to the extent practicable.
See the Rev. Proc. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-23-37.pdf
The IRS says the following about the Rev. Proc.:
This revenue procedure sets forth the rules regarding Qualified Preapproved Plans and Section 403(b) Pre-approved Plans, and combines, conforms, clarifies, and updates rules for Qualified Pre-approved Plans and Section 403(b) Preapproved Plans previously set forth in prior revenue procedures, as described in section 1.01(1) through (3).1 Combining these prior revenue procedures allows for the rules for the different types of Pre-approved Plans to be more easily conformed to each other, to the extent practicable.
See the Rev. Proc. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-23-37.pdf
ERISA-Second Circuit Considers Breach Of Fiduciary Claim Involving A 403(b) Plan (Posted 12/26/2023)
In Cunningham v. Cornell University, No. 21-88 (2nd Cir. 11/14/2023), the Second Circuit Court of Appeals says the following:
The plaintiff-appellant class participates in “403(b)” retirement plans administered by Cornell University (“Cornell”). Plaintiffs brought this suit against Cornell and its appointed fiduciaries alleging a number of breaches of their fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”). Following motion practice in the United States District Court for the Southern District of New York (Castel, J.), plaintiffs appeal from entry of judgment in defendants’ favor on all but one claim, which was settled by the parties.
On appeal, plaintiffs challenge: (1) the dismissal of their claim that Cornell entered into a “prohibited transaction,” pursuant to 29 U.S.C. § 1106(a)(1)(C), by paying the plans’ recordkeepers unreasonable compensation, (2) the “parsing” of a single count alleging a breach of fiduciary duty into separate sub-claims at the motion to dismiss stage, (3) the award of summary judgment against plaintiffs for failure to show loss on their claim that defendants breached their duty of prudence by failing to monitor and control recordkeeping costs, and (4) the award of summary judgment to defendants on plaintiffs’ claims that Cornell breached its duty of prudence by failing to remove underperforming investment options and by offering higher-cost retail share classes of mutual funds, rather than lower-cost institutional shares.
Because we agree with the ultimate disposition of each of these claims, we AFFIRM the district court’s judgment. Defendants-appellees conditionally cross-appeal, in the event that the judgment is not affirmed, to challenge the district court’s ruling that plaintiffs were entitled to a jury trial rather than a bench trial. As the judgment is affirmed, we dismiss the cross-appeals as moot.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca2/21-88/21-88-2023-11-14.pdf?ts=1699975849
In Cunningham v. Cornell University, No. 21-88 (2nd Cir. 11/14/2023), the Second Circuit Court of Appeals says the following:
The plaintiff-appellant class participates in “403(b)” retirement plans administered by Cornell University (“Cornell”). Plaintiffs brought this suit against Cornell and its appointed fiduciaries alleging a number of breaches of their fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”). Following motion practice in the United States District Court for the Southern District of New York (Castel, J.), plaintiffs appeal from entry of judgment in defendants’ favor on all but one claim, which was settled by the parties.
On appeal, plaintiffs challenge: (1) the dismissal of their claim that Cornell entered into a “prohibited transaction,” pursuant to 29 U.S.C. § 1106(a)(1)(C), by paying the plans’ recordkeepers unreasonable compensation, (2) the “parsing” of a single count alleging a breach of fiduciary duty into separate sub-claims at the motion to dismiss stage, (3) the award of summary judgment against plaintiffs for failure to show loss on their claim that defendants breached their duty of prudence by failing to monitor and control recordkeeping costs, and (4) the award of summary judgment to defendants on plaintiffs’ claims that Cornell breached its duty of prudence by failing to remove underperforming investment options and by offering higher-cost retail share classes of mutual funds, rather than lower-cost institutional shares.
Because we agree with the ultimate disposition of each of these claims, we AFFIRM the district court’s judgment. Defendants-appellees conditionally cross-appeal, in the event that the judgment is not affirmed, to challenge the district court’s ruling that plaintiffs were entitled to a jury trial rather than a bench trial. As the judgment is affirmed, we dismiss the cross-appeals as moot.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca2/21-88/21-88-2023-11-14.pdf?ts=1699975849
Health Benefits-CMS Issues Memorandum on Application of Pharmacy Price Concessions to the Negotiated Price at the Point of Sale Beginning January 1, 2024 (Posted 12/22/2023)
The Memorandum begins as follows: The Centers for Medicare & Medicaid Services (CMS) is issuing this memorandum to highlight upcoming requirements regarding pharmacy price concessions effective January 1, 2024. We also remind Part D plan sponsors and/or their pharmacy benefit managers (PBMs) that CMS strongly encourages them to make necessary cash flow arrangements with network pharmacies in preparation for these upcoming changes.
See the Memorandum for details. It may be found here: https://ncpa.org/sites/default/files/2023-11/pharmacy-price-concessions-hpms-memo.pdf
The Memorandum begins as follows: The Centers for Medicare & Medicaid Services (CMS) is issuing this memorandum to highlight upcoming requirements regarding pharmacy price concessions effective January 1, 2024. We also remind Part D plan sponsors and/or their pharmacy benefit managers (PBMs) that CMS strongly encourages them to make necessary cash flow arrangements with network pharmacies in preparation for these upcoming changes.
See the Memorandum for details. It may be found here: https://ncpa.org/sites/default/files/2023-11/pharmacy-price-concessions-hpms-memo.pdf
Employee Benefits-IRS Issues Rev. Proc. 2023-34, Containing 2024 Inflation-Adjusted Items For Various Code Provisions (Posted 12/20/2023)
According to the IRS, this revenue procedure sets forth inflation-adjusted items for 2024 for various Code provisions as in effect on November 9, 2023. The inflation adjusted items for the Code sections set forth in section 3 of this revenue procedure are generally determined by reference to § 1(f). To the extent amendments to the Code are enacted for 2024 after November 9, 2023, taxpayers should consult additional guidance to determine whether these adjustments remain applicable for 2024.
See the Rev. Proc. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-23-34.pdf
According to the IRS, this revenue procedure sets forth inflation-adjusted items for 2024 for various Code provisions as in effect on November 9, 2023. The inflation adjusted items for the Code sections set forth in section 3 of this revenue procedure are generally determined by reference to § 1(f). To the extent amendments to the Code are enacted for 2024 after November 9, 2023, taxpayers should consult additional guidance to determine whether these adjustments remain applicable for 2024.
See the Rev. Proc. for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-23-34.pdf
Employee Benefits-IRS Issues 2023 Instruction For Form 8889, Health Savings Accounts (HSAs) (Posted 12/18/2023)
Here is What’s New with the Instructions:
Notice 2023-37. Due to the end of the COVID-19 national emergency, Notice 2023-37, 2023-30 I.R.B. 359, available at IRS.gov/irb/2023-30_IRB#NOT-2023-37, modified Notice 2020-15 and clarified the definition of preventive care for purposes of the safe harbor.
Expiration of special COVID-19 rules in Notice 2020-15. Notice 2023-37 provides that the special rules under Notice 2020-15 for reimbursement of treatment and testing for COVID-19 under a high deductible health plan (HDHP) apply only for plan years ending on or before December 31, 2024. For more information, see the discussion of Notice 2020-15 under High Deductible Health Plan, later.
Preventive care safe harbor for COVID-19 testing under an HDHP ends. An HDHP may have a zero deductible for certain preventive care. Notice 2023-37 ends the application of the preventive care safe harbor to COVID-19 testing effective as of July 24, 2023. However, COVID-19 testing remains a qualified medical expense subject to the minimum deductible.
Telehealth and other remote care extended. The Consolidated Appropriations Act 2023 extends the availability of telehealth and other remote care for HSAs. In the case of plan years beginning in 2023 or 2024:
1. An eligible individual may have separate coverage for telehealth and other remote care in addition to an HDHP.
2. An HDHP may have no deductible (or a deductible below the minimum annual deductible) for telehealth and other remote care services.
Insulin products. The Inflation Reduction Act, enacted August 16, 2022, amended section 223 to provide that an HDHP may have a zero deductible for selected insulin products. The amendment applies to plan years beginning after 2022.
Q&As on certain qualified medical expenses. You can find answers to questions regarding whether certain costs related to nutrition, wellness, and general health are medical expenses that may be paid or reimbursed under an HSA at IRS.gov/Individuals/Frequently-asked-questions-aboutmedical-expenses-related-to-nutrition-wellness-and-generalhealth.
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8889--2023.pdf
Here is What’s New with the Instructions:
Notice 2023-37. Due to the end of the COVID-19 national emergency, Notice 2023-37, 2023-30 I.R.B. 359, available at IRS.gov/irb/2023-30_IRB#NOT-2023-37, modified Notice 2020-15 and clarified the definition of preventive care for purposes of the safe harbor.
Expiration of special COVID-19 rules in Notice 2020-15. Notice 2023-37 provides that the special rules under Notice 2020-15 for reimbursement of treatment and testing for COVID-19 under a high deductible health plan (HDHP) apply only for plan years ending on or before December 31, 2024. For more information, see the discussion of Notice 2020-15 under High Deductible Health Plan, later.
Preventive care safe harbor for COVID-19 testing under an HDHP ends. An HDHP may have a zero deductible for certain preventive care. Notice 2023-37 ends the application of the preventive care safe harbor to COVID-19 testing effective as of July 24, 2023. However, COVID-19 testing remains a qualified medical expense subject to the minimum deductible.
Telehealth and other remote care extended. The Consolidated Appropriations Act 2023 extends the availability of telehealth and other remote care for HSAs. In the case of plan years beginning in 2023 or 2024:
1. An eligible individual may have separate coverage for telehealth and other remote care in addition to an HDHP.
2. An HDHP may have no deductible (or a deductible below the minimum annual deductible) for telehealth and other remote care services.
Insulin products. The Inflation Reduction Act, enacted August 16, 2022, amended section 223 to provide that an HDHP may have a zero deductible for selected insulin products. The amendment applies to plan years beginning after 2022.
Q&As on certain qualified medical expenses. You can find answers to questions regarding whether certain costs related to nutrition, wellness, and general health are medical expenses that may be paid or reimbursed under an HSA at IRS.gov/Individuals/Frequently-asked-questions-aboutmedical-expenses-related-to-nutrition-wellness-and-generalhealth.
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8889--2023.pdf
Employee Benefits-District Court Considers Claim Of Discrimination In Providing Benefits (Posted 12/15/2023)
In Murphy v. Health Care Serv. Corp., No. 22-2656 (N.D. Ill. Oct. 17, 2023), the District Court says the following:
Plaintiff Kelsey Murphy ("Plaintiff") brings this class action complaint against her health insurance provider, Defendant Health Care Service Corporation d/b/a Blue Cross Blue Shield of Illinois ("Blue Cross"), challenging its policy governing access to fertility treatments. Plaintiff alleges the Blue Cross policy intentionally discriminates against her and other LGBTQ participants based on sexual orientation, by imposing additional out-of-pocket costs on them that heterosexual participants do not have to incur in order to qualify for fertility benefits. Blue Cross has moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, Defendant's Motion to Dismiss [15] is denied.
The case may be found here: https://scholar.google.com/scholar_case?case=14925257306822608883
In Murphy v. Health Care Serv. Corp., No. 22-2656 (N.D. Ill. Oct. 17, 2023), the District Court says the following:
Plaintiff Kelsey Murphy ("Plaintiff") brings this class action complaint against her health insurance provider, Defendant Health Care Service Corporation d/b/a Blue Cross Blue Shield of Illinois ("Blue Cross"), challenging its policy governing access to fertility treatments. Plaintiff alleges the Blue Cross policy intentionally discriminates against her and other LGBTQ participants based on sexual orientation, by imposing additional out-of-pocket costs on them that heterosexual participants do not have to incur in order to qualify for fertility benefits. Blue Cross has moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, Defendant's Motion to Dismiss [15] is denied.
The case may be found here: https://scholar.google.com/scholar_case?case=14925257306822608883
Plan Investments-Tenth Circuit Decides Question Of The Imposition Of Sanctions Based On Claim That Excessive Fees Were Charged (12/13/2023)
In Obselo v. Empower Capital Mgmt., Nos. 22-1291, 22-1292 (10th Cir. Oct. 31, 2023), the Tenth Circuit Court of Appeals says the following:
Two law firms that represented Plaintiffs in this litigation, Schlichter Bogard & Denton LLP (“SBD”) and Schneider Wallace Cottrell Konecky LLP (“SWCK”), appeal the district court’s order imposing sanctions against them under 28 U.S.C. § 1927. Plaintiffs’ counsel represented individual shareholders and an employee retirement plan in a lawsuit claiming that the investment company, investment adviser, and recordkeeper (collectively “Empower”) servicing their mutual funds charged excessive fees in violation of its fiduciary duties under § 36(b) of the Investment Company Act.
Following denial of Empower’s summary judgment and Daubert motions, the case proceeded to a bench trial where the district court ruled in favor of Empower. Thereafter, the courts anctioned Plaintiffs’ counsel for “recklessly pursu[ing] their claims through trial despite the fact that they were lacking in merit” and held SWCK and SBD jointly and severally liable for $1.5 million in Empower’s trial costs, expenses, and attorneys’ fees. App. at 863.
We conclude the district court abused its discretion and therefore reverse the district court’s order imposing sanctions. Accordingly, we do not reach the issues of SWCK and SBD’s joint and several liability or the court’s denial of SWCK’s motion to amend the judgment.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110943964.pdf
In Obselo v. Empower Capital Mgmt., Nos. 22-1291, 22-1292 (10th Cir. Oct. 31, 2023), the Tenth Circuit Court of Appeals says the following:
Two law firms that represented Plaintiffs in this litigation, Schlichter Bogard & Denton LLP (“SBD”) and Schneider Wallace Cottrell Konecky LLP (“SWCK”), appeal the district court’s order imposing sanctions against them under 28 U.S.C. § 1927. Plaintiffs’ counsel represented individual shareholders and an employee retirement plan in a lawsuit claiming that the investment company, investment adviser, and recordkeeper (collectively “Empower”) servicing their mutual funds charged excessive fees in violation of its fiduciary duties under § 36(b) of the Investment Company Act.
Following denial of Empower’s summary judgment and Daubert motions, the case proceeded to a bench trial where the district court ruled in favor of Empower. Thereafter, the courts anctioned Plaintiffs’ counsel for “recklessly pursu[ing] their claims through trial despite the fact that they were lacking in merit” and held SWCK and SBD jointly and severally liable for $1.5 million in Empower’s trial costs, expenses, and attorneys’ fees. App. at 863.
We conclude the district court abused its discretion and therefore reverse the district court’s order imposing sanctions. Accordingly, we do not reach the issues of SWCK and SBD’s joint and several liability or the court’s denial of SWCK’s motion to amend the judgment.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110943964.pdf
Employee Benefits-PBGC Issues Technical Amendments: Special Financial Assistance Withdrawal Liability Condition; SECURE 2.0 Act; and Other Updates (Posted 12/11/2023)
PBGC says, in summary, that it is making miscellaneous technical updates, clarifications, and corrections to PBGC’s regulations, including to clarify a special financial assistance withdrawal liability condition and to update the reference to the dollar limit for lump-sum distributions in the closeout of sufficient multiemployer plans to reflect changes implemented under the SECURE 2.0 Act of 2022.
See the Technical Amendments for details. They may be found at: https://public-inspection.federalregister.gov/2023-24268.pdf
PBGC says, in summary, that it is making miscellaneous technical updates, clarifications, and corrections to PBGC’s regulations, including to clarify a special financial assistance withdrawal liability condition and to update the reference to the dollar limit for lump-sum distributions in the closeout of sufficient multiemployer plans to reflect changes implemented under the SECURE 2.0 Act of 2022.
See the Technical Amendments for details. They may be found at: https://public-inspection.federalregister.gov/2023-24268.pdf
Employee Benefits-PBGC Issues General Instructions For Multiemployer Plans Applying For Special Financial Assistance (Posted 12/8/2023)
PBGC says that these general instructions are guidance setting forth the requirements for a multiemployer plan filing an application for special financial assistance (SFA) with PBGC. This guidance refers to section 4262 of the Employee Retirement Income Security Act of 1974 (ERISA) and PBGC’s SFA regulation (29 CFR part 4262).
See the General Instructions for details. They may be found at: https://www.pbgc.gov/sites/default/files/sfa/sfa-filing-instructions.pdf
PBGC says that these general instructions are guidance setting forth the requirements for a multiemployer plan filing an application for special financial assistance (SFA) with PBGC. This guidance refers to section 4262 of the Employee Retirement Income Security Act of 1974 (ERISA) and PBGC’s SFA regulation (29 CFR part 4262).
See the General Instructions for details. They may be found at: https://www.pbgc.gov/sites/default/files/sfa/sfa-filing-instructions.pdf
Employee Benefits-See 2023 Form 8880-Credit for Qualified Retirement Savings Contributions at: https://www.irs.gov/pub/irs-prior/f8880--2023.pdf (Posted 12/6/2023)
Health Care-CMS Issues Hospital Price Transparency Fact Sheet (Posted 12/4/2023)
The CMS says the following. Hospital price transparency lays the foundation for a patient-driven health care system by making hospital standard charges information available to the public. It supports President Biden’s historic Competition Council and July 2021 Executive Order on Promoting Competition. On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) finalized changes to the hospital price transparency regulations.
The policies in the final rule will further advance the agency’s commitment to increasing price transparency and enforcing compliance and would apply to each hospital operating in the United States. This fact sheet discusses the hospital price transparency final provisions of the calendar year 2024 Hospital Outpatient Prospective Payment System final rule (CMS-1786-FC), which can be downloaded from the Federal Register
at: https://www.federalregister.gov/public-inspection/2023-24293/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment
See the Fact Sheet for details. It may be found here: https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-fact-sheet
Also, see (1) CMS Note on Making Hospital Prices More Transparent And Expanding Access To Behavoiral Health Care at: https://www.cms.gov/newsroom/press-releases/cms-makes-hospital-prices-more-transparent-and-expands-access-behavioral-health-care, and (2) CMS Final Regulations on health care payment systems at: https://www.federalregister.gov/public-inspection/2023-24293/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment
The CMS says the following. Hospital price transparency lays the foundation for a patient-driven health care system by making hospital standard charges information available to the public. It supports President Biden’s historic Competition Council and July 2021 Executive Order on Promoting Competition. On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) finalized changes to the hospital price transparency regulations.
The policies in the final rule will further advance the agency’s commitment to increasing price transparency and enforcing compliance and would apply to each hospital operating in the United States. This fact sheet discusses the hospital price transparency final provisions of the calendar year 2024 Hospital Outpatient Prospective Payment System final rule (CMS-1786-FC), which can be downloaded from the Federal Register
at: https://www.federalregister.gov/public-inspection/2023-24293/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment
See the Fact Sheet for details. It may be found here: https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-fact-sheet
Also, see (1) CMS Note on Making Hospital Prices More Transparent And Expanding Access To Behavoiral Health Care at: https://www.cms.gov/newsroom/press-releases/cms-makes-hospital-prices-more-transparent-and-expands-access-behavioral-health-care, and (2) CMS Final Regulations on health care payment systems at: https://www.federalregister.gov/public-inspection/2023-24293/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment
Health Care-CMS Issues FAQs Re: Medicare Secondary Payer and Certain Civil Money Penalties (Posted 12/1/2023)
CMS has finalized its rule specifying how and when CMS will calculate and impose civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations. The text of the final rule can be found and reviewed in its entirety in the Federal Register, which can be found at https://www.federalregister.gov/documents/2023/10/11/2023- 22282/medicare-program-medicare-secondary-payer-and-certain-civil-money-penalties.
To help RREs prepare for potential CMPs, CMS is addressing some frequently asked questions. CMS will also be hosting webinars in January 2024 to begin to share additional information about CMPs.
See the FAQs for details They may be found here: https://www.cms.gov/files/document/medicare-secondary-payer-and-certain-civil-money-penalties-frequently-asked-questions.pdf
CMS has finalized its rule specifying how and when CMS will calculate and impose civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations. The text of the final rule can be found and reviewed in its entirety in the Federal Register, which can be found at https://www.federalregister.gov/documents/2023/10/11/2023- 22282/medicare-program-medicare-secondary-payer-and-certain-civil-money-penalties.
To help RREs prepare for potential CMPs, CMS is addressing some frequently asked questions. CMS will also be hosting webinars in January 2024 to begin to share additional information about CMPs.
See the FAQs for details They may be found here: https://www.cms.gov/files/document/medicare-secondary-payer-and-certain-civil-money-penalties-frequently-asked-questions.pdf
Employee Benefits-IRS Issues Notice Containing 2024 Limitations Adjusted as Provided in Section 415(d), etc.(Posted 11/29/2023)
The IRS has issued Notice 2023-75. The IRS says the following about the Notice:
Section 415 of the Internal Revenue Code (“Code”) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under section 415. Under section 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under section 215(i)(2)(A) of the Social Security Act.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-75.pdf
The IRS has issued Notice 2023-75. The IRS says the following about the Notice:
Section 415 of the Internal Revenue Code (“Code”) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under section 415. Under section 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under section 215(i)(2)(A) of the Social Security Act.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-75.pdf
ERISA-Ninth Circuit Considers Award Of Attorney’s Fees And Nontaxable Costs Under The Equal Access To Justice Act (Posted 11/27/2023)
In Su v. Bowers, No. 22-15378 (9th Cir. Oct. 25, 2023), the following occurred:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed the district court’s denial of attorneys’ fees and nontaxable costs under the Equal Access to Justice Act (“EAJA”), and remanded the district court’s award of taxable costs.
The U.S. Department of Labor brought the underlying lawsuit under the Employee Retirement Income Security Act, alleging that Appellants Brian Bowers and Dexter Kubota sold their company to an employee stock ownership plan (ESOP) at an allegedly inflated value. The government’s case hinged on a single valuation expert, who opined that the plan overpaid for that company. The district court rejected the opinion, and the government lost a bench trial. The district court denied Appellants’ request for attorneys’ fees and nontaxable costs under EAJA, finding that the government’s litigation position was “substantially justified” and that it did not act in bad faith, The Panel held that the district court did not abuse its discretion in concluding that the government’s position at trial was substantially justified, and in denying attorneys’ fees and nontaxable costs under EAJA.
The Panel noted that the government could not rely on red flags alone, such as the “suspicious” circumstances of the ESOP transaction, to defend its litigation position as “substantially justified.” The government, however, did not know heading to trial that the district court would reject the expert’s entire opinion as unreliable.
The Panel further held that it was constrained by the deferential standard of review, and it could not say that the district court abused its discretion in finding that the government’s position was substantially justified at the time of trial. Given the Panel’s holding that the government’s position was substantially justified, the district court did not clearly err in finding that the government did not litigate in bad faith. The Panel held that the district court abused its discretion in reducing the award of taxable costs because it relied on a clearly erroneous finding of fact in reducing the magistrate judge’s recommended award of taxable costs.
Judge Collins concurred with the majority’s decision to vacate the district court’s order reducing the award of taxable costs, and dissented from the majority’s decision to affirm the denial of EAJA attorneys’ fees. He would reverse the district court’s determination that the government’s position in this case was substantially justified, and would remand for the district court to consider the government’s remaining argument that none of the Appellants satisfied the “net worth” requirements of EAJA.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/10/25/22-15378.pdf
In Su v. Bowers, No. 22-15378 (9th Cir. Oct. 25, 2023), the following occurred:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed the district court’s denial of attorneys’ fees and nontaxable costs under the Equal Access to Justice Act (“EAJA”), and remanded the district court’s award of taxable costs.
The U.S. Department of Labor brought the underlying lawsuit under the Employee Retirement Income Security Act, alleging that Appellants Brian Bowers and Dexter Kubota sold their company to an employee stock ownership plan (ESOP) at an allegedly inflated value. The government’s case hinged on a single valuation expert, who opined that the plan overpaid for that company. The district court rejected the opinion, and the government lost a bench trial. The district court denied Appellants’ request for attorneys’ fees and nontaxable costs under EAJA, finding that the government’s litigation position was “substantially justified” and that it did not act in bad faith, The Panel held that the district court did not abuse its discretion in concluding that the government’s position at trial was substantially justified, and in denying attorneys’ fees and nontaxable costs under EAJA.
The Panel noted that the government could not rely on red flags alone, such as the “suspicious” circumstances of the ESOP transaction, to defend its litigation position as “substantially justified.” The government, however, did not know heading to trial that the district court would reject the expert’s entire opinion as unreliable.
The Panel further held that it was constrained by the deferential standard of review, and it could not say that the district court abused its discretion in finding that the government’s position was substantially justified at the time of trial. Given the Panel’s holding that the government’s position was substantially justified, the district court did not clearly err in finding that the government did not litigate in bad faith. The Panel held that the district court abused its discretion in reducing the award of taxable costs because it relied on a clearly erroneous finding of fact in reducing the magistrate judge’s recommended award of taxable costs.
Judge Collins concurred with the majority’s decision to vacate the district court’s order reducing the award of taxable costs, and dissented from the majority’s decision to affirm the denial of EAJA attorneys’ fees. He would reverse the district court’s determination that the government’s position in this case was substantially justified, and would remand for the district court to consider the government’s remaining argument that none of the Appellants satisfied the “net worth” requirements of EAJA.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/10/25/22-15378.pdf
ERISA-Eleventh Circuit Reviews Multi-District Antitrust Class Action Case (Posted 11/24/2023)
In In Re: Blue Cross Blue Shield Antitrust Litigation, No. 22-13051 (11th Cir. 10/25/2023), the Eleventh Circuit Court of Appeals says the following:
This appeal requires us to determine whether the district court abused its discretion in approving a settlement agreement for a multi-district antitrust class action against the Blue Cross Blue Shield Association and its member plans. One objector, Home Depot U.S.A., Inc., contends that the settlement violates public policy by releasing prospective antitrust claims and violates due process and class-action rules by allowing the same counsel and class representatives to represent both an injunctive class and a damages class. Another objector, Topographic, Inc., argues that the district court misapplied the law and clearly erred in its factual findings in allocating the settlement fund between different groups of claimants. A third objector, David Behenna, contends that the district court erred in determining that the class counsels’ fees were reasonable. And the final objectors, Jennifer Cochran and Aaron Craker, argue that the district court erred in allowing the settlement to treat the unclaimed settlement funds of employers differently than the unclaimed funds of employees and in approving a plan of distribution that fails to address the employers’ disbursement obligations under the Employee Retirement Income Security Act of 1974 (ERISA). Because the district court did not abuse its discretion, we affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca11/22-13051/22-13051-2023-10-25.pdf?ts=1698258999
In In Re: Blue Cross Blue Shield Antitrust Litigation, No. 22-13051 (11th Cir. 10/25/2023), the Eleventh Circuit Court of Appeals says the following:
This appeal requires us to determine whether the district court abused its discretion in approving a settlement agreement for a multi-district antitrust class action against the Blue Cross Blue Shield Association and its member plans. One objector, Home Depot U.S.A., Inc., contends that the settlement violates public policy by releasing prospective antitrust claims and violates due process and class-action rules by allowing the same counsel and class representatives to represent both an injunctive class and a damages class. Another objector, Topographic, Inc., argues that the district court misapplied the law and clearly erred in its factual findings in allocating the settlement fund between different groups of claimants. A third objector, David Behenna, contends that the district court erred in determining that the class counsels’ fees were reasonable. And the final objectors, Jennifer Cochran and Aaron Craker, argue that the district court erred in allowing the settlement to treat the unclaimed settlement funds of employers differently than the unclaimed funds of employees and in approving a plan of distribution that fails to address the employers’ disbursement obligations under the Employee Retirement Income Security Act of 1974 (ERISA). Because the district court did not abuse its discretion, we affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca11/22-13051/22-13051-2023-10-25.pdf?ts=1698258999
Employment-DOL Issues Fact Sheet #66E: The Davis-Bacon and Related Acts – Compliance with Fringe Benefit Requirements (Posted 11/22/2023)
The DOL says the following about the Fact Sheet:
This fact sheet provides general information regarding compliance with the fringe benefit requirements of the Davis-Bacon and Related Acts (DBRA).
The DBRA require payment of prevailing wages to laborers and mechanics working on federally funded or assisted construction projects. (See Fact Sheet #66). The DBRA “prevailing wage” is the combination of the basic hourly rate (BHR) and any fringe benefits for the applicable classification listed in a DBRA wage determination. Prevailing wages, including fringe benefits, must be paid on all hours worked on the site of the work. See 40 U.S.C. § 3141(2); see also 29 CFR § 5.23.
See the Fact Sheet for details. It may be found here: https://www.dol.gov/agencies/whd/fact-sheets/66E-DBRA-compliance-fringe-benefit-requirements
The DOL says the following about the Fact Sheet:
This fact sheet provides general information regarding compliance with the fringe benefit requirements of the Davis-Bacon and Related Acts (DBRA).
The DBRA require payment of prevailing wages to laborers and mechanics working on federally funded or assisted construction projects. (See Fact Sheet #66). The DBRA “prevailing wage” is the combination of the basic hourly rate (BHR) and any fringe benefits for the applicable classification listed in a DBRA wage determination. Prevailing wages, including fringe benefits, must be paid on all hours worked on the site of the work. See 40 U.S.C. § 3141(2); see also 29 CFR § 5.23.
See the Fact Sheet for details. It may be found here: https://www.dol.gov/agencies/whd/fact-sheets/66E-DBRA-compliance-fringe-benefit-requirements
Employee Benefits-IRS Issues Notice 2023-73, Containing Mortality Table for Use in Determining Minimum Present Value for 2024 (Posted 11/20/2023)
According to the IRS, this Notice has the following purpose:
This notice specifies a mortality table for use in determining minimum present value under § 417(e)(3) of the Code and section 205(g)(3) of ERISA for distributions with annuity starting dates that occur during stability periods beginning in the 2024 calendar year.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-73.pdf
According to the IRS, this Notice has the following purpose:
This notice specifies a mortality table for use in determining minimum present value under § 417(e)(3) of the Code and section 205(g)(3) of ERISA for distributions with annuity starting dates that occur during stability periods beginning in the 2024 calendar year.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-73.pdf
Employee Benefits-IRS Issues Final Regulations For Mortality Tables for Determining Present Value under Defined Benefit Pension Plans (Posted 11/17/2023)
The IRS says the following about the Final Regulations:
This document sets forth final regulations prescribing mortality tables to be used for most defined benefit pension plans. The tables specify the probability of survival year-by-year for an individual based on age, gender, and other factors. The tables are used (together with other actuarial assumptions) to calculate the present value of a stream of expected future benefit payments for purposes of determining the minimum funding requirements for the plan. These mortality tables are also relevant for determining the minimum required amount of a lump-sum distribution from such a plan. These regulations affect participants in, beneficiaries of, employers maintaining, and administrators of certain defined benefit pension plans. These regulations apply to valuation dates occurring on or after January 1, 2024.
See the Final Regulations for details. They may be found here: https://public-inspection.federalregister.gov/2023-23267.pdf
The IRS says the following about the Final Regulations:
This document sets forth final regulations prescribing mortality tables to be used for most defined benefit pension plans. The tables specify the probability of survival year-by-year for an individual based on age, gender, and other factors. The tables are used (together with other actuarial assumptions) to calculate the present value of a stream of expected future benefit payments for purposes of determining the minimum funding requirements for the plan. These mortality tables are also relevant for determining the minimum required amount of a lump-sum distribution from such a plan. These regulations affect participants in, beneficiaries of, employers maintaining, and administrators of certain defined benefit pension plans. These regulations apply to valuation dates occurring on or after January 1, 2024.
See the Final Regulations for details. They may be found here: https://public-inspection.federalregister.gov/2023-23267.pdf
Employee Benefits-IRS Issues Text Of 1023 Instructions For Form 1095-A, Health Insurance Marketplace Statement (Posted 11/15/2023)
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i1095a--2023.pdf
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i1095a--2023.pdf
Employee Benefit-IRS Issues Text Of 1023 Instructions For Forms 1094-B and 1095-B (Posted 11/13/2023)
According to the IRS, here is What’s New:
The electronic filing threshold for information returns required to be filed on or after January 1, 2024, has been decreased to 10 or more returns. See Electronic Filing, later.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i109495b--2023.pdf
According to the IRS, here is What’s New:
The electronic filing threshold for information returns required to be filed on or after January 1, 2024, has been decreased to 10 or more returns. See Electronic Filing, later.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i109495b--2023.pdf
Employee Benefits-IRS Issues Text Of 1023 Instructions For Forms 1094-C and 1095-C (Posted 11/10/2023)
According to the IRS, here is What’s New:
The electronic-filing threshold for information returns required to be filed on or after January 1, 2024, has been decreased to 10 or more returns. See Electronic Filing, later.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i109495c--2023.pdf
According to the IRS, here is What’s New:
The electronic-filing threshold for information returns required to be filed on or after January 1, 2024, has been decreased to 10 or more returns. See Electronic Filing, later.
See the Instructions for details. They may be found here: https://www.irs.gov/pub/irs-prior/i109495c--2023.pdf
Employee Benefits-IRS Issues Notice Of Insured and Self-Insured Health Plans Adjusted Applicable Dollar Amount for Fee Imposed by Code Sections 4375 and 4376 (Posted 11/8/2023)
The IRS has issues Notice 2023-70. According to the IRS, this Notice has the following purpose:
This notice provides the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of calculating the fee imposed by sections 4375 and 4376 of the Internal Revenue Code for policy years and plan years that end on or after October 1, 2023, and before October 1, 2024.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-70.pdf
The IRS has issues Notice 2023-70. According to the IRS, this Notice has the following purpose:
This notice provides the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of calculating the fee imposed by sections 4375 and 4376 of the Internal Revenue Code for policy years and plan years that end on or after October 1, 2023, and before October 1, 2024.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-70.pdf
Employee Benefits-PBGC Issues A Notice Of Maximum Monthly Guarantee Tables (Posted 11/6/2023)
In the Notice, the PBGC says the following:
Maximum Monthly Guarantee Tables
The maximum guarantees in these tables apply only to single-employer pension plans whose benefits PBGC pays as trustee. These guarantees do not apply to multiemployer plans. Information on multiemployer guarantees is included on our Multiemployer FAQ page.
When PBGC becomes trustee of a pension plan, we can guarantee benefits only up to limits set by federal law. One of those legal limits is the maximum guarantee. The maximum amounts that PBGC can guarantee are listed by age in the following Maximum Monthly Guarantee Tables.
Please note: Most benefits in PBGC-trusteed plans are lower than the maximum and not affected by legal limits.
See the PBGC Notice for details. It may be found here: https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee
In the Notice, the PBGC says the following:
Maximum Monthly Guarantee Tables
The maximum guarantees in these tables apply only to single-employer pension plans whose benefits PBGC pays as trustee. These guarantees do not apply to multiemployer plans. Information on multiemployer guarantees is included on our Multiemployer FAQ page.
When PBGC becomes trustee of a pension plan, we can guarantee benefits only up to limits set by federal law. One of those legal limits is the maximum guarantee. The maximum amounts that PBGC can guarantee are listed by age in the following Maximum Monthly Guarantee Tables.
Please note: Most benefits in PBGC-trusteed plans are lower than the maximum and not affected by legal limits.
See the PBGC Notice for details. It may be found here: https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee
ERISA-Ninth Circuit Considers Claim For Health Insurance Benefits (Posted 11/3/2023)
In Airlines for America v. City and County of San Francisco, No. 22-15677 (9th Cir. 8/29/2023), the following occurred:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s grant of summary judgment in favor of the City and County of San Francisco in an action challenging the City’s Healthy Airport Ordinance, which requires airlines that contract with the City to use San Francisco International Airport to provide employees with certain health insurance benefits.
Federal law generally preempts state or local government action that has the force and effect of law. But when a state or local government buys services or manages property as would a private party, it acts as a market participant, not as a regulator, and courts presume that its actions are not subject to preemption.
Airlines for America, a representative of the airlines, alleged that the City, in enacting the ordinance and amending SFO’s contract with the airlines, acted as a government regulator and not as a market participant, and the ordinance therefore was preempted by multiple federal statutes. The district court held that the City was a market participant and granted its motion for summary judgment. The Healthy Airport Ordinance contains a civil penalty provision authorizing the Airport Director to impose daily fines, with discretion to increase the amount of the fines. The ordinance also contains a civil penalty provision authorizing the City to collect liquidated damages. The City can seek to enforce these provisions in a municipal administrative proceeding. Reversing and remanding, the Panel held that the two civil penalty provisions carried the force of law and thus rendered the City a regulator rather than a market participant.
Dissenting, Judge Schroeder wrote that, in amending SFO’s contract with the airlines, the City acted as a market participant and at most included a contractual penalty clause that might be unenforceable.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/08/29/22-15677.pdf
ERISA-Third Circuit Considers Case Claiming Breach Of ERISA Fiduciary Duty (Posted 11/1/2023)
In Henry v. Wilmington Trust N/A, No. 21-2801 (3d Cir. 6/30/2023); cert. pet. denied 10/16/2023, the Third Circuit Court of Appeals says the following:
Marlow Henry participated in an employee stock ownership plan (“ESOP”) sponsored by his employer. After the ESOP purchased stock at what Henry believed was an inflated price, Henry filed a lawsuit against Wilmington Trust, N.A. (“Wilmington Trust”), the plan’s trustee, and Brian Sass and E. Stockton Croft, executives of his employer (collectively, the “defendants”). He alleged that the defendants breached their fiduciary duties to the ESOP imposed by the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., and engaged in transactions prohibited by ERISA. The defendants moved to dismiss. They contended that an arbitration provision, added to the ESOP’s plan documents after Henry joined the ESOP, barred Henry from pursuing his claims in federal court. The District Court denied the motion to dismiss. For the following reasons, we will affirm the judgment of the District Court.
The case may be found here: https://www2.ca3.uscourts.gov/opinarch/212801p.pdf
In Henry v. Wilmington Trust N/A, No. 21-2801 (3d Cir. 6/30/2023); cert. pet. denied 10/16/2023, the Third Circuit Court of Appeals says the following:
Marlow Henry participated in an employee stock ownership plan (“ESOP”) sponsored by his employer. After the ESOP purchased stock at what Henry believed was an inflated price, Henry filed a lawsuit against Wilmington Trust, N.A. (“Wilmington Trust”), the plan’s trustee, and Brian Sass and E. Stockton Croft, executives of his employer (collectively, the “defendants”). He alleged that the defendants breached their fiduciary duties to the ESOP imposed by the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., and engaged in transactions prohibited by ERISA. The defendants moved to dismiss. They contended that an arbitration provision, added to the ESOP’s plan documents after Henry joined the ESOP, barred Henry from pursuing his claims in federal court. The District Court denied the motion to dismiss. For the following reasons, we will affirm the judgment of the District Court.
The case may be found here: https://www2.ca3.uscourts.gov/opinarch/212801p.pdf
Employee Benefits-PBGC Posts Premium Rates, Updated 10/13/2023 for 2024 (Posted 10/30/2023)
The updated premium rates may be found here: https://www.pbgc.gov/prac/prem/premium-rates
The updated premium rates may be found here: https://www.pbgc.gov/prac/prem/premium-rates
ERISA-Fifth Circuit Reviews Disability Benefits Under The NFL’s Retirement Plan (Posted 10/27/2023)
In Cloud v. NFL Retirement Plan, No. 22-10710 (5th Cir. 10/6/23), the Fifth Circuit Court of Appeals says the following:
Football, by design, is a collision-based sport played with ferocity and velocity. It is thus surprising that, of the four major professional sports leagues in North America (football, baseball, basketball, and hockey), the frequency of injuries is lowest for football players—though not the severity. Other sports (with longer seasons) have the most injuries, just not the worst injuries. This ERISA case concerns the National Football League’s retirement plan, which provides disability pay to hobbled NFL veterans whose playing days are over but who are still living with debilitating, often degenerative injuries to brains and bodies, including neurotrauma.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca5/22-10710/22-10710-2023-10-06.pdf?ts=1696635065
In Cloud v. NFL Retirement Plan, No. 22-10710 (5th Cir. 10/6/23), the Fifth Circuit Court of Appeals says the following:
Football, by design, is a collision-based sport played with ferocity and velocity. It is thus surprising that, of the four major professional sports leagues in North America (football, baseball, basketball, and hockey), the frequency of injuries is lowest for football players—though not the severity. Other sports (with longer seasons) have the most injuries, just not the worst injuries. This ERISA case concerns the National Football League’s retirement plan, which provides disability pay to hobbled NFL veterans whose playing days are over but who are still living with debilitating, often degenerative injuries to brains and bodies, including neurotrauma.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca5/22-10710/22-10710-2023-10-06.pdf?ts=1696635065
Health Care-CMS Issues Final Rule On Medicare Program: Medicare Secondary Payer And Certain Civil Money Penalties (Posted 10/25/2023)
Here is what CMS says about the Final Rule:
This final rule will specify how and when CMS must calculate and impose civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations by failing to register and report as required by MSP reporting requirements. This final rule will also establish CMP amounts and circumstances under which CMPs will and will not be imposed.
See the Final Rule for details. It may be found here: https://www.federalregister.gov/documents/2023/10/11/2023-22282/medicare-program-medicare-secondary-payer-and-certain-civil-money-penalties
Here is what CMS says about the Final Rule:
This final rule will specify how and when CMS must calculate and impose civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations by failing to register and report as required by MSP reporting requirements. This final rule will also establish CMP amounts and circumstances under which CMPs will and will not be imposed.
See the Final Rule for details. It may be found here: https://www.federalregister.gov/documents/2023/10/11/2023-22282/medicare-program-medicare-secondary-payer-and-certain-civil-money-penalties
Health Care-CMS Issues FAQS About Consolidated Appropriations Act, 2021, Implementation Part 62 (Posted 10/23/2023)
The CMS says the following as to the FAQS:
October 6, 2023
Set out below are Frequently Asked Questions (FAQs) regarding implementation of certain provisions of Title I (the No Surprises Act)1 of Division BB of the Consolidated Appropriations Act, 2021, in light of the August 24, 2023 decision in Texas Medical Association et al. v. United States Department of Health and Human Services et al., Case No. 6:22-cv-450-JDK (E.D. Tex.) (TMA III). These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments), along with the Office of Personnel Management (OPM). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
See the FAQs for details. They may be found here: https://www.cms.gov/files/document/faqs-part-62.pdf
The CMS says the following as to the FAQS:
October 6, 2023
Set out below are Frequently Asked Questions (FAQs) regarding implementation of certain provisions of Title I (the No Surprises Act)1 of Division BB of the Consolidated Appropriations Act, 2021, in light of the August 24, 2023 decision in Texas Medical Association et al. v. United States Department of Health and Human Services et al., Case No. 6:22-cv-450-JDK (E.D. Tex.) (TMA III). These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments), along with the Office of Personnel Management (OPM). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
See the FAQs for details. They may be found here: https://www.cms.gov/files/document/faqs-part-62.pdf
Health Care- CMS Issues A Memo, dated October 6, 2023: No Surprises Act (NSA) Independent Dispute Resolution (IDR) Partial Reopening of Dispute Initiation Frequently Asked Questions (FAQs) (Posted 10/20/2023)
See the Memo for details. It may be found here: https://www.cms.gov/files/document/federal-idr-partial-reopening-faqs-oct-23.pdf
See the Memo for details. It may be found here: https://www.cms.gov/files/document/federal-idr-partial-reopening-faqs-oct-23.pdf
ERISA-DOL Issues Opinion On Application Of ERISA Fiduciary Rules To Citigroup’s Action for Racial Equity Asset Manager Program (Racial Equity Program) (Posted 10/18/2023)
See the Opinion, DOL Opinion 2023-1A, for details. It may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/advisory-opinions/2023-01a
See the Opinion, DOL Opinion 2023-1A, for details. It may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/advisory-opinions/2023-01a
ERISA-First Circuit Decides Claim For Disability Benefits (Posted 10/16/2023)
In Field v. Sheet Metal Worker’s Nat’l Pension Fund, No. 22-1824 (1st Cir. 10/3/2023), the First Circuit Court of Appeals says the following:
David A. Field appeals from the decision of the Massachusetts U.S. District Court denying his motion for summary judgment and granting the renewed motion for summary judgment of the appellee, Sheet Metal Workers’ National Pension Fund (“the Fund”). Field v. Sheet Metal Workers’ Nat’l Pension Fund, No. 1:20-CV-11939-IT, 2022 WL 4626883 (D. Mass. Sept. 30, 2022). Field brought suit for plan benefits pursuant to ERISA Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), arguing that the Fund wrongfully terminated his previously granted Disability Benefit. The District Court held that the Appeals Committee of the Board of Trustees of the Fund (“Appeals Committee”) did not abuse its discretion and was not arbitrary or capricious in terminating his Disability Benefit payments based on the Committee’s findings that Field had engaged in Disqualifying Employment in 2016 and also that he had not completed sufficient hours of Covered Employment to become eligible for this benefit in the first place. We need reach only the first of the Committee’s findings because it is dispositive.
Field argues that the Appeals Committee acted arbitrarily and capriciously and abused its discretion in determining that he had engaged in Disqualifying Employment in 2016 on the grounds that, in his view, the Committee failed to meaningfully engage with the evidence he submitted.
We affirm the district court's entry of summary judgment for the Fund.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca1/22-1824/22-1824-2023-10-03.pdf?ts=1696363241
In Field v. Sheet Metal Worker’s Nat’l Pension Fund, No. 22-1824 (1st Cir. 10/3/2023), the First Circuit Court of Appeals says the following:
David A. Field appeals from the decision of the Massachusetts U.S. District Court denying his motion for summary judgment and granting the renewed motion for summary judgment of the appellee, Sheet Metal Workers’ National Pension Fund (“the Fund”). Field v. Sheet Metal Workers’ Nat’l Pension Fund, No. 1:20-CV-11939-IT, 2022 WL 4626883 (D. Mass. Sept. 30, 2022). Field brought suit for plan benefits pursuant to ERISA Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), arguing that the Fund wrongfully terminated his previously granted Disability Benefit. The District Court held that the Appeals Committee of the Board of Trustees of the Fund (“Appeals Committee”) did not abuse its discretion and was not arbitrary or capricious in terminating his Disability Benefit payments based on the Committee’s findings that Field had engaged in Disqualifying Employment in 2016 and also that he had not completed sufficient hours of Covered Employment to become eligible for this benefit in the first place. We need reach only the first of the Committee’s findings because it is dispositive.
Field argues that the Appeals Committee acted arbitrarily and capriciously and abused its discretion in determining that he had engaged in Disqualifying Employment in 2016 on the grounds that, in his view, the Committee failed to meaningfully engage with the evidence he submitted.
We affirm the district court's entry of summary judgment for the Fund.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca1/22-1824/22-1824-2023-10-03.pdf?ts=1696363241
Health Care-DOL Issues Opinion Indicating That Parity Means Better Coverage for Mental Health and Substance Use Disorder (Posted 10/12/2023)
The Opinion, by Lisa Gomez,, says the following:
When the Mental Health Parity and Addiction Equity Act was enacted, the law was considered a landmark achievement by lawmakers and advocates who had been fighting for decades for clearer pathways to mental health and substance use disorder care. Yet, 15 years since its passage, there is still plenty of work to be done to make their vision a reality.
The law doesn’t require job-based health plans to offer any specific mental health benefits. It simply requires that they not make it more difficult for someone to use their plan to access care for a mental health condition or substance use disorder than to access medical or surgical care. The law is grounded in a simple principle – it should be just as easy for someone to get treated for a substance use disorder, anxiety, depression, PTSD or any other behavioral condition as it is for them to get treated for a broken wrist, diabetes, asthma or any other common ailment.
Despite the law’s clear promise of parity between mental health and medical or surgical benefits, that promise has not been kept. People living with treatable mental health conditions commonly face red tape when seeking care, such as unexpected charges, strict preauthorization requirements and provider networks with far too few options available. This is wrong, it’s illegal and it must stop.
If you or your loved ones have ever lived with a mental health condition or wrestled with a substance use disorder, you know how hard it can be to get through the day sometimes, even without added obstacles to needed treatment. I’ve been there myself, and I’ve seen firsthand how difficult it can be for a person in this situation, as well as for their families and friends. I’ve experienced the pain of losing friends and family members to suicide and overdose. And I know that people with mental health conditions and substance use disorders can manage their conditions and lead meaningful, fulfilling lives if they can access the care they need.
That’s why this year the Employee Benefits Security Administration is committed to doing its part to make this system function properly. We're proposing new regulations, committing unprecedented resources to bringing plans into compliance with the law, and reaching out to communities across the United States to ensure that more of America’s workers and families understand their rights and are better able to exercise them, including by contacting us for help when they need it.
We are determined to make sure these workers and beneficiaries get their due. For example, our enforcement program has required plans to address discriminatory practices by:
If you think you or your loved ones are facing especially high hurdles just to get needed mental health or substance use disorder benefits, call an EBSA benefits advisor for free at 866-444-3272 or ask for help online at askebsa.dol.gov. We know that too many people in the U.S. deal with these issues every day and may not know where to turn for help. As we continue to work on the larger problems within this system, we are here to help you now. Together, we can move toward a healthier future for all Americans.
Lisa M. Gomez is the assistant secretary for employee benefits security at the U.S. Department of Labor.
The Opinion may be found here: https://blog.dol.gov/2023/10/04/parity-means-better-coverage-for-mental-health-and-substance-use-disorder
The Opinion, by Lisa Gomez,, says the following:
When the Mental Health Parity and Addiction Equity Act was enacted, the law was considered a landmark achievement by lawmakers and advocates who had been fighting for decades for clearer pathways to mental health and substance use disorder care. Yet, 15 years since its passage, there is still plenty of work to be done to make their vision a reality.
The law doesn’t require job-based health plans to offer any specific mental health benefits. It simply requires that they not make it more difficult for someone to use their plan to access care for a mental health condition or substance use disorder than to access medical or surgical care. The law is grounded in a simple principle – it should be just as easy for someone to get treated for a substance use disorder, anxiety, depression, PTSD or any other behavioral condition as it is for them to get treated for a broken wrist, diabetes, asthma or any other common ailment.
Despite the law’s clear promise of parity between mental health and medical or surgical benefits, that promise has not been kept. People living with treatable mental health conditions commonly face red tape when seeking care, such as unexpected charges, strict preauthorization requirements and provider networks with far too few options available. This is wrong, it’s illegal and it must stop.
If you or your loved ones have ever lived with a mental health condition or wrestled with a substance use disorder, you know how hard it can be to get through the day sometimes, even without added obstacles to needed treatment. I’ve been there myself, and I’ve seen firsthand how difficult it can be for a person in this situation, as well as for their families and friends. I’ve experienced the pain of losing friends and family members to suicide and overdose. And I know that people with mental health conditions and substance use disorders can manage their conditions and lead meaningful, fulfilling lives if they can access the care they need.
That’s why this year the Employee Benefits Security Administration is committed to doing its part to make this system function properly. We're proposing new regulations, committing unprecedented resources to bringing plans into compliance with the law, and reaching out to communities across the United States to ensure that more of America’s workers and families understand their rights and are better able to exercise them, including by contacting us for help when they need it.
We are determined to make sure these workers and beneficiaries get their due. For example, our enforcement program has required plans to address discriminatory practices by:
- eliminating blanket pre-authorization requirements for mental health benefits;
- ensuring comparable coverage of nutrition counseling for people with eating disorders, applied behavioral analysis therapy to treat autism, and medication-assisted treatment for opioid use disorders; and
- eliminating special gatekeepers for mental health and substance use disorder treatment.
If you think you or your loved ones are facing especially high hurdles just to get needed mental health or substance use disorder benefits, call an EBSA benefits advisor for free at 866-444-3272 or ask for help online at askebsa.dol.gov. We know that too many people in the U.S. deal with these issues every day and may not know where to turn for help. As we continue to work on the larger problems within this system, we are here to help you now. Together, we can move toward a healthier future for all Americans.
Lisa M. Gomez is the assistant secretary for employee benefits security at the U.S. Department of Labor.
The Opinion may be found here: https://blog.dol.gov/2023/10/04/parity-means-better-coverage-for-mental-health-and-substance-use-disorder
Employee Benefits-IRS Issues Employee Plan News, Dated September 29,2023 (Posted 10/9/2023)
The Employee Plan News advises you to check the status of your VCP submission and contains revised VCP Model Compliance Statement and Schedules.
he Employee Plan News may be found here: https://benefitslink.com/src/irs/irs-employee-plans-news-09292023.html
The Employee Plan News advises you to check the status of your VCP submission and contains revised VCP Model Compliance Statement and Schedules.
he Employee Plan News may be found here: https://benefitslink.com/src/irs/irs-employee-plans-news-09292023.html
Employee Benefits/IRS Projects-IRS Issues Its 2023–2024 Priority Guidance Plan (Posted 10/4/2023)
Here is what the IRS says about the Plan:
In Notice 2023-36, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (Service) solicited recommendations for items to be included in the plan from all interested parties, including taxpayers, tax practitioners, and industry groups. The Treasury Department and the Service recognize the importance of public input in formulating a Priority Guidance Plan that focuses resources on guidance items that are most important to taxpayers and tax administration. Solicitation of input on, and issuance of, this plan reflects an emphasis on taxpayer engagement with the Treasury Department and the Service through a variety of channels, consistent with the directive of the Taxpayer First Act, Pub. L. 116-25, 133 Stat. 981.
The 2023-2024 Priority Guidance Plan contains 237 guidance projects that are priorities for allocating Treasury Department and Service resources during the 12-month period from July 1, 2023 through June 30, 2024 (the plan year). Of these projects, 9 have been released or published as of August 31, 2023. The projects on the plan will be the focus of our efforts during the plan year. However, the plan does not provide any deadline for completing the projects. Some projects that were on the 2022-2023 Priority Guidance Plan are not included on the 2023-2024 plan because they are no longer considered priorities for purposes of allocating resources during the 2023-2024 plan year. Some of those projects may be considered for inclusion on a future priority guidance plan. In addition to the items on the 2023-2024 plan, the Appendix lists the more routine guidance that is generally published each year.
We intend to update the 2023-2024 plan during the plan year to reflect additional items that become priorities, guidance that is published during the plan year, and projects that may result from legislative developments. The periodic updates allow us flexibility throughout the plan year to consider comments received from taxpayers and tax practitioners relating to additional projects and to respond to developments arising during the plan year.
The published guidance process can be fully successful only if we have the benefit of the insight and experience of taxpayers and practitioners who must apply the rules. Therefore, we invite the public to continue to provide us with their comments and suggestions throughout the plan year.
Additional copies of the 2023-2024 Priority Guidance Plan can be obtained from the IRS website at http://www.irs.gov/uac/Priority-Guidance-Plan.
See the Plan for details. It may be found here: https://www.irs.gov/pub/irs-utl/2023-2024-priority-guidance-plan-initial-version.pdf
Here is what the IRS says about the Plan:
In Notice 2023-36, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (Service) solicited recommendations for items to be included in the plan from all interested parties, including taxpayers, tax practitioners, and industry groups. The Treasury Department and the Service recognize the importance of public input in formulating a Priority Guidance Plan that focuses resources on guidance items that are most important to taxpayers and tax administration. Solicitation of input on, and issuance of, this plan reflects an emphasis on taxpayer engagement with the Treasury Department and the Service through a variety of channels, consistent with the directive of the Taxpayer First Act, Pub. L. 116-25, 133 Stat. 981.
The 2023-2024 Priority Guidance Plan contains 237 guidance projects that are priorities for allocating Treasury Department and Service resources during the 12-month period from July 1, 2023 through June 30, 2024 (the plan year). Of these projects, 9 have been released or published as of August 31, 2023. The projects on the plan will be the focus of our efforts during the plan year. However, the plan does not provide any deadline for completing the projects. Some projects that were on the 2022-2023 Priority Guidance Plan are not included on the 2023-2024 plan because they are no longer considered priorities for purposes of allocating resources during the 2023-2024 plan year. Some of those projects may be considered for inclusion on a future priority guidance plan. In addition to the items on the 2023-2024 plan, the Appendix lists the more routine guidance that is generally published each year.
We intend to update the 2023-2024 plan during the plan year to reflect additional items that become priorities, guidance that is published during the plan year, and projects that may result from legislative developments. The periodic updates allow us flexibility throughout the plan year to consider comments received from taxpayers and tax practitioners relating to additional projects and to respond to developments arising during the plan year.
The published guidance process can be fully successful only if we have the benefit of the insight and experience of taxpayers and practitioners who must apply the rules. Therefore, we invite the public to continue to provide us with their comments and suggestions throughout the plan year.
Additional copies of the 2023-2024 Priority Guidance Plan can be obtained from the IRS website at http://www.irs.gov/uac/Priority-Guidance-Plan.
See the Plan for details. It may be found here: https://www.irs.gov/pub/irs-utl/2023-2024-priority-guidance-plan-initial-version.pdf
Taxation-IRS Issues 2023-2024 Special Per Diem Rates (Posted 10/2/2023)
The IRS has issues Notice 2023-68. According to the IRS, the Notice has the following purpose:
This annual notice provides the 2023-2024 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically (1) the special transportation industry meal and incidental expenses (M&IE) rates, (2) the rate for the incidental expenses only deduction, and (3) the rates and list of high-cost localities for purposes of the high-low substantiation method.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-68.pdf
The IRS has issues Notice 2023-68. According to the IRS, the Notice has the following purpose:
This annual notice provides the 2023-2024 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically (1) the special transportation industry meal and incidental expenses (M&IE) rates, (2) the rate for the incidental expenses only deduction, and (3) the rates and list of high-cost localities for purposes of the high-low substantiation method.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-68.pdf
ERISA-District Court Rules On Claim For Payment Of Stay At A Residential Treatment Center (Posted 9/28/2023)
In L.D. v. United Healthcare Insurance, No. 21-00121 (D. Utah Jul. 28, 2023), the District Court says the following:
Defendants covered minor K.D.'s stay in a residential treatment center (RTC) for a little over two months. After Defendants determined residential treatment was no longer medically necessary, they stopped covering the treatment, and K.D.'s mother sued Defendants individually and on K.D.'s behalf. The parties filed competing Motions for Summary Judgment, and the court heard argument on the Motions. For the reasons explained below, both Motions are GRANTED in part and DENIED in part.
The case may be found here: https://casetext.com/case/ld-v-unitedhealthcare-ins
In L.D. v. United Healthcare Insurance, No. 21-00121 (D. Utah Jul. 28, 2023), the District Court says the following:
Defendants covered minor K.D.'s stay in a residential treatment center (RTC) for a little over two months. After Defendants determined residential treatment was no longer medically necessary, they stopped covering the treatment, and K.D.'s mother sued Defendants individually and on K.D.'s behalf. The parties filed competing Motions for Summary Judgment, and the court heard argument on the Motions. For the reasons explained below, both Motions are GRANTED in part and DENIED in part.
The case may be found here: https://casetext.com/case/ld-v-unitedhealthcare-ins
ERISA-Ninth Circuit Review Class Action ERISA Case (Posted 9/26/2023)
In Bugielski v. AT&T Serv., Inc., No. 21-56196 (9th Cir. Aug. 4, 2023; pet. for rehearing filed Sep. 1, 2023), the following obtained:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed in part and reversed in part the district court’s summary judgment in favor of the defendants in an ERISA class action brought by former AT&T employees who contributed to AT&T’s retirement plan, a defined contribution plan.
Plaintiffs brought this class action against the Plan’s administrator, AT&T Services, Inc., and the committee responsible for some of the Plan’s investment-related duties, the AT&T Benefit Plan Investment Committee (collectively, “AT&T”). Plaintiffs alleged that AT&T failed to investigate and evaluate all the compensation that the Plan’s recordkeeper, Fidelity Workplace Services, received from mutual funds through BrokerageLink, Fidelity’s brokerage account platform, and from Financial Engines Advisors, L.L.C. Plaintiffs alleged that (1) AT&T’s failure to consider this compensation rendered its contract with Fidelity a “prohibited transaction” under ERISA § 406, (2) AT&T breached its fiduciary duty of prudence by failing to consider this compensation, and (3) AT&T breached its duty of candor by failing to disclose this compensation to the Department of Labor.
The Panel reversed the district court’s grant of summary judgment on the prohibited-transaction claim. Relying on the statutory text, regulatory text, and the Department of Labor’s Employee Benefits Security Administration’s explanation for a regulatory amendment, the Panel held that the broad scope of § 406 encompasses arm’s-length transactions. Disagreeing with other circuits, the Panel concluded that AT&T, by amending its contract with Fidelity to incorporate the services of BrokerageLink and Financial Engines, caused the Plan to engage in a prohibited transaction. The Panel remanded for the district court to consider whether AT&T met the requirements for an exemption from the prohibited-transaction bar because the contract was “reasonable,” the services were “necessary,” and no more than “reasonable compensation” was paid for the services. Specifically, the Panel remanded for the district court to consider whether Fidelity received no more than “reasonable compensation” from all sources, both direct and indirect, for the services it provided the Plan.
For similar reasons, the Panel also reversed the district court’s summary judgment on the duty-of-prudence claim. The Panel concluded that, as a fiduciary, AT&T was required to monitor the compensation that Fidelity received through BrokerageLink and Financial Engines. The Panel remanded for the district court to consider the duty-of prudence claim under the proper framework in the first instance.
On the reporting claim, the Panel affirmed as to the compensation from BrokerageLink and reversed as to the compensation from Financial Engines. The Panel concluded that AT&T adequately reported the compensation from Financial Engines on its Form 5500s with the Department of Labor, but it did not adequately report the compensation from Financial Engines because an alternative reporting method for “eligible indirect compensation” was not available.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/08/04/21-56196.pdf
In Bugielski v. AT&T Serv., Inc., No. 21-56196 (9th Cir. Aug. 4, 2023; pet. for rehearing filed Sep. 1, 2023), the following obtained:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed in part and reversed in part the district court’s summary judgment in favor of the defendants in an ERISA class action brought by former AT&T employees who contributed to AT&T’s retirement plan, a defined contribution plan.
Plaintiffs brought this class action against the Plan’s administrator, AT&T Services, Inc., and the committee responsible for some of the Plan’s investment-related duties, the AT&T Benefit Plan Investment Committee (collectively, “AT&T”). Plaintiffs alleged that AT&T failed to investigate and evaluate all the compensation that the Plan’s recordkeeper, Fidelity Workplace Services, received from mutual funds through BrokerageLink, Fidelity’s brokerage account platform, and from Financial Engines Advisors, L.L.C. Plaintiffs alleged that (1) AT&T’s failure to consider this compensation rendered its contract with Fidelity a “prohibited transaction” under ERISA § 406, (2) AT&T breached its fiduciary duty of prudence by failing to consider this compensation, and (3) AT&T breached its duty of candor by failing to disclose this compensation to the Department of Labor.
The Panel reversed the district court’s grant of summary judgment on the prohibited-transaction claim. Relying on the statutory text, regulatory text, and the Department of Labor’s Employee Benefits Security Administration’s explanation for a regulatory amendment, the Panel held that the broad scope of § 406 encompasses arm’s-length transactions. Disagreeing with other circuits, the Panel concluded that AT&T, by amending its contract with Fidelity to incorporate the services of BrokerageLink and Financial Engines, caused the Plan to engage in a prohibited transaction. The Panel remanded for the district court to consider whether AT&T met the requirements for an exemption from the prohibited-transaction bar because the contract was “reasonable,” the services were “necessary,” and no more than “reasonable compensation” was paid for the services. Specifically, the Panel remanded for the district court to consider whether Fidelity received no more than “reasonable compensation” from all sources, both direct and indirect, for the services it provided the Plan.
For similar reasons, the Panel also reversed the district court’s summary judgment on the duty-of-prudence claim. The Panel concluded that, as a fiduciary, AT&T was required to monitor the compensation that Fidelity received through BrokerageLink and Financial Engines. The Panel remanded for the district court to consider the duty-of prudence claim under the proper framework in the first instance.
On the reporting claim, the Panel affirmed as to the compensation from BrokerageLink and reversed as to the compensation from Financial Engines. The Panel concluded that AT&T adequately reported the compensation from Financial Engines on its Form 5500s with the Department of Labor, but it did not adequately report the compensation from Financial Engines because an alternative reporting method for “eligible indirect compensation” was not available.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/08/04/21-56196.pdf
ERISA-District Court Decides Case Involving Claim Of Breach of ERISA Fiduciary Duty Of Prudence (Posted 9/22/2023)
In Nunez v. B. Braun Medical Inc., No. 20-4195 (E.D. Penn. Aug. 18, 2023), the District Court says the following:
This case involves participants of a retirement savings plan bringing a class action lawsuit under the Employee Retirement Income Security Act against the plan’s overseeing committee. Specifically, the plaintiffs assert that the committee breached its duty of prudence regarding how it handled the plan’s investment funds and recordkeeping expenses during the defined class period.
The plaintiffs’ duty-of-prudence claim survived the committee’s motion to dismiss and subsequently its motion for summary judgment. Thus, the case ultimately culminated in a three day bench trial during which both sides presented evidence and testimony to the court. The plaintiffs argued that the committee, inter alia, failed to (1) investigate or select lower cost alternative funds for the plan, and (2) monitor or control the plan’s recordkeeping expenses. Meanwhile, the committee asserted that it had a prudent process in place for monitoring and controlling investment funds and recordkeeping expenses and that the plan’s investment fund and recordkeeping expenses were themselves prudent. Thus, both sides asked the court to find in their favor.
Upon weighing the evidence and the credibility of the witnesses, the court finds for the committee. For one, the court finds that, during the class period, the committee indeed engaged in objectively prudent conduct in its monitoring and handling of the plan’s investment funds and recordkeeping expenses. Likewise, the court finds that the plan’s investment fund options and recordkeeping expenses were objectively prudent throughout the class period. Accordingly, the court must enter judgment in favor of the committee and against the plaintiffs.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-paed-5_20-cv-04195/pdf/USCOURTS-paed-5_20-cv-04195-0.pdf
In Nunez v. B. Braun Medical Inc., No. 20-4195 (E.D. Penn. Aug. 18, 2023), the District Court says the following:
This case involves participants of a retirement savings plan bringing a class action lawsuit under the Employee Retirement Income Security Act against the plan’s overseeing committee. Specifically, the plaintiffs assert that the committee breached its duty of prudence regarding how it handled the plan’s investment funds and recordkeeping expenses during the defined class period.
The plaintiffs’ duty-of-prudence claim survived the committee’s motion to dismiss and subsequently its motion for summary judgment. Thus, the case ultimately culminated in a three day bench trial during which both sides presented evidence and testimony to the court. The plaintiffs argued that the committee, inter alia, failed to (1) investigate or select lower cost alternative funds for the plan, and (2) monitor or control the plan’s recordkeeping expenses. Meanwhile, the committee asserted that it had a prudent process in place for monitoring and controlling investment funds and recordkeeping expenses and that the plan’s investment fund and recordkeeping expenses were themselves prudent. Thus, both sides asked the court to find in their favor.
Upon weighing the evidence and the credibility of the witnesses, the court finds for the committee. For one, the court finds that, during the class period, the committee indeed engaged in objectively prudent conduct in its monitoring and handling of the plan’s investment funds and recordkeeping expenses. Likewise, the court finds that the plan’s investment fund options and recordkeeping expenses were objectively prudent throughout the class period. Accordingly, the court must enter judgment in favor of the committee and against the plaintiffs.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-paed-5_20-cv-04195/pdf/USCOURTS-paed-5_20-cv-04195-0.pdf
Employee Benefits-IRS Issues Rev. Proc. Containing Exceptions from the Electronic Filing Requirements for Certain Filers of Forms 8955- SSA and 5500-EZ (Posted 9/21/2023)
The IRS Issued Rev. Proc. 2023-31. According to the IRS this Rev. Proc. has the following purpose:
With respect to a Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, or Form 5500-EZ, Annual Return of A One Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan, required to be filed for a plan year beginning on or after January 1, 2024, this revenue procedure supersedes Rev. Proc. 2015-47, 2015-39 IRB 419 (which provides procedures for requesting a hardship waiver of the requirement to file these forms electronically), and refers filers to applicable Internal Revenue Service (IRS) publications, forms, instructions, or other guidance, including postings on the IRS.gov website, for the procedures to request a hardship waiver. This revenue procedure also addresses the availability of an administrative exemption from the requirement to file Form 8955-SSA electronically, and refers filers to applicable publications, forms, instructions, or other guidance, including postings on the IRS.gov website, for the procedures for claiming the administrative exemption.
See the Rev. Proc. for details. It may be found here: irs.gov/pub/irs-drop/rp-23-31.pdf
The IRS Issued Rev. Proc. 2023-31. According to the IRS this Rev. Proc. has the following purpose:
With respect to a Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, or Form 5500-EZ, Annual Return of A One Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan, required to be filed for a plan year beginning on or after January 1, 2024, this revenue procedure supersedes Rev. Proc. 2015-47, 2015-39 IRB 419 (which provides procedures for requesting a hardship waiver of the requirement to file these forms electronically), and refers filers to applicable Internal Revenue Service (IRS) publications, forms, instructions, or other guidance, including postings on the IRS.gov website, for the procedures to request a hardship waiver. This revenue procedure also addresses the availability of an administrative exemption from the requirement to file Form 8955-SSA electronically, and refers filers to applicable publications, forms, instructions, or other guidance, including postings on the IRS.gov website, for the procedures for claiming the administrative exemption.
See the Rev. Proc. for details. It may be found here: irs.gov/pub/irs-drop/rp-23-31.pdf
ERISA-Fourth Circuit Determines Whether Monetary Relief May Be Obtained Under ERISA (Posted 9/20/2023)
In Rose v. PSA Airlines, Inc., No. 21-2207 (4th Cir. Sep. 12, 2023), the Fourth Circuit Court of Appeals says the following:
The Employee Retirement Income Security Act’s § 502(a)(1)(B) allows a beneficiary to “recover benefits due to him under the terms of his plan.” And ERISA’s § 502(a)(3) allows a beneficiary to sue for “other appropriate equitable relief.” This case requires us to answer when—and under what conditions—a plaintiff may seek monetary relief under one of those provisions.
Jody Rose’s son had a rare heart condition. He died at the age of twenty-seven, awaiting a heart transplant, which Rose says that Defendants—who administered her son’s employer-based health benefits program—wrongfully denied. So she sued on behalf of his estate, seeking monetary relief under both § 502(a)(1)(B) and § 502(a)(3).
The district court dismissed both claims. As to Rose’s (a)(1)(B) claim, the court held that money was not one of the “benefits” that her son was owed “under the terms of his plan.” And, as to her (a)(3) claim, the court held that her requested monetary relief was too similar to money damages and was thus not “equitable.”
We now affirm in part and vacate in part. The district court correctly held that money was not one of the “benefits” that Rose’s son was “due” “under the terms of his plan.” So it was right to dismiss her (a)(1)(B) claim. But we must vacate its complete dismissal of Rose’s (a)(3) claim. While the district court correctly noted that compensatory, “make-whole” monetary relief is unavailable under § 502(a)(3), it did not consider whether Rose plausibly alleged facts that would support relief “typically” available in equity. Montanile v. Bd. of Trs., 577 U.S. 136, 142 (2016). We thus remand for the district court to decide in the first instance whether Rose can properly allege such a theory based on a Defendant’s unjust enrichment, including whether an unjust gain can be followed to “specifically identified funds that remain in the defendant’s possession” or to “traceable items that the defendant purchased with the funds.” Id. at 144–45.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca4/21-2207/21-2207-2023-09-12.pdf?ts=1694543431
In Rose v. PSA Airlines, Inc., No. 21-2207 (4th Cir. Sep. 12, 2023), the Fourth Circuit Court of Appeals says the following:
The Employee Retirement Income Security Act’s § 502(a)(1)(B) allows a beneficiary to “recover benefits due to him under the terms of his plan.” And ERISA’s § 502(a)(3) allows a beneficiary to sue for “other appropriate equitable relief.” This case requires us to answer when—and under what conditions—a plaintiff may seek monetary relief under one of those provisions.
Jody Rose’s son had a rare heart condition. He died at the age of twenty-seven, awaiting a heart transplant, which Rose says that Defendants—who administered her son’s employer-based health benefits program—wrongfully denied. So she sued on behalf of his estate, seeking monetary relief under both § 502(a)(1)(B) and § 502(a)(3).
The district court dismissed both claims. As to Rose’s (a)(1)(B) claim, the court held that money was not one of the “benefits” that her son was owed “under the terms of his plan.” And, as to her (a)(3) claim, the court held that her requested monetary relief was too similar to money damages and was thus not “equitable.”
We now affirm in part and vacate in part. The district court correctly held that money was not one of the “benefits” that Rose’s son was “due” “under the terms of his plan.” So it was right to dismiss her (a)(1)(B) claim. But we must vacate its complete dismissal of Rose’s (a)(3) claim. While the district court correctly noted that compensatory, “make-whole” monetary relief is unavailable under § 502(a)(3), it did not consider whether Rose plausibly alleged facts that would support relief “typically” available in equity. Montanile v. Bd. of Trs., 577 U.S. 136, 142 (2016). We thus remand for the district court to decide in the first instance whether Rose can properly allege such a theory based on a Defendant’s unjust enrichment, including whether an unjust gain can be followed to “specifically identified funds that remain in the defendant’s possession” or to “traceable items that the defendant purchased with the funds.” Id. at 144–45.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca4/21-2207/21-2207-2023-09-12.pdf?ts=1694543431
ERISA-Tenth Circuit Decides ERISA Breach Of Fiduciary Duty Claim (Posted 9/19/2023)
In Matney, et al. v. Barrick Gold of North America, et al., No. 22-4045 (10th Circ. 9/6/2023), the Tenth Circuit Court of Appeals says the following:
Appellants Cole Matney and Paul Watts (together, Mr. Matney) participated in an employer-sponsored retirement plan (the Plan). They brought this putative class action against Appellees—Barrick Gold of North America, Inc. (Barrick Gold), Barrick Gold’s Board of Directors (Board), and the Barrick U.S. Subsidiaries Benefits Committee (Committee)—for breach of fiduciary duty and failure to monitor fiduciaries under §§ 409 and 502 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1109, 1132. Mr. Matney alleged the Committee breached the fiduciary duty of prudence by offering high-cost funds and charging high fees. He claimed Barrick Gold and the Board were responsible for failing to monitor the Committee’s actions. The district court dismissed the case with prejudice, concluding the first amended complaint did not plausibly allege any breach of fiduciary duty under ERISA. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca10/22-4045/22-4045-2023-09-06.pdf?ts=1694018133
In Matney, et al. v. Barrick Gold of North America, et al., No. 22-4045 (10th Circ. 9/6/2023), the Tenth Circuit Court of Appeals says the following:
Appellants Cole Matney and Paul Watts (together, Mr. Matney) participated in an employer-sponsored retirement plan (the Plan). They brought this putative class action against Appellees—Barrick Gold of North America, Inc. (Barrick Gold), Barrick Gold’s Board of Directors (Board), and the Barrick U.S. Subsidiaries Benefits Committee (Committee)—for breach of fiduciary duty and failure to monitor fiduciaries under §§ 409 and 502 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1109, 1132. Mr. Matney alleged the Committee breached the fiduciary duty of prudence by offering high-cost funds and charging high fees. He claimed Barrick Gold and the Board were responsible for failing to monitor the Committee’s actions. The district court dismissed the case with prejudice, concluding the first amended complaint did not plausibly allege any breach of fiduciary duty under ERISA. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca10/22-4045/22-4045-2023-09-06.pdf?ts=1694018133
Taxation-D.C. Circuit Court Reviews Penalty Under Code Section 4980H (Posted 9/18/2023)
In Optimal Wireless LLC v. IRS, No. 22-5121 (D.C. Cir. Aug. 8, 2023), the D.C. Circuit Court says the following:
The Affordable Care Act obligates large employers to provide their full-time employees with health insurance coverage meeting certain requirements. If an employer fails to provide coverage or provides noncomplying coverage, it is liable for an exaction under 26 U.S.C. § 4980H.
In 2019, the Internal Revenue Service sent two letters proposing exactions under Section 4980H to appellant Optimal Wireless, a wireless communications company. Optimal then filed an action against the IRS and the Department of Health and Human Services, claiming that the agencies had failed to satisfy certain procedural requirements before imposing the proposed exactions. Optimal sought a declaratory judgment and an injunction barring the IRS from collecting any money without complying with those procedures.
The district court dismissed Optimal’s suit for lack of jurisdiction. The court held that an exaction under Section 4980H is a “tax” for purposes of the Anti-Injunction Act, which strips courts of jurisdiction over suits having the “purpose of restraining the assessment or collection of any tax.” 26 U.S.C. § 7421(a). We agree with the district court.
The case may be found here: https://www.cadc.uscourts.gov/internet/opinions.nsf/A71E924D7B81C58E85258A05004EED3A/$file/22-5121-2011339.pdf
In Optimal Wireless LLC v. IRS, No. 22-5121 (D.C. Cir. Aug. 8, 2023), the D.C. Circuit Court says the following:
The Affordable Care Act obligates large employers to provide their full-time employees with health insurance coverage meeting certain requirements. If an employer fails to provide coverage or provides noncomplying coverage, it is liable for an exaction under 26 U.S.C. § 4980H.
In 2019, the Internal Revenue Service sent two letters proposing exactions under Section 4980H to appellant Optimal Wireless, a wireless communications company. Optimal then filed an action against the IRS and the Department of Health and Human Services, claiming that the agencies had failed to satisfy certain procedural requirements before imposing the proposed exactions. Optimal sought a declaratory judgment and an injunction barring the IRS from collecting any money without complying with those procedures.
The district court dismissed Optimal’s suit for lack of jurisdiction. The court held that an exaction under Section 4980H is a “tax” for purposes of the Anti-Injunction Act, which strips courts of jurisdiction over suits having the “purpose of restraining the assessment or collection of any tax.” 26 U.S.C. § 7421(a). We agree with the district court.
The case may be found here: https://www.cadc.uscourts.gov/internet/opinions.nsf/A71E924D7B81C58E85258A05004EED3A/$file/22-5121-2011339.pdf
Employee Benefits-IRS Issues Notice Stating That Plan Sponsors That Filed Timely And Complete Forms 8955-SSA Do Not Need To Respond To Penalty Notices Dated Before September 1, 2023 (Posted 9/15/2023)
See the Notice for details. It may be found here: https://benefitslink.com/src/irs/irs-newsletter-cp283c-09012023.html
See the Notice for details. It may be found here: https://benefitslink.com/src/irs/irs-newsletter-cp283c-09012023.html
ERISA-Seventh Circuit Reviews Claim For Long-Term Disability Benefits (Posted 9/14/2023)
In Scanlon v. Life Insurance Co. of North America, No. 22-1121 (7th Cir. 8/31/2023), the Seventh Circuit Court of Appeals says the following:
Army veteran with a history of chronic pain and sleep disorders. He sought long term disability benefits pursuant to his employer’s group policy with the Life Insurance Company of North America (“LINA”). When LINA denied his claim, Scanlon sought de novo review in the district court under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132. The district court found Scanlon not entitled to benefits, so Scanlon filed this appeal.
We conclude that the district court clearly erred when it failed to consider Scanlon’s inability to sit at his desk for eight hours a day as required by his occupation and his inability to perform the cognitive requirements of his job during regular work hours. The district court also erred in its treatment of certain medical records Scanlon provided. We therefore vacate and remand.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca7/22-1121/22-1121-2023-08-31.pdf?ts=1693497669
In Scanlon v. Life Insurance Co. of North America, No. 22-1121 (7th Cir. 8/31/2023), the Seventh Circuit Court of Appeals says the following:
Army veteran with a history of chronic pain and sleep disorders. He sought long term disability benefits pursuant to his employer’s group policy with the Life Insurance Company of North America (“LINA”). When LINA denied his claim, Scanlon sought de novo review in the district court under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132. The district court found Scanlon not entitled to benefits, so Scanlon filed this appeal.
We conclude that the district court clearly erred when it failed to consider Scanlon’s inability to sit at his desk for eight hours a day as required by his occupation and his inability to perform the cognitive requirements of his job during regular work hours. The district court also erred in its treatment of certain medical records Scanlon provided. We therefore vacate and remand.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca7/22-1121/22-1121-2023-08-31.pdf?ts=1693497669
Employee Benefits-IRS Issues Notice Providing Guidance On Section 603 Of The SECURE 2.0 Act With Respect To Catch-Up Contributions (Posted 9/13/2023)
The IRS has issued Notice 2023-62. According to the IRS, this Notice has the following purpose:
This notice provides guidance with respect to section 603 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Among other changes, section 603 of the SECURE 2.0 Act requires that, in the case of certain eligible participants, catch-up contributions under section 414(v)(1) of the Internal Revenue Code (Code) must be designated as Roth contributions pursuant to an employee election.
This notice is not intended to provide comprehensive guidance as to section 603 of the SECURE 2.0 Act, but rather is intended to provide guidance on particular issues to assist in the implementation of that section. This notice also announces a 2-year administrative transition period with respect to the requirement under section 603 of the SECURE 2.0 Act that catch-up contributions made on behalf of certain eligible participants be designated as Roth contributions.
The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have been made aware of taxpayer concerns with being able to timely implement section 603 of the SECURE 2.0 Act. The administrative transition period described in this notice is intended to facilitate an orderly transition for compliance with that requirement. The Treasury Department and the IRS continue to work on implementation of section 603 of the SECURE 2.0 Act and intend to issue further guidance, as described in section V of this notice. The Treasury Department and the IRS invite comments on this notice and any other aspect of section 603 of the SECURE 2.0 Act.
See the Notice for details. It may be found at: https://benefitslink.com/src/irs/n-23-62.pdf
The IRS has issued Notice 2023-62. According to the IRS, this Notice has the following purpose:
This notice provides guidance with respect to section 603 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Among other changes, section 603 of the SECURE 2.0 Act requires that, in the case of certain eligible participants, catch-up contributions under section 414(v)(1) of the Internal Revenue Code (Code) must be designated as Roth contributions pursuant to an employee election.
This notice is not intended to provide comprehensive guidance as to section 603 of the SECURE 2.0 Act, but rather is intended to provide guidance on particular issues to assist in the implementation of that section. This notice also announces a 2-year administrative transition period with respect to the requirement under section 603 of the SECURE 2.0 Act that catch-up contributions made on behalf of certain eligible participants be designated as Roth contributions.
The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have been made aware of taxpayer concerns with being able to timely implement section 603 of the SECURE 2.0 Act. The administrative transition period described in this notice is intended to facilitate an orderly transition for compliance with that requirement. The Treasury Department and the IRS continue to work on implementation of section 603 of the SECURE 2.0 Act and intend to issue further guidance, as described in section V of this notice. The Treasury Department and the IRS invite comments on this notice and any other aspect of section 603 of the SECURE 2.0 Act.
See the Notice for details. It may be found at: https://benefitslink.com/src/irs/n-23-62.pdf
ERISA-Ninth Circuit Reviews Case Involving ERISA Claim Of Breach Of Fiduciary Duties And Wrongful Denial Of Benefits (Posted 9/12/2023)
In Wit v. United Behavioral Health, Nos. 20-17363 and 21-15193 (9th Cir. Aug. 22, 2023), the following occurred:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) filed (1) an order vacating a prior opinion, replacing it with a new opinion, granting a petition for Panel rehearing, and denying as moot a petition for rehearing en banc; and (2) an opinion affirming in part and reversing in part the district court’s judgment, after a bench trial, finding United Behavioral Health (“UBH”) liable under ERISA for breach of fiduciary duties and wrongful denial of benefits, and awarding declaratory and injunctive relief, to three classes of plaintiffs who were beneficiaries of ERISA governed health benefit plans for which UBH was the claims administrator.
The Panel held that plaintiffs had Article III standing to bring their claims. Plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denial of benefits claim. Further, plaintiffs alleged a particularized injury as to both claims because UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making medical necessity or coverage determinations materially affected each plaintiff. And plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct.
The Panel held that the district court did not err in certifying the three classes to pursue the fiduciary duty claim, but the Panel reversed the district court’s certification of the denial of benefits classes. The Panel held that, by certifying the denial of benefits classes without limiting the classes to those with claims that UBH denied under a specific Guidelines provision or provisions challenged in this litigation that applied to the claimant’s own request for benefits, the certification order improperly enlarged or modified plaintiffs’ substantive rights in violation of the Rules Enabling Act.
The Panel held that, on the merits, the district court erred to the extent it determined that the ERISA plans required the Guidelines to be coextensive with generally accepted standards of care. The Panel therefore reversed the judgment on plaintiffs’ denial of benefits claim. To the extent the judgment on plaintiffs’ breach of fiduciary duty claim was based on the district court’s erroneous interpretation of the ERISA plans, it was also reversed. The Panel remanded for the district court to answer the threshold question of whether the fiduciary duty claim was subject to the plans’ administrative exhaustion requirement and, if so, whether the requirement was satisfied by unnamed class members or should otherwise be excused.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/08/22/20-17363.pdf
ERISA-District Court Rules On ERISA Claim Against The Plan’s Overseeing Committee For Mishandling Funds And Recordkeeping Expenses (Posted 9/11/2023)
In Nunez v. B. Braun Medical Inc., No. 20-4195 (E.D. Penn. Aug. 18, 2023), the District Court says the following:
This case involves participants of a retirement savings plan bringing a class action lawsuit under the Employee Retirement Income Security Act against the plan’s overseeing committee. Specifically, the plaintiffs assert that the committee breached its duty of prudence regarding how it handled the plan’s investment funds and recordkeeping expenses during the defined class period.
The plaintiffs’ duty-of-prudence claim survived the committee’s motion to dismiss and subsequently its motion for summary judgment. Thus, the case ultimately culminated in a three day bench trial during which both sides presented evidence and testimony to the court. The plaintiffs argued that the committee, inter alia, failed to (1) investigate or select lower cost alternative funds for the plan, and (2) monitor or control the plan’s recordkeeping expenses. Meanwhile, the committee asserted that it had a prudent process in place for monitoring and controlling investment funds and recordkeeping expenses and that the plan’s investment fund options and recordkeeping expenses were themselves prudent. Thus, both sides asked the court to find in their favor.
Upon weighing the evidence and the credibility of the witnesses, the court finds for the committee. For one, the court finds that, during the class period, the committee indeed engaged in objectively prudent conduct in its monitoring and handling of the plan’s investment funds and recordkeeping expenses. Likewise, the court finds that the plan’s investment fund options and recordkeeping expenses were objectively prudent throughout the class period. Accordingly, the court must enter judgment in favor of the committee and against the plaintiffs.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-paed-5_20-cv-04195/pdf/USCOURTS-paed-5_20-cv-04195-0.pdf
In Nunez v. B. Braun Medical Inc., No. 20-4195 (E.D. Penn. Aug. 18, 2023), the District Court says the following:
This case involves participants of a retirement savings plan bringing a class action lawsuit under the Employee Retirement Income Security Act against the plan’s overseeing committee. Specifically, the plaintiffs assert that the committee breached its duty of prudence regarding how it handled the plan’s investment funds and recordkeeping expenses during the defined class period.
The plaintiffs’ duty-of-prudence claim survived the committee’s motion to dismiss and subsequently its motion for summary judgment. Thus, the case ultimately culminated in a three day bench trial during which both sides presented evidence and testimony to the court. The plaintiffs argued that the committee, inter alia, failed to (1) investigate or select lower cost alternative funds for the plan, and (2) monitor or control the plan’s recordkeeping expenses. Meanwhile, the committee asserted that it had a prudent process in place for monitoring and controlling investment funds and recordkeeping expenses and that the plan’s investment fund options and recordkeeping expenses were themselves prudent. Thus, both sides asked the court to find in their favor.
Upon weighing the evidence and the credibility of the witnesses, the court finds for the committee. For one, the court finds that, during the class period, the committee indeed engaged in objectively prudent conduct in its monitoring and handling of the plan’s investment funds and recordkeeping expenses. Likewise, the court finds that the plan’s investment fund options and recordkeeping expenses were objectively prudent throughout the class period. Accordingly, the court must enter judgment in favor of the committee and against the plaintiffs.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-paed-5_20-cv-04195/pdf/USCOURTS-paed-5_20-cv-04195-0.pdf
Taxation-IRS Issues Rev. Proc. Containing Table Used To Calculate An Individual’s Premium Tax Credit Under Code Section 36B (Posted 9/8/2023)
The IRS has issued Rev. Proc. 2023-29. This revenue procedure states that its purpose is to provide the applicable percentage table (Applicable Percentage Table) in § 36B(b)(3)(A) of the Internal Revenue Code (Code) for taxable years beginning in calendar year 2024. This table is used to calculate an individual’s premium tax credit under § 36B. This revenue procedure also provides the indexing adjustment for the required contribution percentage (Required Contribution Percentage) in § 36B(c)(2)(C)(i)(II) for plan years beginning in calendar year 2024. This percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage under § 36B.
Rev. Proc. 2023-29 can be found here: https://www.irs.gov/pub/irs-drop/rp-23-29.pdf
The IRS has issued Rev. Proc. 2023-29. This revenue procedure states that its purpose is to provide the applicable percentage table (Applicable Percentage Table) in § 36B(b)(3)(A) of the Internal Revenue Code (Code) for taxable years beginning in calendar year 2024. This table is used to calculate an individual’s premium tax credit under § 36B. This revenue procedure also provides the indexing adjustment for the required contribution percentage (Required Contribution Percentage) in § 36B(c)(2)(C)(i)(II) for plan years beginning in calendar year 2024. This percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage under § 36B.
Rev. Proc. 2023-29 can be found here: https://www.irs.gov/pub/irs-drop/rp-23-29.pdf
Taxation- Seventh Circuit Considers Tax Deduction For Deferred Compensation (Posted 9/7/2023)
In Hoops, LP and Heisley Member, Inc. Tax Matters Partner v. Comm'r, No. 22-2012 (7th Cir. Aug. 9, 2023), the Seventh Circuit Court of Appeals says the following:
Hoops LP seeks a $10.7 million tax deduction for deferred compensation that it owed to two of its employees at the close of the 2012 tax year. Under 26 U.S.C. § 404(a)(5), an accrual-based taxpayer like Hoops can only deduct deferred compensation expenses in the tax years when it pays its employees or contributes to certain qualified plans, such as a trust or pension fund.
Hoops did not do either, however. Instead in 2012 the firm sold substantially all its assets and liabilities. As part of the transaction, the buyer assumed Hoops’s $10.7 million deferred compensation liability. Hoops viewed this $10.7 million amount as a deemed payment to the buyer to compensate it for assuming the deferred compensation obligation. So Hoops took a tax deduction under Treasury Regulation § 1.461-4(d)(5)(i) on its 2012 partnership return, claiming the buyer’s assumption of the $10.7 million liability as an ordinary business expense deductible at the time of sale.
The Internal Revenue Service denied the deduction, and the Tax Court upheld the disallowance. The Tax Court determined that § 404(a)(5) of the Tax Code barred Hoops from claiming a deduction for deferred compensation in the 2012 tax year because the firm did not pay the employees during that year. We agree and affirm.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-ca7-22-02012/pdf/USCOURTS-ca7-22-02012-0.pdf
In Hoops, LP and Heisley Member, Inc. Tax Matters Partner v. Comm'r, No. 22-2012 (7th Cir. Aug. 9, 2023), the Seventh Circuit Court of Appeals says the following:
Hoops LP seeks a $10.7 million tax deduction for deferred compensation that it owed to two of its employees at the close of the 2012 tax year. Under 26 U.S.C. § 404(a)(5), an accrual-based taxpayer like Hoops can only deduct deferred compensation expenses in the tax years when it pays its employees or contributes to certain qualified plans, such as a trust or pension fund.
Hoops did not do either, however. Instead in 2012 the firm sold substantially all its assets and liabilities. As part of the transaction, the buyer assumed Hoops’s $10.7 million deferred compensation liability. Hoops viewed this $10.7 million amount as a deemed payment to the buyer to compensate it for assuming the deferred compensation obligation. So Hoops took a tax deduction under Treasury Regulation § 1.461-4(d)(5)(i) on its 2012 partnership return, claiming the buyer’s assumption of the $10.7 million liability as an ordinary business expense deductible at the time of sale.
The Internal Revenue Service denied the deduction, and the Tax Court upheld the disallowance. The Tax Court determined that § 404(a)(5) of the Tax Code barred Hoops from claiming a deduction for deferred compensation in the 2012 tax year because the firm did not pay the employees during that year. We agree and affirm.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-ca7-22-02012/pdf/USCOURTS-ca7-22-02012-0.pdf
ERISA- Tenth Circuit Decides Claim For Health Care Benefits Under ERISA (Posted 9/6/2023)
In P., et al. v. United Healthcare Insurance, et al., No. 21-4129 (10th Cir. 8/15/2023), the Tenth Circuit Court of Appeals says the following:
In this action under the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 (“ERISA”), Plaintiffs David P. and his daughter L.P. sought to recover health care benefits under a medical plan David P. obtained through his employer. The district court awarded Plaintiffs benefits, determining that the manner in which Defendants processed Plaintiffs’ claims for coverage violated ERISA. We agree, concluding Defendants’ deficient claims processing circumvented the dialogue ERISA mandates between plan participants claiming benefits and the plan administrators processing those benefits claims. We disagree with the district court, however, as to the appropriate remedy for the violations of ERISA’s claims-processing requirements at issue here. Rather than outright granting Plaintiffs their claimed benefits, we conclude, instead, that Plaintiffs’ claims for benefits should be remanded to Defendants for proper consideration. Having jurisdiction under 28 U.S.C. § 1291, we, therefore, AFFIRM the district court’s ruling that Defendants violated ERISA, but we REVERSE the district court’s decision to award Plaintiffs benefits and, instead, REMAND this case to the district court with directions to remand Plaintiffs’ benefits claims to Defendants.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca10/21-4129/21-4129-2023-08-15.pdf?ts=1692113634
In P., et al. v. United Healthcare Insurance, et al., No. 21-4129 (10th Cir. 8/15/2023), the Tenth Circuit Court of Appeals says the following:
In this action under the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 (“ERISA”), Plaintiffs David P. and his daughter L.P. sought to recover health care benefits under a medical plan David P. obtained through his employer. The district court awarded Plaintiffs benefits, determining that the manner in which Defendants processed Plaintiffs’ claims for coverage violated ERISA. We agree, concluding Defendants’ deficient claims processing circumvented the dialogue ERISA mandates between plan participants claiming benefits and the plan administrators processing those benefits claims. We disagree with the district court, however, as to the appropriate remedy for the violations of ERISA’s claims-processing requirements at issue here. Rather than outright granting Plaintiffs their claimed benefits, we conclude, instead, that Plaintiffs’ claims for benefits should be remanded to Defendants for proper consideration. Having jurisdiction under 28 U.S.C. § 1291, we, therefore, AFFIRM the district court’s ruling that Defendants violated ERISA, but we REVERSE the district court’s decision to award Plaintiffs benefits and, instead, REMAND this case to the district court with directions to remand Plaintiffs’ benefits claims to Defendants.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca10/21-4129/21-4129-2023-08-15.pdf?ts=1692113634
Employee Benefits-DOL Issues Guide For Employee On Understanding Mental Health And Substance Use Disorder Benefits (Posted 9/5/2023)
The Guide begins as follows:
The goal of mental health parity protections under the law is to ensure that mental health and substance use disorder benefits you expect to receive are covered just like medical/surgical benefits, without barriers and roadblocks to access that don’t apply to medical/surgical benefits.
This guide:
• helps you figure out whether your health plan must provide parity and follow these rules;
• explains the protections the law provides; • highlights “red flags” to look out for;
• tells you how to learn about your mental health and substance use disorder benefits; and
• walks you through what to do if coverage of your mental health and substance use disorder benefits has been denied.
See the Guide for details. It may be found here: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/understanding-your-mental-health-and-substance-use-disorder-benefits.pdf
The Guide begins as follows:
The goal of mental health parity protections under the law is to ensure that mental health and substance use disorder benefits you expect to receive are covered just like medical/surgical benefits, without barriers and roadblocks to access that don’t apply to medical/surgical benefits.
This guide:
• helps you figure out whether your health plan must provide parity and follow these rules;
• explains the protections the law provides; • highlights “red flags” to look out for;
• tells you how to learn about your mental health and substance use disorder benefits; and
• walks you through what to do if coverage of your mental health and substance use disorder benefits has been denied.
See the Guide for details. It may be found here: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/understanding-your-mental-health-and-substance-use-disorder-benefits.pdf
Employee Benefits-IRS Issues Reminder To Employers And Employees About Use Of Educational Assistance Programs (Posted 9/1/2023)
Here is what the Reminder provides:
IR-2023-152, Aug. 24, 2023
WASHINGTON — With the fall college semester quickly approaching, the Internal Revenue Service today reminded employers and employees that under federal law, employers who have educational assistance programs can use them to help pay student loan obligations for their employees.
As part of a wider effort to promote this benefit the IRS will hold a free webinar on Sept. 14 to help interested taxpayers and tax professionals better understand this special provision.
"The IRS wants to remind both employers and employees about this special feature that can help with student loans," IRS Commissioner Danny Werfel said. "There is a limited window of time for this educational assistance program, and the IRS wants to make sure employers don't overlook this option that can help businesses attract and retain workers."
Though educational assistance programs have been available for many years, the option to use them to pay student loans has been available only for payments made after March 27, 2020, and, under current law, will continue to be available until Dec. 31, 2025.
Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee's qualified education loans. Payments made directly to the lender, as well as those made to the employee, qualify.
By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.
Employers who don't have an educational assistance program may want to consider setting one up. In a tight labor market, worthwhile fringe benefits such as educational assistance programs can help employers attract and retain qualified workers.
These programs must be in writing and cannot discriminate in favor of highly compensated employees. For information on other requirements, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. For details on what qualifies as a student loan, see Chapter 10 in Publication 970, Tax Benefits for Education.
The IRS is taking a number of steps to highlight this important provision.
A free 75-minute webinar will begin at 2 p.m. ET on Thursday, Sept. 14 and will include a question-and-answer session. To register for the webinar or for more information, visit the Webinars for Tax Practitioners page or the Webinars for Small Businesses page on IRS.gov.
The IRS will also be sharing more information about this through e-newsletters that reach the small business, tax-exempt and tax professional communities as well as highlighting this through IRS social media channels.
In addition, Sen. Mark Warner of Virginia shared the following quote:
As student loan repayments resume, employers should take full advantage of educational assistance programs that can be used to help pay student loan obligations for their employees," said Sen. Mark Warner of Virginia. "This benefit not only provides a pathway towards student debt relief for borrowers but also gives employers the ability to recruit and retain high-quality talent. I'm grateful that the IRS is continuing to conduct meaningful outreach to ensure that both employers and employees are seizing this opportunity.
The Reminder may be found here: https://www.irs.gov/newsroom/reminder-to-employers-and-employees-educational-assistance-programs-can-be-used-to-help-pay-workers-student-loans-free-irs-webinar-will-offer-details
Here is what the Reminder provides:
IR-2023-152, Aug. 24, 2023
WASHINGTON — With the fall college semester quickly approaching, the Internal Revenue Service today reminded employers and employees that under federal law, employers who have educational assistance programs can use them to help pay student loan obligations for their employees.
As part of a wider effort to promote this benefit the IRS will hold a free webinar on Sept. 14 to help interested taxpayers and tax professionals better understand this special provision.
"The IRS wants to remind both employers and employees about this special feature that can help with student loans," IRS Commissioner Danny Werfel said. "There is a limited window of time for this educational assistance program, and the IRS wants to make sure employers don't overlook this option that can help businesses attract and retain workers."
Though educational assistance programs have been available for many years, the option to use them to pay student loans has been available only for payments made after March 27, 2020, and, under current law, will continue to be available until Dec. 31, 2025.
Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee's qualified education loans. Payments made directly to the lender, as well as those made to the employee, qualify.
By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.
Employers who don't have an educational assistance program may want to consider setting one up. In a tight labor market, worthwhile fringe benefits such as educational assistance programs can help employers attract and retain qualified workers.
These programs must be in writing and cannot discriminate in favor of highly compensated employees. For information on other requirements, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. For details on what qualifies as a student loan, see Chapter 10 in Publication 970, Tax Benefits for Education.
The IRS is taking a number of steps to highlight this important provision.
A free 75-minute webinar will begin at 2 p.m. ET on Thursday, Sept. 14 and will include a question-and-answer session. To register for the webinar or for more information, visit the Webinars for Tax Practitioners page or the Webinars for Small Businesses page on IRS.gov.
The IRS will also be sharing more information about this through e-newsletters that reach the small business, tax-exempt and tax professional communities as well as highlighting this through IRS social media channels.
In addition, Sen. Mark Warner of Virginia shared the following quote:
As student loan repayments resume, employers should take full advantage of educational assistance programs that can be used to help pay student loan obligations for their employees," said Sen. Mark Warner of Virginia. "This benefit not only provides a pathway towards student debt relief for borrowers but also gives employers the ability to recruit and retain high-quality talent. I'm grateful that the IRS is continuing to conduct meaningful outreach to ensure that both employers and employees are seizing this opportunity.
The Reminder may be found here: https://www.irs.gov/newsroom/reminder-to-employers-and-employees-educational-assistance-programs-can-be-used-to-help-pay-workers-student-loans-free-irs-webinar-will-offer-details
ERISA-Tenth Circuit Rules That ERISA And Medicare Part D Preempt Certain State Law Statutory Provisions (Posted 8/31/2023)
In Pharmaceutical Care Management Association v, Mulready, No. 22-6074 (10th Circ. 8/15/2023) the Tenth Circuit Court of Appeals says the following:
The Constitution ordains a federal system under which the federal and state governments share power. But when federal and state laws collide, the Constitution is clear: Federal law wins. This case is about a collision between federal law and Oklahoma law.
In 2019, the Oklahoma legislature unanimously passed the Patient’s Right to Pharmacy Choice Act, Okla. Stat. tit. 36, § 6958 et seq. The Act, along with later regulations promulgated by the Oklahoma Insurance Department, sought to regulate pharmacy benefit managers (PBMs)—third-party intermediaries between pharmacies and health plans. In response to the Act’s passage, the Pharmaceutical Care Management Association (PCMA), a trade association representing PBMs, sued to invalidate the Act, alleging that the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., and Medicare Part D, 42 U.S.C. § 1395w-101 et seq., preempted the Act. The district court ruled that ERISA did not preempt the Act but that Medicare Part D preempted six of the thirteen challenged provisions. PCMA now appeals the court’s ERISA ruling on four provisions of the Act and the court’s Medicare Part D ruling on one provision.
Exercising jurisdiction under 28 U.S.C. § 1291, we hold that ERISA and Medicare Part D preempt the four challenged provisions, and we reverse.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110903570.pdf
In Pharmaceutical Care Management Association v, Mulready, No. 22-6074 (10th Circ. 8/15/2023) the Tenth Circuit Court of Appeals says the following:
The Constitution ordains a federal system under which the federal and state governments share power. But when federal and state laws collide, the Constitution is clear: Federal law wins. This case is about a collision between federal law and Oklahoma law.
In 2019, the Oklahoma legislature unanimously passed the Patient’s Right to Pharmacy Choice Act, Okla. Stat. tit. 36, § 6958 et seq. The Act, along with later regulations promulgated by the Oklahoma Insurance Department, sought to regulate pharmacy benefit managers (PBMs)—third-party intermediaries between pharmacies and health plans. In response to the Act’s passage, the Pharmaceutical Care Management Association (PCMA), a trade association representing PBMs, sued to invalidate the Act, alleging that the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., and Medicare Part D, 42 U.S.C. § 1395w-101 et seq., preempted the Act. The district court ruled that ERISA did not preempt the Act but that Medicare Part D preempted six of the thirteen challenged provisions. PCMA now appeals the court’s ERISA ruling on four provisions of the Act and the court’s Medicare Part D ruling on one provision.
Exercising jurisdiction under 28 U.S.C. § 1291, we hold that ERISA and Medicare Part D preempt the four challenged provisions, and we reverse.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110903570.pdf
Health Benefits-CMS Issues Guidance On Annual Redetermination and Re-enrollment For Marketplace Coverage For 2024 and Later Years (Posted 8/30/2023)
The background is as follows:
45 CFR 155.335(a)(2) provides that Health Insurance Marketplaces have three options to redetermine on an annual basis eligibility for enrollment in a qualified health plan (QHP) through a Marketplace and for insurance affordability programs. 45 CFR 155.335(a)(2)(ii) provides that one of these options is a set of alternative procedures specified by the Secretary for the applicable benefit year. This guidance describes these alternative procedures for benefit years 2024 and later, replacing earlier guidance.
The Marketplaces using the federal eligibility and enrollment platform will follow the approach described in this guidance. Marketplaces not using the federal eligibility and enrollment platform may also choose to follow these procedures, per 45 CFR 155.335(a)(2)(ii), or may otherwise follow (a)(2)(i) or (iii). This guidance retains key procedures with some updates to reflect current law and Marketplace operations. As in years past, the alternative procedures for benefit years 2024 and later preserve as a core feature of the annual redetermination and re-enrollment process that, in general, an enrollee may take no action and maintain coverage across benefit years, which is important in promoting continuity of coverage while limiting administrative burden for enrollees, issuers, and Marketplaces. This guidance uses the terms “current benefit year,” “upcoming benefit year,” and “prior benefit year.” For example, at the time of publishing this guidance, the current benefit year is 2023, the upcoming benefit year is 2024, and the prior benefit year is 2022.
See the Guidance for details. It may be found here: https://www.cms.gov/files/document/guidance-annual-redetermination-and-re-enrollment-marketplace-coverage-2024-and-later-years.pdf
The background is as follows:
45 CFR 155.335(a)(2) provides that Health Insurance Marketplaces have three options to redetermine on an annual basis eligibility for enrollment in a qualified health plan (QHP) through a Marketplace and for insurance affordability programs. 45 CFR 155.335(a)(2)(ii) provides that one of these options is a set of alternative procedures specified by the Secretary for the applicable benefit year. This guidance describes these alternative procedures for benefit years 2024 and later, replacing earlier guidance.
The Marketplaces using the federal eligibility and enrollment platform will follow the approach described in this guidance. Marketplaces not using the federal eligibility and enrollment platform may also choose to follow these procedures, per 45 CFR 155.335(a)(2)(ii), or may otherwise follow (a)(2)(i) or (iii). This guidance retains key procedures with some updates to reflect current law and Marketplace operations. As in years past, the alternative procedures for benefit years 2024 and later preserve as a core feature of the annual redetermination and re-enrollment process that, in general, an enrollee may take no action and maintain coverage across benefit years, which is important in promoting continuity of coverage while limiting administrative burden for enrollees, issuers, and Marketplaces. This guidance uses the terms “current benefit year,” “upcoming benefit year,” and “prior benefit year.” For example, at the time of publishing this guidance, the current benefit year is 2023, the upcoming benefit year is 2024, and the prior benefit year is 2022.
See the Guidance for details. It may be found here: https://www.cms.gov/files/document/guidance-annual-redetermination-and-re-enrollment-marketplace-coverage-2024-and-later-years.pdf
Employee Benefits-Gov’t Issues No Surprises Act (NSA) Independent Dispute Resolution (IDR) Administrative Fee Frequently Asked Questions (FAQs) (Posted 8/29/2023)
The FAQs begin as follows: On August 3, 2023, the U.S. District Court for the Eastern District of Texas (district court) issued an opinion and order in Texas Medical Association v. United States Department of Health and Human Services, Case No. 6:23-cv-59-JDK (TMA IV). This order vacated the $350 administrative fee per party established by the Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process Under the No Surprises Act: Change in Administrative Fee issued on December 23, 2022. The following FAQs explain how the Departments of Health and Human Services (HHS), Labor, and the Treasury (collectively, the Departments) will handle the administrative fee in accordance with this order. These FAQs are not announcing the reopening of the Federal IDR portal to submit new disputes. The Departments intend to reopen the portal to permit the submission of new disputes soon and will notify interested parties at that time.
See the FAQs for details. They may be found here: https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf
The FAQs begin as follows: On August 3, 2023, the U.S. District Court for the Eastern District of Texas (district court) issued an opinion and order in Texas Medical Association v. United States Department of Health and Human Services, Case No. 6:23-cv-59-JDK (TMA IV). This order vacated the $350 administrative fee per party established by the Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process Under the No Surprises Act: Change in Administrative Fee issued on December 23, 2022. The following FAQs explain how the Departments of Health and Human Services (HHS), Labor, and the Treasury (collectively, the Departments) will handle the administrative fee in accordance with this order. These FAQs are not announcing the reopening of the Federal IDR portal to submit new disputes. The Departments intend to reopen the portal to permit the submission of new disputes soon and will notify interested parties at that time.
See the FAQs for details. They may be found here: https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/no-surprises-act-independent-dispute-resolution-administrative-fee-frequently-asked-questions.pdf
Employee Benefits-IRS Issues New Rewlease Cautioning Sponsors To Be Alert To Compliance Issues Associated With ESOPs (Posted 8/28/2023)
See the News Release for details. It may be found here: https://www.irs.gov/newsroom/irs-cautions-plan-sponsors-to-be-alert-to-compliance-issues-associated-with-esops
See the News Release for details. It may be found here: https://www.irs.gov/newsroom/irs-cautions-plan-sponsors-to-be-alert-to-compliance-issues-associated-with-esops
ERISA-Sixth Circuit Rules On Claim For Long-Term Disaability Benefits (Posted 8/25/2023)
In Avery v. Sedgwick Claims Management Services, Inc., No. 22-1960 (6th Cir. July 24, 2023) (Unpublished), the Sixth Circuit Court of Appeals says the following:
For roughly two years, Jacqueline Avery received long-term disability benefits from her former employer, Chrysler Group LLC (Chrysler), through its FCA US LLC Long Term Disability Benefit Plan (the Plan). The Plan’s third-party claims administrator, Sedgwick Claims Management Services, Inc. (Sedgwick), later terminated those benefits after concluding that Avery no longer qualified as “totally disabled” within the meaning of the Plan. Avery brought this action under 29 U.S.C. § 1332(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA) to recover and reinstate her long-term disability benefits. The district court granted judgment on the administrative record in favor of Sedgwick and the Plan, and Avery now appeals. For the following reasons, we affirm.
The case may be found here: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0338n-06.pdf
In Avery v. Sedgwick Claims Management Services, Inc., No. 22-1960 (6th Cir. July 24, 2023) (Unpublished), the Sixth Circuit Court of Appeals says the following:
For roughly two years, Jacqueline Avery received long-term disability benefits from her former employer, Chrysler Group LLC (Chrysler), through its FCA US LLC Long Term Disability Benefit Plan (the Plan). The Plan’s third-party claims administrator, Sedgwick Claims Management Services, Inc. (Sedgwick), later terminated those benefits after concluding that Avery no longer qualified as “totally disabled” within the meaning of the Plan. Avery brought this action under 29 U.S.C. § 1332(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA) to recover and reinstate her long-term disability benefits. The district court granted judgment on the administrative record in favor of Sedgwick and the Plan, and Avery now appeals. For the following reasons, we affirm.
The case may be found here: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0338n-06.pdf
ERISA-Sixth Circuit Rules On FMLA Claim (Posted 8/24/2023)
In Milmen v. Fieger & Fieger, P.C., No. 21-2685 (6th Cir. Jan. 25, 2023), the Sixth Circuit Court of Appeals says the following:
In March 2020, Fieger & Fieger, P.C., terminated Polina Milman immediately after she made a request for unpaid leave to care for her two-year old son—a child with a history of respiratory illness that was experiencing symptoms resembling COVID-19. Milman sued Fieger & Fieger, P.C., and its owner, Geoffrey Fieger (collectively, the Firm), alleging that her termination violated the Family and Medical Leave Act (FMLA). The district court dismissed Milman’s FMLA claim, concluding that because she was not entitled to the leave she sought, she could not state a plausible claim. For the reasons that follow, we REVERSE and REMAND for further proceedings.
The case may be found here: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0014p-06.pdf
In Milmen v. Fieger & Fieger, P.C., No. 21-2685 (6th Cir. Jan. 25, 2023), the Sixth Circuit Court of Appeals says the following:
In March 2020, Fieger & Fieger, P.C., terminated Polina Milman immediately after she made a request for unpaid leave to care for her two-year old son—a child with a history of respiratory illness that was experiencing symptoms resembling COVID-19. Milman sued Fieger & Fieger, P.C., and its owner, Geoffrey Fieger (collectively, the Firm), alleging that her termination violated the Family and Medical Leave Act (FMLA). The district court dismissed Milman’s FMLA claim, concluding that because she was not entitled to the leave she sought, she could not state a plausible claim. For the reasons that follow, we REVERSE and REMAND for further proceedings.
The case may be found here: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0014p-06.pdf
ERISA-Ninth Circuit Issues Rulings In A Class Action Alleging ERISA Violations (Posted 8/23/2023)
In Bugielski v. AT&T Serv., Inc., No. 21-56196 (9th Cir. Aug. 4, 2023), a panel for the Ninth Circuit Court of Appeals (the :Panel”) affirmed in part and reversed in part the district court’s summary judgment in favor of the defendants in an ERISA class action brought by former AT&T employees who contributed to AT&T’s retirement plan, a defined contribution plan.
Plaintiffs brought this class action against the Plan’s administrator, AT&T Services, Inc., and the committee responsible for some of the Plan’s investment-related duties, the AT&T Benefit Plan Investment Committee (collectively, “AT&T”). Plaintiffs alleged that AT&T failed to investigate and evaluate all the compensation that the Plan’s recordkeeper, Fidelity Workplace Services, received from mutual funds through BrokerageLink, Fidelity’s brokerage account platform, and from Financial Engines Advisors, L.L.C. Plaintiffs alleged that (1) AT&T’s failure to consider this compensation rendered its contract with Fidelity a “prohibited transaction” under ERISA § 406, (2) AT&T breached its fiduciary duty of prudence by failing to consider this compensation, and (3) AT&T breached its duty of candor by failing to disclose this compensation to the Department of Labor.
The Panel reversed the district court’s grant of summary judgment on the prohibited-transaction claim. Relying on the statutory text, regulatory text, and the Department of Labor’s Employee Benefits Security Administration’s explanation for a regulatory amendment, the panel held that the broad scope of § 406 encompasses arm’s-length transactions. Disagreeing with other circuits, the Panel concluded that AT&T, by amending its contract with Fidelity to incorporate the services of BrokerageLink and Financial Engines, caused the Plan to engage in a prohibited transaction. The panel remanded for the district court to consider whether AT&T met the requirements for an exemption from the prohibited-transaction bar because the contract was “reasonable,” the services were “necessary,” and no more than “reasonable compensation” was paid for the services. Specifically, the Panel remanded for the district court to consider whether Fidelity received no more than “reasonable compensation” from all sources, both direct and indirect, for the services it provided the Plan.
For similar reasons, the Panel also reversed the district court’s summary judgment on the duty-of-prudence claim. The Panel concluded that, as a fiduciary, AT&T was required to monitor the compensation that Fidelity received through BrokerageLink and Financial Engines. The Panel remanded for the district court to consider the duty-of prudence claim under the proper framework in the first instance.
On the reporting claim, the Panel affirmed as to the compensation from BrokerageLink and reversed as to the compensation from Financial Engines. The Panel concluded that AT&T adequately reported the compensation from Financial Engines on its Form 5500s with the Department of Labor, but it did not adequately report the compensation from Financial Engines because an alternative reporting method for “eligible indirect compensation” was not available.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/08/04/21-56196.pdf
In Bugielski v. AT&T Serv., Inc., No. 21-56196 (9th Cir. Aug. 4, 2023), a panel for the Ninth Circuit Court of Appeals (the :Panel”) affirmed in part and reversed in part the district court’s summary judgment in favor of the defendants in an ERISA class action brought by former AT&T employees who contributed to AT&T’s retirement plan, a defined contribution plan.
Plaintiffs brought this class action against the Plan’s administrator, AT&T Services, Inc., and the committee responsible for some of the Plan’s investment-related duties, the AT&T Benefit Plan Investment Committee (collectively, “AT&T”). Plaintiffs alleged that AT&T failed to investigate and evaluate all the compensation that the Plan’s recordkeeper, Fidelity Workplace Services, received from mutual funds through BrokerageLink, Fidelity’s brokerage account platform, and from Financial Engines Advisors, L.L.C. Plaintiffs alleged that (1) AT&T’s failure to consider this compensation rendered its contract with Fidelity a “prohibited transaction” under ERISA § 406, (2) AT&T breached its fiduciary duty of prudence by failing to consider this compensation, and (3) AT&T breached its duty of candor by failing to disclose this compensation to the Department of Labor.
The Panel reversed the district court’s grant of summary judgment on the prohibited-transaction claim. Relying on the statutory text, regulatory text, and the Department of Labor’s Employee Benefits Security Administration’s explanation for a regulatory amendment, the panel held that the broad scope of § 406 encompasses arm’s-length transactions. Disagreeing with other circuits, the Panel concluded that AT&T, by amending its contract with Fidelity to incorporate the services of BrokerageLink and Financial Engines, caused the Plan to engage in a prohibited transaction. The panel remanded for the district court to consider whether AT&T met the requirements for an exemption from the prohibited-transaction bar because the contract was “reasonable,” the services were “necessary,” and no more than “reasonable compensation” was paid for the services. Specifically, the Panel remanded for the district court to consider whether Fidelity received no more than “reasonable compensation” from all sources, both direct and indirect, for the services it provided the Plan.
For similar reasons, the Panel also reversed the district court’s summary judgment on the duty-of-prudence claim. The Panel concluded that, as a fiduciary, AT&T was required to monitor the compensation that Fidelity received through BrokerageLink and Financial Engines. The Panel remanded for the district court to consider the duty-of prudence claim under the proper framework in the first instance.
On the reporting claim, the Panel affirmed as to the compensation from BrokerageLink and reversed as to the compensation from Financial Engines. The Panel concluded that AT&T adequately reported the compensation from Financial Engines on its Form 5500s with the Department of Labor, but it did not adequately report the compensation from Financial Engines because an alternative reporting method for “eligible indirect compensation” was not available.
The case may be found here: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/08/04/21-56196.pdf
ERISA-Sixth Circuit Rules On Plaintiff’s ERISA Case Pertaining To Reimbursement Rights (Posted 8/22/2023)
In Patterson v. United Healthcare Insurance Co., No. 22-3167 (6th Cir. 8/1/2023), the Sixth Circuit Court of Appeals says the following:
Eric Patterson was injured in an auto accident. Patterson’s medical expenses were paid by his insurer, United. He also recovered for his injuries from the other driver. United claimed that Patterson’s insurance plan obliged him to pay those monies to United. Eventually, the parties settled the matter, with Patterson agreeing to pay the plan $25,000. Patterson later obtained a copy of the plan document, which contained no provision for reimbursement rights. So he filed suit against United and related entities under the Employee Retirement Income Security Act of 1974 (ERISA). The district court dismissed some of Patterson’s claims due to a lack of standing and the others because they failed to state a claim. We reverse in part and affirm in part.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca6/22-3167/22-3167-2023-08-01.pdf?ts=1690920104
In Patterson v. United Healthcare Insurance Co., No. 22-3167 (6th Cir. 8/1/2023), the Sixth Circuit Court of Appeals says the following:
Eric Patterson was injured in an auto accident. Patterson’s medical expenses were paid by his insurer, United. He also recovered for his injuries from the other driver. United claimed that Patterson’s insurance plan obliged him to pay those monies to United. Eventually, the parties settled the matter, with Patterson agreeing to pay the plan $25,000. Patterson later obtained a copy of the plan document, which contained no provision for reimbursement rights. So he filed suit against United and related entities under the Employee Retirement Income Security Act of 1974 (ERISA). The district court dismissed some of Patterson’s claims due to a lack of standing and the others because they failed to state a claim. We reverse in part and affirm in part.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca6/22-3167/22-3167-2023-08-01.pdf?ts=1690920104
Employee Benefits-IRS Issues Paperless Processing Initiative (Posted 8/21/2023)
According to the Initiative, Taxpayers will have the option to go paperless for IRS correspondence by 2024 filing season, IRS to achieve paperless processing for all tax returns by filing season 2025. IRS paperless processing initiative will eliminate up to 200 million pieces of paper annually, cut processing times in half, and expedite refunds by several weeks.
See the Initiative for details. It may be found here: https://www.irs.gov/newsroom/irs-launches-paperless-processing-initiative
According to the Initiative, Taxpayers will have the option to go paperless for IRS correspondence by 2024 filing season, IRS to achieve paperless processing for all tax returns by filing season 2025. IRS paperless processing initiative will eliminate up to 200 million pieces of paper annually, cut processing times in half, and expedite refunds by several weeks.
See the Initiative for details. It may be found here: https://www.irs.gov/newsroom/irs-launches-paperless-processing-initiative
ERISA-Eighth Circuit Overturns Summary Judgment Granted On Claim For Long-Term Disability Benefits (Posted 8/18/2023)
In Melissa McIntyre v. Reliance Standard Life, No. 22-1296 (8th Cir. 7/21/2023) the Eighth Circuit Court of Appeals says the following:
Melissa McIntyre sued Reliance Standard Life Insurance Company under 29 U.S.C. § 1132(a)(1)(B), seeking to recover long-term disability benefits. The district court granted McIntyre’s motion for summary judgment and denied Reliance’s cross-motion. Reliance appeals, and we reverse.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca8/22-1296/22-1296-2023-07-21.pdf?ts=1689953446
In Melissa McIntyre v. Reliance Standard Life, No. 22-1296 (8th Cir. 7/21/2023) the Eighth Circuit Court of Appeals says the following:
Melissa McIntyre sued Reliance Standard Life Insurance Company under 29 U.S.C. § 1132(a)(1)(B), seeking to recover long-term disability benefits. The district court granted McIntyre’s motion for summary judgment and denied Reliance’s cross-motion. Reliance appeals, and we reverse.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca8/22-1296/22-1296-2023-07-21.pdf?ts=1689953446
ERISA-Third Circuit Affirms District Court Granting ERISA Retaliation Claim (Posted 8/17/2023)
In Kairys v. Southern Pines Trucking, Inc., No. 22-1783 (3rd Cir. 7/25/2023), the Third Circuit Court of Appeals the says the following:
Southern Pines Trucking, Inc. (Southern Pines or the Company) appeals the District Court’s judgment for Thomas Kairys on his retaliation claim under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. Southern Pines also challenges the Court’s award of $111,981.79 in attorneys’ fees and costs. For the reasons that follow, we will affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca3/22-1783/22-1783-2023-07-25.pdf?ts=1690304461
In Kairys v. Southern Pines Trucking, Inc., No. 22-1783 (3rd Cir. 7/25/2023), the Third Circuit Court of Appeals the says the following:
Southern Pines Trucking, Inc. (Southern Pines or the Company) appeals the District Court’s judgment for Thomas Kairys on his retaliation claim under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. Southern Pines also challenges the Court’s award of $111,981.79 in attorneys’ fees and costs. For the reasons that follow, we will affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca3/22-1783/22-1783-2023-07-25.pdf?ts=1690304461
ERISA-Tenth Circuit Upholds District Court’s Decision To Denial Of Motion To Arbitrate ERISA Claims (Posted 8/16/2023)
In Harrison v. Envision Mgmt. Holding, Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023), the Tenth Circuit court of Appeals says the following:
Plaintiff Robert Harrison, a participant in a defined contribution retirement plan established by his former employer, filed suit under the Employee Retirement Income Security Act (ERISA) against the fiduciaries of the plan alleging that they breached their duties towards, and caused damages to, the plan. Harrison’s complaint sought various forms of relief, including a declaration that Defendants breached their fiduciary duties, the removal of the current plan trustee, the appointment of a new fiduciary to manage the plan, an order directing the current trustee to restore all losses to the plan that resulted from the fiduciary breaches, and an order directing Defendants to disgorge the profits they obtained from their fiduciary breaches. In response, Defendants moved to compel arbitration, citing a provision of the plan document. The district court denied that motion, concluding that enforcing the arbitration provision of the plan would prevent Harrison from effectively vindicating the statutory remedies sought in his complaint. Defendants now appeal from that ruling. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court’s decision.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110810667.pdf
In Harrison v. Envision Mgmt. Holding, Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023), the Tenth Circuit court of Appeals says the following:
Plaintiff Robert Harrison, a participant in a defined contribution retirement plan established by his former employer, filed suit under the Employee Retirement Income Security Act (ERISA) against the fiduciaries of the plan alleging that they breached their duties towards, and caused damages to, the plan. Harrison’s complaint sought various forms of relief, including a declaration that Defendants breached their fiduciary duties, the removal of the current plan trustee, the appointment of a new fiduciary to manage the plan, an order directing the current trustee to restore all losses to the plan that resulted from the fiduciary breaches, and an order directing Defendants to disgorge the profits they obtained from their fiduciary breaches. In response, Defendants moved to compel arbitration, citing a provision of the plan document. The district court denied that motion, concluding that enforcing the arbitration provision of the plan would prevent Harrison from effectively vindicating the statutory remedies sought in his complaint. Defendants now appeal from that ruling. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court’s decision.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110810667.pdf
Health Benefits-CMS Issues Letter To Employers, Plan Sponsors, and Issuers On Changes To Medicaid (Posted 8/15/2023)
See the Letter for details. It my be found here: https://www.cms.gov/files/document/esi-letter-final.pdf
See the Letter for details. It my be found here: https://www.cms.gov/files/document/esi-letter-final.pdf
ERISA-Seventh Circuit Upholds Denial Of Disability Benefits (Posted 8/14/2023)
In Lane v. Structural Iron Workers Local No. 1 Pension Trust Fund. No. 22-1149 (7th Cir. 7/17/2023), the Seventh Circuit Court of Appeals says the following:
Jeffery Lane was a union iron worker until a combination of injuries left him unable to carry on. Lane’s union established a trust fund to provide financial support to disabled members. Lane’s application for those benefits was denied. The Fund explained that Lane failed to connect his disability to an on-the-job injury, as the Fund’s governing documents required. Dissatisfied, Lane sought judicial review in federal district court, where he fared no better. Because the Fund’s decision was not downright unreasonable, we agree with the district court and affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca7/22-1149/22-1149-2023-07-17.pdf?ts=1689611487
In Lane v. Structural Iron Workers Local No. 1 Pension Trust Fund. No. 22-1149 (7th Cir. 7/17/2023), the Seventh Circuit Court of Appeals says the following:
Jeffery Lane was a union iron worker until a combination of injuries left him unable to carry on. Lane’s union established a trust fund to provide financial support to disabled members. Lane’s application for those benefits was denied. The Fund explained that Lane failed to connect his disability to an on-the-job injury, as the Fund’s governing documents required. Dissatisfied, Lane sought judicial review in federal district court, where he fared no better. Because the Fund’s decision was not downright unreasonable, we agree with the district court and affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca7/22-1149/22-1149-2023-07-17.pdf?ts=1689611487
ERISA-Fourth Circuit Faces Claim Of Violation Of ERISA Duties Of Loyalty And Prudence (Published 8/11/2023)
In Reetz v. Aon Hewitt Investment Consulting Inc., No. 21-2267 (4th Cir., July 17, 2023), the Fourth Circuit Court of Appeals says the following:
On behalf of a class, Benjamin Reetz sued Aon Hewitt Investment Consulting for investment advice given to Lowe’s Home Improvement to help manage its employees’ retirement plan. Aon, first as an investment consultant and later as a delegated fiduciary, owed the plan fiduciary duties under the Employee Retirement Income Security Act.
Reetz claims that Aon’s conduct violated the core duties of loyalty and prudence. First, the duty of loyalty. While Aon was Lowe’s investment consultant, it pitched its delegated-fiduciary services. Like it sounds, such services allow a fiduciary—here, the committee that runs Lowe’s plan—to outsource its duties to a third party. Reetz argues Aon’s sales efforts were self-motivated and thus violated the duty of loyalty. Also, around the same time, Aon recommended that Lowe’s streamline the investment menu it offered to plan participants. Reetz suggests that this advice was not solely motivated by the plan’s best interest, it was shaded by the desire to land the deal, so it was disloyal.
Second, the duty of prudence. After Lowe’s accepted the recommendation to streamline its investment menu and hired Aon as delegated fiduciary, Aon moved $1 billion in plan assets to a relatively untested investment fund that it created. The fund didn’t do so well. So Reetz alleges the fund selection and retention breached the duty of prudence. He argues that Aon did not seriously consider alternative funds when it invested the plan assets in the fund and did not properly monitor the fund once it was chosen.
After a five-day bench trial, the district court held that Aon, in fact, did not breach its fiduciary duties. Reetz appeals, but we affirm. To start, Aon’s sales efforts to obtain the delegated fiduciary work were not investment advice, so Aon owed no duty of loyalty. The investment-menu recommendation was investment advice, but we agree with the district court that Aon’s recommendation was not motivated by self-interest. And Reetz’s contention that Aon’s research conducted before it was Lowe’s delegated fiduciary could not discharge its duty of prudence also falls short. Aon engaged a reasoned decision making process by reviewing comparable funds. It makes no difference here that the review occurred when it established the fund (which was before Aon became Lowe’s delegated fiduciary). Plus, it continued to monitor the fund. So Aon did not violate the duty of prudence. We affirm.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-ca4-21-02267/pdf/USCOURTS-ca4-21-02267-0.pdf
In Reetz v. Aon Hewitt Investment Consulting Inc., No. 21-2267 (4th Cir., July 17, 2023), the Fourth Circuit Court of Appeals says the following:
On behalf of a class, Benjamin Reetz sued Aon Hewitt Investment Consulting for investment advice given to Lowe’s Home Improvement to help manage its employees’ retirement plan. Aon, first as an investment consultant and later as a delegated fiduciary, owed the plan fiduciary duties under the Employee Retirement Income Security Act.
Reetz claims that Aon’s conduct violated the core duties of loyalty and prudence. First, the duty of loyalty. While Aon was Lowe’s investment consultant, it pitched its delegated-fiduciary services. Like it sounds, such services allow a fiduciary—here, the committee that runs Lowe’s plan—to outsource its duties to a third party. Reetz argues Aon’s sales efforts were self-motivated and thus violated the duty of loyalty. Also, around the same time, Aon recommended that Lowe’s streamline the investment menu it offered to plan participants. Reetz suggests that this advice was not solely motivated by the plan’s best interest, it was shaded by the desire to land the deal, so it was disloyal.
Second, the duty of prudence. After Lowe’s accepted the recommendation to streamline its investment menu and hired Aon as delegated fiduciary, Aon moved $1 billion in plan assets to a relatively untested investment fund that it created. The fund didn’t do so well. So Reetz alleges the fund selection and retention breached the duty of prudence. He argues that Aon did not seriously consider alternative funds when it invested the plan assets in the fund and did not properly monitor the fund once it was chosen.
After a five-day bench trial, the district court held that Aon, in fact, did not breach its fiduciary duties. Reetz appeals, but we affirm. To start, Aon’s sales efforts to obtain the delegated fiduciary work were not investment advice, so Aon owed no duty of loyalty. The investment-menu recommendation was investment advice, but we agree with the district court that Aon’s recommendation was not motivated by self-interest. And Reetz’s contention that Aon’s research conducted before it was Lowe’s delegated fiduciary could not discharge its duty of prudence also falls short. Aon engaged a reasoned decision making process by reviewing comparable funds. It makes no difference here that the review occurred when it established the fund (which was before Aon became Lowe’s delegated fiduciary). Plus, it continued to monitor the fund. So Aon did not violate the duty of prudence. We affirm.
The case may be found here: https://www.govinfo.gov/content/pkg/USCOURTS-ca4-21-02267/pdf/USCOURTS-ca4-21-02267-0.pdf
Employee Benefits-IRS Issues Updated American Rescue Plan Act FAQs (Posted 8/10/2023)
See the updated FAQs for details. They may be found here: https://www.pbgc.gov/arp-faqs
See the updated FAQs for details. They may be found here: https://www.pbgc.gov/arp-faqs
ERISA- Third Circuit Upholds The Saving Plan’s Arbitration Provision (Posted 8/9/2023)
In Berkelhammer v. ADP TotalSource Grp., No. 22-1618 (3d Cir. Jul. 17, 2023), the Third Circuit Court of Appeals says the following:
Beth Berkelhammer and Naomi Ruiz participated in the ADP TotalSource Retirement Savings Plan ("Plan"), an investment portfolio managed by NFP Retirement, Inc. ("NFP"). Displeased with NFP's performance, they filed suit under § 502(a)(2) of the Employment Retirement Income Security Act of 1974 ("ERISA") not for their own losses, but derivatively on behalf of the Plan. The Plan's contract with NFP contained an agreement to arbitrate disputes between the two entities. Berkelhammer and Ruiz say that since they did not personally agree to arbitrate, the arbitration provision does not reach their claims. The District Court disagreed, holding that Berkelhammer and Ruiz stand in the Plan's contractual shoes and must accept the terms of the Plan's contract. We agree and will affirm.
The case may be found here: https://casetext.com/case/berkelhammer-v-adp-totalsource-grp
In Berkelhammer v. ADP TotalSource Grp., No. 22-1618 (3d Cir. Jul. 17, 2023), the Third Circuit Court of Appeals says the following:
Beth Berkelhammer and Naomi Ruiz participated in the ADP TotalSource Retirement Savings Plan ("Plan"), an investment portfolio managed by NFP Retirement, Inc. ("NFP"). Displeased with NFP's performance, they filed suit under § 502(a)(2) of the Employment Retirement Income Security Act of 1974 ("ERISA") not for their own losses, but derivatively on behalf of the Plan. The Plan's contract with NFP contained an agreement to arbitrate disputes between the two entities. Berkelhammer and Ruiz say that since they did not personally agree to arbitrate, the arbitration provision does not reach their claims. The District Court disagreed, holding that Berkelhammer and Ruiz stand in the Plan's contractual shoes and must accept the terms of the Plan's contract. We agree and will affirm.
The case may be found here: https://casetext.com/case/berkelhammer-v-adp-totalsource-grp
Employee Benefits-IRS Releases: Issue Snapshot — Deductibility Of Employer Contributions To A 401(k) Plan Made After The End Of The Tax Year (Posted 8/8/2023)
According to the IRS, the purpose of the Issue Snapshot is to discuss the timing rules of IRC sections 404(a)(6) and 415 and considers how these rules apply to employers who establish a new 401(k) plan after the end of the tax year.
See the Issue Snapshot for details. It may be found here: https://www.irs.gov/retirement-plans/issue-snapshot-deductibility-of-employer-contributions-to-a-401k-plan-made-after-the-end-of-the-tax-year
According to the IRS, the purpose of the Issue Snapshot is to discuss the timing rules of IRC sections 404(a)(6) and 415 and considers how these rules apply to employers who establish a new 401(k) plan after the end of the tax year.
See the Issue Snapshot for details. It may be found here: https://www.irs.gov/retirement-plans/issue-snapshot-deductibility-of-employer-contributions-to-a-401k-plan-made-after-the-end-of-the-tax-year
Employee Benefits-IRS Issues Notice 2023-54: Transition Relief and Guidance Relating to Certain Required Minimum Distributions (Posted 8/7/2023)
According to the IRS, this Notice has the following purpose:
This notice provides transition relief for plan administrators, payors, plan participants, IRA owners, and beneficiaries in connection with the change in the required beginning date for required minimum distributions (RMDs) under § 401(a)(9) of the Internal Revenue Code (Code) pursuant to § 107 of the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), enacted on December 29, 2022, as Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022). This notice also provides guidance related to certain specified RMDs for 2023. In addition, this notice announces that the final regulations that the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to issue related to RMDs will apply for purposes of determining RMDs for calendar years beginning no earlier than 2024.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-54.pdf
According to the IRS, this Notice has the following purpose:
This notice provides transition relief for plan administrators, payors, plan participants, IRA owners, and beneficiaries in connection with the change in the required beginning date for required minimum distributions (RMDs) under § 401(a)(9) of the Internal Revenue Code (Code) pursuant to § 107 of the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), enacted on December 29, 2022, as Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022). This notice also provides guidance related to certain specified RMDs for 2023. In addition, this notice announces that the final regulations that the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to issue related to RMDs will apply for purposes of determining RMDs for calendar years beginning no earlier than 2024.
See the Notice for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-54.pdf
Employee Benefits-Eleventh Circuit Rules On FMLA And ADA Claims (Posted 8/4/2023)
In Graves v. Brandstar, Inc., No. 21-13469 (11th Cir. May 9, 2023), the Eleventh Circuit Court of Appeals says the following:
Jessica Graves was dealt a tough hand when, in relatively quick succession, her father fell ill and she was let go from her position at Brandstar Studios. Following her termination, Graves sued Brandstar under the Family and Medical Leave Act and the Americans with Disabilities Act. The district court granted Brandstar summary judgment. Graves presents three arguments on appeal. First, she contends that Brandstar executives interfered with her rights under the FMLA. Second, she asserts that her termination constituted associational discrimination under the ADA. And finally, she claims that the district court improperly weighed the evidence on summary judgment rather than construing the facts in her favor. After careful review, we conclude that the district court properly granted summary judgment to Brandstar. We affirm.
The case may be found here: https://media.ca11.uscourts.gov/opinions/pub/files/202113469.pdf
In Graves v. Brandstar, Inc., No. 21-13469 (11th Cir. May 9, 2023), the Eleventh Circuit Court of Appeals says the following:
Jessica Graves was dealt a tough hand when, in relatively quick succession, her father fell ill and she was let go from her position at Brandstar Studios. Following her termination, Graves sued Brandstar under the Family and Medical Leave Act and the Americans with Disabilities Act. The district court granted Brandstar summary judgment. Graves presents three arguments on appeal. First, she contends that Brandstar executives interfered with her rights under the FMLA. Second, she asserts that her termination constituted associational discrimination under the ADA. And finally, she claims that the district court improperly weighed the evidence on summary judgment rather than construing the facts in her favor. After careful review, we conclude that the district court properly granted summary judgment to Brandstar. We affirm.
The case may be found here: https://media.ca11.uscourts.gov/opinions/pub/files/202113469.pdf
Employee Benefits-IRS Issues Publication 1586 : Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs on Information Returns (Posted 8/3/2023)
The IRS says the Publication has the following purpose:
This publication:
• Provides general information needed to avoid penalties under Internal Revenue Code (IRC) 6721 through IRC 6723 for information return documents that are filed or furnished with missing or incorrect taxpayer identification numbers (TINs).
• Describes the actions that must be taken, or should have been taken, to solicit (request) a TIN.
• Explains the requirements for establishing reasonable cause.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p1586.pdf
The IRS says the Publication has the following purpose:
This publication:
• Provides general information needed to avoid penalties under Internal Revenue Code (IRC) 6721 through IRC 6723 for information return documents that are filed or furnished with missing or incorrect taxpayer identification numbers (TINs).
• Describes the actions that must be taken, or should have been taken, to solicit (request) a TIN.
• Explains the requirements for establishing reasonable cause.
See the Publication for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p1586.pdf
Employee Benefits-PBGC Issues Final Regs On Benefit Payments and Allocation Of Assets (Posted 8/2/2023)
The PBGC summarizes the final regs as follows:
This final rule makes changes to PBGC’s regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans. The changes make clarifications and codify policies involving payment of lump sums, changes to benefit form, and valuation of plan assets. The final regs are effective 30 days after date of publication in the Federal Register.
See the final regs for details. They may be found here: https://public-inspection.federalregister.gov/2023-14349.pdf
The PBGC summarizes the final regs as follows:
This final rule makes changes to PBGC’s regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans. The changes make clarifications and codify policies involving payment of lump sums, changes to benefit form, and valuation of plan assets. The final regs are effective 30 days after date of publication in the Federal Register.
See the final regs for details. They may be found here: https://public-inspection.federalregister.gov/2023-14349.pdf
ERISA-Third Circuit Issues Ruling In An ERISA Case Claiming The Purchase Of Certain Stock By An ESOP Was A Breach Of Fiduciary Duty (8/1/2023)
In Henry v. Wilmington Trust NA, No. 21-2801 (3d Cir. June 30, 2023), the Third Circuit Court of Appeals says the following:
Marlow Henry participated in an employee stock ownership plan (“ESOP”) sponsored by his employer. After the ESOP purchased stock at what Henry believed was an inflated price, Henry filed a lawsuit against Wilmington Trust, N.A. (“Wilmington Trust”), the plan’s trustee, and Brian Sass and E. Stockton Croft, executives of his employer (collectively, the “defendants”). He alleged that the defendants breached their fiduciary duties to the ESOP imposed by the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., and engaged in transactions prohibited by ERISA. The defendants moved to dismiss. They contended that an arbitration provision, added to the ESOP’s plan documents after Henry joined the ESOP, barred Henry from pursuing his claims in federal court. The District Court denied the motion to dismiss. For the following reasons, we will affirm the judgment of the District Court.
The case may be found here: https://www2.ca3.uscourts.gov/opinarch/212801p.pdf
In Henry v. Wilmington Trust NA, No. 21-2801 (3d Cir. June 30, 2023), the Third Circuit Court of Appeals says the following:
Marlow Henry participated in an employee stock ownership plan (“ESOP”) sponsored by his employer. After the ESOP purchased stock at what Henry believed was an inflated price, Henry filed a lawsuit against Wilmington Trust, N.A. (“Wilmington Trust”), the plan’s trustee, and Brian Sass and E. Stockton Croft, executives of his employer (collectively, the “defendants”). He alleged that the defendants breached their fiduciary duties to the ESOP imposed by the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., and engaged in transactions prohibited by ERISA. The defendants moved to dismiss. They contended that an arbitration provision, added to the ESOP’s plan documents after Henry joined the ESOP, barred Henry from pursuing his claims in federal court. The District Court denied the motion to dismiss. For the following reasons, we will affirm the judgment of the District Court.
The case may be found here: https://www2.ca3.uscourts.gov/opinarch/212801p.pdf
ERISA-Fourth Circuit Affirms Denial Of Long-Term Disability Benefits (Posted 7/31/2023)
In Kevin Geiger v. Zurich American Insurance Company, No. 22-1519 (4th Cir. 6/28/2023), the Fourth Circuit Court of Appeals says the following:
Kevin Geiger sued Zurich American Life Insurance Company of New York∗ (“Zurich”) in district court challenging Zurich’s denial of long-term disability (“LTD”) benefits under the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1132(a)(1)(B). The parties cross-moved for judgment on the record, and the district court awarded judgment to Zurich. Geiger appeals. Because Zurich’s decision to deny benefits followed a principled reasoning process and was supported by substantial evidence, we affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/22-1519/22-1519-2023-06-28.pdf?ts=1687978885
In Kevin Geiger v. Zurich American Insurance Company, No. 22-1519 (4th Cir. 6/28/2023), the Fourth Circuit Court of Appeals says the following:
Kevin Geiger sued Zurich American Life Insurance Company of New York∗ (“Zurich”) in district court challenging Zurich’s denial of long-term disability (“LTD”) benefits under the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1132(a)(1)(B). The parties cross-moved for judgment on the record, and the district court awarded judgment to Zurich. Geiger appeals. Because Zurich’s decision to deny benefits followed a principled reasoning process and was supported by substantial evidence, we affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/22-1519/22-1519-2023-06-28.pdf?ts=1687978885
Employee Benefits-Fourth Circuit Rules On Claims That Termination Of Employment Violated Federal And State Law (Posted 7/28/2023)
In Adkins v. CSX Transportation, Inc., No. 21-2051 (4th Cir. June 16, 2023), the Fourth Circuit Court of Appeals says the following:
On June 16, 2017, CSX Transportation, Inc. (“CSXT”) issued furlough notices to employees at its facility in Huntington, West Virginia. Over the course of the weeks following the issuance of those notices, over 65 employees submitted forms requesting to take medical leave based on claimed minor soft-tissue injuries sustained while off duty. The forms were similar in content; all were signed by one of two chiropractors; and all called for medical leave of eight weeks or more. Under CSXT’s benefit plans, if an employee were furloughed while on medical leave, the employee would receive health and welfare benefits for up to two years. Otherwise, a furloughed employee would receive such benefits for only four months.
Suspecting benefits fraud, CSXT charged the employees with violating its workplace rule against dishonesty and, following hearings, terminated their employment.
In response to their termination, 58 employees commenced this action against CSXT and its involved employees (collectively hereafter, “CSXT”), alleging, in ten counts, violations of their rights under federal and state law, including, as relevant here, violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Rehabilitation Act of 1973, the West Virginia Human Rights Act, and the Family and Medical Leave Act of 1993 (“FMLA”). The plaintiffs alleged that CSXT discriminated and retaliated against them for seeking medical leave and also interfered with their rights under the FMLA. Following discovery, the district court granted CSXT summary judgment on all claims.
With respect to the plaintiffs’ discrimination and retaliation claims, we conclude that CSXT provided a legitimate, nondiscriminatory reason for terminating the plaintiffs and that the plaintiffs failed to present evidence to create a genuine issue of material fact as to whether the reason was pretextual. And with respect to the plaintiffs’ FMLA interference claim, we find that the plaintiffs failed to present any evidence of prejudice. Accordingly, we affirm.
The case may be found here: https://benefitslink.com/src/ctop/adkins-v-csx-4thcir-06162023.pdf
In Adkins v. CSX Transportation, Inc., No. 21-2051 (4th Cir. June 16, 2023), the Fourth Circuit Court of Appeals says the following:
On June 16, 2017, CSX Transportation, Inc. (“CSXT”) issued furlough notices to employees at its facility in Huntington, West Virginia. Over the course of the weeks following the issuance of those notices, over 65 employees submitted forms requesting to take medical leave based on claimed minor soft-tissue injuries sustained while off duty. The forms were similar in content; all were signed by one of two chiropractors; and all called for medical leave of eight weeks or more. Under CSXT’s benefit plans, if an employee were furloughed while on medical leave, the employee would receive health and welfare benefits for up to two years. Otherwise, a furloughed employee would receive such benefits for only four months.
Suspecting benefits fraud, CSXT charged the employees with violating its workplace rule against dishonesty and, following hearings, terminated their employment.
In response to their termination, 58 employees commenced this action against CSXT and its involved employees (collectively hereafter, “CSXT”), alleging, in ten counts, violations of their rights under federal and state law, including, as relevant here, violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Rehabilitation Act of 1973, the West Virginia Human Rights Act, and the Family and Medical Leave Act of 1993 (“FMLA”). The plaintiffs alleged that CSXT discriminated and retaliated against them for seeking medical leave and also interfered with their rights under the FMLA. Following discovery, the district court granted CSXT summary judgment on all claims.
With respect to the plaintiffs’ discrimination and retaliation claims, we conclude that CSXT provided a legitimate, nondiscriminatory reason for terminating the plaintiffs and that the plaintiffs failed to present evidence to create a genuine issue of material fact as to whether the reason was pretextual. And with respect to the plaintiffs’ FMLA interference claim, we find that the plaintiffs failed to present any evidence of prejudice. Accordingly, we affirm.
The case may be found here: https://benefitslink.com/src/ctop/adkins-v-csx-4thcir-06162023.pdf
ERISA-District Court Rules On Matters Pertaining To Long-Term Disability Benefits (Posted 7/27/2023)
In Hammer v. JP Morgan Chase Long-Term Disability Benefit Plan, No. 22-6886 (N.D. Cal. June 16, 2023), the District Court says the following:
This is an employee-benefits dispute over the long-term disability benefits that were paid to Kenneth Morrison, a deceased former Vice President of JP Morgan Chase. Mr. Morrison, who worked in New York City and lived in Connecticut, became permanently disabled when he was struck by a taxi in 1995. From then until his 2022 death, he was paid benefits under Chase’s long-term disability plan for its employees. Plaintiff Anthony Hamer, who now lives in San Francisco, was Mr. Morrison’s supervisor at Chase and is the successor trustee of Mr. Morrison’s trust and the co-conservator of his estate. Mr. Hamer alleges that the defendants — the JP Morgan Chase, N.A. Long Term Disability Benefit Plan, JP Morgan Chase, N.A. (the plan sponsor), and Prudential Insurance Company of America (the plan administrator) — underpaid the benefits due to Mr. Morrison (because they underreported his base salary at the time of his injury) and failed to follow a proper claims-handling process (mainly by failing to maintain the relevant documents from the 1990s). There are six claims for violations of the Employee Retirement Income Security Act (ERISA): two for monetary relief and four alternative claims for equitable relief (such as changed claims-handling procedures).
The defendants moved to dismiss the alternative claims for equitable relief under Federal Rules of Civil Procedure 12(b)(1) (for lack of standing) and 12(b)(6) (on the ground that the claims are time-barred and foreclosed because monetary relief is available). The defendants also moved to transfer the case to the District of Connecticut as a more convenient venue under 28 U.S.C. § 1404(a), on the ground that all relevant events happened there. The court grants the motion to transfer venue and declines to decide the motion to dismiss.
The case may be found here: https://benefitslink.com/src/ctop/hames-v-chase-ltd-ndcal-06162023.pdf
In Hammer v. JP Morgan Chase Long-Term Disability Benefit Plan, No. 22-6886 (N.D. Cal. June 16, 2023), the District Court says the following:
This is an employee-benefits dispute over the long-term disability benefits that were paid to Kenneth Morrison, a deceased former Vice President of JP Morgan Chase. Mr. Morrison, who worked in New York City and lived in Connecticut, became permanently disabled when he was struck by a taxi in 1995. From then until his 2022 death, he was paid benefits under Chase’s long-term disability plan for its employees. Plaintiff Anthony Hamer, who now lives in San Francisco, was Mr. Morrison’s supervisor at Chase and is the successor trustee of Mr. Morrison’s trust and the co-conservator of his estate. Mr. Hamer alleges that the defendants — the JP Morgan Chase, N.A. Long Term Disability Benefit Plan, JP Morgan Chase, N.A. (the plan sponsor), and Prudential Insurance Company of America (the plan administrator) — underpaid the benefits due to Mr. Morrison (because they underreported his base salary at the time of his injury) and failed to follow a proper claims-handling process (mainly by failing to maintain the relevant documents from the 1990s). There are six claims for violations of the Employee Retirement Income Security Act (ERISA): two for monetary relief and four alternative claims for equitable relief (such as changed claims-handling procedures).
The defendants moved to dismiss the alternative claims for equitable relief under Federal Rules of Civil Procedure 12(b)(1) (for lack of standing) and 12(b)(6) (on the ground that the claims are time-barred and foreclosed because monetary relief is available). The defendants also moved to transfer the case to the District of Connecticut as a more convenient venue under 28 U.S.C. § 1404(a), on the ground that all relevant events happened there. The court grants the motion to transfer venue and declines to decide the motion to dismiss.
The case may be found here: https://benefitslink.com/src/ctop/hames-v-chase-ltd-ndcal-06162023.pdf
Employee Benefits-Sixth Circuit Affirms Award Of Long-Term Disability Benefits Extending Beyond 24 Months (Posted 7/26/2023)
In Laake v. Benefits Committee, Western & Southern Fin. Group Flexible Benefits Plan, Nos. 22-3182, 21-4178 (6th Cir. May 19, 2023), the Sixth Circuit Court of Appeals says the following:
Western & Southern Financial Group Flexible Benefits Plan (the “Plan”) and the Benefits Committee of the Plan (together referred to as “W&S”) appeal the district court’s 2019 remand order and 2022 judgment in favor of Western & Southern Financial Group’s former employee, Sherry Laake. While W&S asserts several challenges on appeal, the central issue throughout the course of this litigation is whether Laake qualifies for long-term disability (“LTD”) benefits extending beyond 24 months pursuant to the terms of the Plan—an employee welfare benefit plan as defined under the Employee Retirement Income Security Act of 1974 (“ERISA”). The district court determined that she does, and it imposed penalties against W&S and awarded Laake attorney’s fees and costs. We AFFIRM.
The case may be found here: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0107p-06.pdf
In Laake v. Benefits Committee, Western & Southern Fin. Group Flexible Benefits Plan, Nos. 22-3182, 21-4178 (6th Cir. May 19, 2023), the Sixth Circuit Court of Appeals says the following:
Western & Southern Financial Group Flexible Benefits Plan (the “Plan”) and the Benefits Committee of the Plan (together referred to as “W&S”) appeal the district court’s 2019 remand order and 2022 judgment in favor of Western & Southern Financial Group’s former employee, Sherry Laake. While W&S asserts several challenges on appeal, the central issue throughout the course of this litigation is whether Laake qualifies for long-term disability (“LTD”) benefits extending beyond 24 months pursuant to the terms of the Plan—an employee welfare benefit plan as defined under the Employee Retirement Income Security Act of 1974 (“ERISA”). The district court determined that she does, and it imposed penalties against W&S and awarded Laake attorney’s fees and costs. We AFFIRM.
The case may be found here: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0107p-06.pdf
Health Benefits-IRS Issues Notice On Expenses Related To COVID-19 And Preventive Care For Purposes Of High Deductible Health Plans (Posted 7/25/2023)
According to the IRS, Notice 2023-37 has the following purpose:
In response to the end of the Coronavirus Disease 2019 (COVID-19) public health emergency (referred to in this document as the PHE) and the National Emergency Concerning the Novel Coronavirus Disease 2019 Pandemic (referred to in this document as the COVID-19 National Emergency), this notice modifies prior guidance regarding benefits relating to testing for and treatment of COVID-19 that can be provided by a health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code). Specifically, this notice provides that the relief described in Notice 2020-15, 2020-14 IRB 559, applies only with respect to plan years ending on or before December 31, 2024.
This notice also clarifies whether certain items and services are treated as preventive care under section 223(c)(2)(C). Specifically, this notice clarifies that the preventive care safe harbor, as described in Notice 2004-23, 2004-15 IRB 725, does not include screening (i.e., testing) for COVID-19, effective as of the date of publication of this notice. This notice also provides that items and services recommended with an “A” or “B” rating by the United States Preventive Services Task Force (USPSTF) on or after March 23, 2010, are treated as preventive care for purposes of section 223(c)(2)(C), regardless of whether these items and services must be covered, without cost sharing, under Public Health Service Act (PHS Act) section 2713.
See Notice 2023-37 for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-37.pdf
According to the IRS, Notice 2023-37 has the following purpose:
In response to the end of the Coronavirus Disease 2019 (COVID-19) public health emergency (referred to in this document as the PHE) and the National Emergency Concerning the Novel Coronavirus Disease 2019 Pandemic (referred to in this document as the COVID-19 National Emergency), this notice modifies prior guidance regarding benefits relating to testing for and treatment of COVID-19 that can be provided by a health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code). Specifically, this notice provides that the relief described in Notice 2020-15, 2020-14 IRB 559, applies only with respect to plan years ending on or before December 31, 2024.
This notice also clarifies whether certain items and services are treated as preventive care under section 223(c)(2)(C). Specifically, this notice clarifies that the preventive care safe harbor, as described in Notice 2004-23, 2004-15 IRB 725, does not include screening (i.e., testing) for COVID-19, effective as of the date of publication of this notice. This notice also provides that items and services recommended with an “A” or “B” rating by the United States Preventive Services Task Force (USPSTF) on or after March 23, 2010, are treated as preventive care for purposes of section 223(c)(2)(C), regardless of whether these items and services must be covered, without cost sharing, under Public Health Service Act (PHS Act) section 2713.
See Notice 2023-37 for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-37.pdf
Employee Benefits-Eleventh Circuit Affirms Grant Of Additional Holiday Pay And Accrued Benefits For Service As Military Reservists (Posted 7/24/2023)
In Myrick v. City of Hoover, Alabama, No. 22-11621 (11th Cir. Jun. 8, 2023), the Eleventh Circuit Court of Appeals says the following:
Thaddaeus Myrick, Nicholas Braden, Jessie Popee, and Kenneth Fountain (collectively, the Officers) worked as police officers for the City of Hoover, Alabama. They also served as military reservists. Over a two-decade span, the Officers were summoned to active-duty service a combined thirteen times. While away, Hoover did not provide the Officers the same holiday pay and accrued benefits that it gave employees on paid administrative leave. This disparate treatment prompted the Officers to sue Hoover under USERRA. And it led the district court to grant summary judgment for the Officers.
Hoover asks us to reverse the district court’s judgment for two reasons. First, Hoover argues that the Officers are not similar to employees placed on paid administrative leave. Second, Hoover asserts that military leave is not comparable to paid administrative leave. We disagree on both points. Therefore, we affirm.
The case may be found here: https://media.ca11.uscourts.gov/opinions/pub/files/202211621.pdf
In Myrick v. City of Hoover, Alabama, No. 22-11621 (11th Cir. Jun. 8, 2023), the Eleventh Circuit Court of Appeals says the following:
Thaddaeus Myrick, Nicholas Braden, Jessie Popee, and Kenneth Fountain (collectively, the Officers) worked as police officers for the City of Hoover, Alabama. They also served as military reservists. Over a two-decade span, the Officers were summoned to active-duty service a combined thirteen times. While away, Hoover did not provide the Officers the same holiday pay and accrued benefits that it gave employees on paid administrative leave. This disparate treatment prompted the Officers to sue Hoover under USERRA. And it led the district court to grant summary judgment for the Officers.
Hoover asks us to reverse the district court’s judgment for two reasons. First, Hoover argues that the Officers are not similar to employees placed on paid administrative leave. Second, Hoover asserts that military leave is not comparable to paid administrative leave. We disagree on both points. Therefore, we affirm.
The case may be found here: https://media.ca11.uscourts.gov/opinions/pub/files/202211621.pdf
ERISA-Tenth Circuit Affirms Rejection Of Claim For Long-Term Disability Benefits (Posted 7/21/2023)
In Easter v. Hartford Life and Accident Ins. Co., No. 21-4106 (10th Cir. June 14, 2023) ( Unpublished), the Tenth Circuit Court of Appeals says the following:
Audrey Easter, a former social worker at Intermountain Health Care, Inc., submitted a claim for long-term disability benefits under a Group Long-Term Disability Benefit Plan (the “Plan”), which was insured by Hartford Life and Accident Insurance Company (“Hartford”). After her long-term disability (“LTD”) claim was denied, Ms. Easter brought this Employee Retirement Income Security Act (ERISA) suit seeking review of Hartford’s decision.
Specifically, Ms. Easter alleged that Hartford’s denial of her disability claim was not adequately supported by the evidence. Furthermore, she claimed that Hartford’s decision was procedurally flawed and therefore was not entitled to any deference by the district court. The district court rejected Ms. Easter’s arguments, determined that the denial of coverage was not arbitrary and capricious, and granted summary judgment to Hartford. Ms. Easter now appeals from the district court’s judgment. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110873287.pdf
In Easter v. Hartford Life and Accident Ins. Co., No. 21-4106 (10th Cir. June 14, 2023) ( Unpublished), the Tenth Circuit Court of Appeals says the following:
Audrey Easter, a former social worker at Intermountain Health Care, Inc., submitted a claim for long-term disability benefits under a Group Long-Term Disability Benefit Plan (the “Plan”), which was insured by Hartford Life and Accident Insurance Company (“Hartford”). After her long-term disability (“LTD”) claim was denied, Ms. Easter brought this Employee Retirement Income Security Act (ERISA) suit seeking review of Hartford’s decision.
Specifically, Ms. Easter alleged that Hartford’s denial of her disability claim was not adequately supported by the evidence. Furthermore, she claimed that Hartford’s decision was procedurally flawed and therefore was not entitled to any deference by the district court. The district court rejected Ms. Easter’s arguments, determined that the denial of coverage was not arbitrary and capricious, and granted summary judgment to Hartford. Ms. Easter now appeals from the district court’s judgment. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110873287.pdf
Employee Benefits-CMS Issues Bulletin On Sunset of MHPAEA Opt-out Provision For Self-funded, Non-Federal Governmental Group Health Plans (Posted 7/20/2023)
According to the CMS, the purpose of the Bulletin is the following:
The Consolidated Appropriations Act, 2023 (CAA, 2023), enacted on December 29, 2022, includes a sunset provision for the self-funded, non-Federal governmental group health plan election under section 2722(a)(2) of the Public Health Service Act (PHS Act) to opt out of compliance with the requirements of PHS Act section 2726, the Mental Health Parity and Addiction Equity Act (MHPAEA). This Bulletin describes the amendments made by the CAA, 2023 to the opt-out provision and explains when self-funded, non-Federal governmental group health plans that currently opt out of compliance with MHPAEA are required to come into compliance with these requirements.
See the Bulletin for details. It may be found at: https://www.cms.gov/files/document/hipaa-opt-out-bulletin.pdf
According to the CMS, the purpose of the Bulletin is the following:
The Consolidated Appropriations Act, 2023 (CAA, 2023), enacted on December 29, 2022, includes a sunset provision for the self-funded, non-Federal governmental group health plan election under section 2722(a)(2) of the Public Health Service Act (PHS Act) to opt out of compliance with the requirements of PHS Act section 2726, the Mental Health Parity and Addiction Equity Act (MHPAEA). This Bulletin describes the amendments made by the CAA, 2023 to the opt-out provision and explains when self-funded, non-Federal governmental group health plans that currently opt out of compliance with MHPAEA are required to come into compliance with these requirements.
See the Bulletin for details. It may be found at: https://www.cms.gov/files/document/hipaa-opt-out-bulletin.pdf
Employee Benefits-PBGC Issues Agency Rule List-Listing Projects For Spring 2023 (Posted 7/19/2023))
See the List for details. It may be found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPubId=202304&showStage=active&agencyCd=1212
Employee Benefits-DOL Issues Agency Rule List- Listing Projects For Spring 2023 (7/19/2023)
See the List for details. It may be found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPubId=202304&showStage=active&agencyCd=1200
Employee Benefits-IRS Issues Agency Rule List- Listing Projects For Spring 2023 (7/19/2023)
See the list for details. It may be found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPubId=202304&showStage=active&agencyCd=1500
See the List for details. It may be found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPubId=202304&showStage=active&agencyCd=1212
Employee Benefits-DOL Issues Agency Rule List- Listing Projects For Spring 2023 (7/19/2023)
See the List for details. It may be found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPubId=202304&showStage=active&agencyCd=1200
Employee Benefits-IRS Issues Agency Rule List- Listing Projects For Spring 2023 (7/19/2023)
See the list for details. It may be found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPubId=202304&showStage=active&agencyCd=1500
Employee Benefits-IRS Issues Memorandum On Tax Treatment of Employer-Funded, Insured, Fixed-Indemnity Wellness Policy (Posted 7/18/2023)
Memorandum Number: 202323006 raises the following issues:
Whether wellness indemnity payments under an employer-funded, fixed indemnity insurance policy (including where the premium for the coverage is paid by employee salary reduction through a cafeteria plan under section 125 of the Internal Revenue Code (Code)) are includible in the gross income of the employee if the employee has no unreimbursed medical expenses related to the payment.
Whether the wellness indemnity benefits that are includible in gross income (taxable wellness indemnity benefits) are wages for purposes of Federal Insurance Contributions Act (FICA) taxes, Federal Unemployment Tax Act (FUTA) taxes, and federal income tax withholding (FITW) (collectively, “employment taxes”) with respect to the payments of benefits in the situation described below.
See the Memorandum for the discussion of these issues. It may be found at: https://www.irs.gov/pub/irs-wd/202323006.pdf
Memorandum Number: 202323006 raises the following issues:
Whether wellness indemnity payments under an employer-funded, fixed indemnity insurance policy (including where the premium for the coverage is paid by employee salary reduction through a cafeteria plan under section 125 of the Internal Revenue Code (Code)) are includible in the gross income of the employee if the employee has no unreimbursed medical expenses related to the payment.
Whether the wellness indemnity benefits that are includible in gross income (taxable wellness indemnity benefits) are wages for purposes of Federal Insurance Contributions Act (FICA) taxes, Federal Unemployment Tax Act (FUTA) taxes, and federal income tax withholding (FITW) (collectively, “employment taxes”) with respect to the payments of benefits in the situation described below.
See the Memorandum for the discussion of these issues. It may be found at: https://www.irs.gov/pub/irs-wd/202323006.pdf
ERISA-Eighth Circuit Upholds Denial Of Health Insurance Benefits For Surgery (Posted 7/17/23)
In Darrin Shafer v. Zimmerman Transfer, Inc., No. 22-2275 (8th Cir. 6/7/2023), the Eighth Circuit Court of Appeals says the following:
Darrin Shafer appeals the district court’s grant of summary judgment to Zimmerman Transfer, Inc. and Benefit Plan Administrators of Eau Claire, LLC (“BPA”) on his claim for health insurance benefits under ERISA. See 29 U.S.C. § 1132(a)(1)(B). We affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca8/22-2275/22-2275-2023-06-07.pdf?ts=1686150073
In Darrin Shafer v. Zimmerman Transfer, Inc., No. 22-2275 (8th Cir. 6/7/2023), the Eighth Circuit Court of Appeals says the following:
Darrin Shafer appeals the district court’s grant of summary judgment to Zimmerman Transfer, Inc. and Benefit Plan Administrators of Eau Claire, LLC (“BPA”) on his claim for health insurance benefits under ERISA. See 29 U.S.C. § 1132(a)(1)(B). We affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca8/22-2275/22-2275-2023-06-07.pdf?ts=1686150073
ERISA-District Court Sustain Claims For Breach Of Fiduciary Duty (Posted 7/14/2023)
In Tolomeo v. R.R. Donnelley & Sons, Inc., No. 20-7158 (N.D. Ill. May 15, 2023), the District Court says the following:
Plaintiffs Michael Tolomeo and Serafin Chavez bring this action under the Employee Retirement Income Security Act of 1974 (“ERISA”), individually and as representatives of a class of participants and beneficiaries of the R.R. Donnelley Savings Plan, against R.R. Donnelley & Sons, its Board of Directors, and its Benefits Committee (collectively, “Defendants”) for violations under the Employee Retirement Income Security Act of 1974 (“ERISA”). Count I alleges that Defendants breached their fiduciary duty of prudence by allowing the Savings Plan to pay excessive recordkeeping fees. Count II alleges that R.R. Donnelley and its Board of Directors breached their duty to monitor. Defendants move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). [54]. For the reasons stated herein, Defendants' motion to dismiss is denied.
The case may be found at: https://casetext.com/case/tolomeo-v-rr-donnelley-sons-inc
In Tolomeo v. R.R. Donnelley & Sons, Inc., No. 20-7158 (N.D. Ill. May 15, 2023), the District Court says the following:
Plaintiffs Michael Tolomeo and Serafin Chavez bring this action under the Employee Retirement Income Security Act of 1974 (“ERISA”), individually and as representatives of a class of participants and beneficiaries of the R.R. Donnelley Savings Plan, against R.R. Donnelley & Sons, its Board of Directors, and its Benefits Committee (collectively, “Defendants”) for violations under the Employee Retirement Income Security Act of 1974 (“ERISA”). Count I alleges that Defendants breached their fiduciary duty of prudence by allowing the Savings Plan to pay excessive recordkeeping fees. Count II alleges that R.R. Donnelley and its Board of Directors breached their duty to monitor. Defendants move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). [54]. For the reasons stated herein, Defendants' motion to dismiss is denied.
The case may be found at: https://casetext.com/case/tolomeo-v-rr-donnelley-sons-inc
Employee Benefits-Denies Claim for Disability Benefits (Posted 7/13/2023)
In Tranbarger v. Lincoln Life & Annuity Co. of New York, No. 22-3369 (6th Cir. May 18, 2023), the Sixth Circuit Court of Appeals says the following:
Vickie Tranbarger’s quality of life declined precipitously after a routine surgery. She later left her job and claimed disability benefits, which her insurer denied. Tranbarger challenged that decision in district court. Resolution of the case turned on Tranbarger’s ability to demonstrate complete and continuous disability during the six months following her resignation. After reviewing the administrative record, the district court concluded that Tranbarger failed to prove as much. Accordingly, the court granted judgment to the insurer. We now affirm.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0104p-06.pdf
In Tranbarger v. Lincoln Life & Annuity Co. of New York, No. 22-3369 (6th Cir. May 18, 2023), the Sixth Circuit Court of Appeals says the following:
Vickie Tranbarger’s quality of life declined precipitously after a routine surgery. She later left her job and claimed disability benefits, which her insurer denied. Tranbarger challenged that decision in district court. Resolution of the case turned on Tranbarger’s ability to demonstrate complete and continuous disability during the six months following her resignation. After reviewing the administrative record, the district court concluded that Tranbarger failed to prove as much. Accordingly, the court granted judgment to the insurer. We now affirm.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0104p-06.pdf
Employee Benefits-IRS Issues Updated Instructions for Form 5316, Application for Group or Pooled Trust Ruling (Posted 7/12/2023)
Here is What’s New in the Instructions:
The form and instructions have been updated so that Form 5316 can be completed on Pay.gov as of June 1, 2023.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-pdf/i5316.pdf
Here is What’s New in the Instructions:
The form and instructions have been updated so that Form 5316 can be completed on Pay.gov as of June 1, 2023.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-pdf/i5316.pdf
Employee Benefits-IRS Issues Updated Instructions For Form 5300, Application for Determination for Employee Benefit Plan (Posted 7/11/2023)
Here is What' New in the Instructions:
The form and instructions have been updated to include individually designed 403(b) plans.
Note: Rev. Proc. 2023-4 contains the guidance under which the Determination Letter (DL) program is administered. The revenue procedure is updated annually and can be found in the Internal Revenue Bulletin (I.R.B.). The application should be filed under Rev. Proc. 2022-40, 2022-47 I.R.B. 487 (with respect to individually designed plans), available at IRS.gov/irb/ 2022-47_IRB#RP=2022-40 or Part III of Rev. Proc. 2016–37, 2016–29, I.R.B. 136 (with respect to pre-approved plans), available at IRS.gov/irb/ 2016-29_IRB#RP-2016-37.
Review these documents before completing the application.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-prior/i5300--2023.pdf
Here is What' New in the Instructions:
The form and instructions have been updated to include individually designed 403(b) plans.
Note: Rev. Proc. 2023-4 contains the guidance under which the Determination Letter (DL) program is administered. The revenue procedure is updated annually and can be found in the Internal Revenue Bulletin (I.R.B.). The application should be filed under Rev. Proc. 2022-40, 2022-47 I.R.B. 487 (with respect to individually designed plans), available at IRS.gov/irb/ 2022-47_IRB#RP=2022-40 or Part III of Rev. Proc. 2016–37, 2016–29, I.R.B. 136 (with respect to pre-approved plans), available at IRS.gov/irb/ 2016-29_IRB#RP-2016-37.
Review these documents before completing the application.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-prior/i5300--2023.pdf
Employee Benefits-IRS Issues Updated Instruction For Form 5310, Application For Determination For Terminating Of Plan (Posted 7/10/2023)
Here is What’s New in the Instructions:
The form and the instructions have been updated to include 403(b) plans.
Note: Rev. Proc. 2023-4 contains the guidance under which the determination letter (DL) program is administered. The Rev. Proc. is updated annually and can be found in the Internal Revenue Bulletin (I.R.B.). The application should be filed under Rev. Proc. 2022-40, 2022-47 I.R.B. 487 (with respect to individually designed plans), available at IRS.gov/irb/2022-47_IRB#RP-2022-40, or Part III of Rev. Proc. 2016-37, 2016-29 I.R.B. 136 (with respect to pre-approved plans), available at IRS.gov/irb/ 2016-29_IRB#RP-2016-37.
Review these documents before completing the application.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-prior/i5310--2023.pdf
Here is What’s New in the Instructions:
The form and the instructions have been updated to include 403(b) plans.
Note: Rev. Proc. 2023-4 contains the guidance under which the determination letter (DL) program is administered. The Rev. Proc. is updated annually and can be found in the Internal Revenue Bulletin (I.R.B.). The application should be filed under Rev. Proc. 2022-40, 2022-47 I.R.B. 487 (with respect to individually designed plans), available at IRS.gov/irb/2022-47_IRB#RP-2022-40, or Part III of Rev. Proc. 2016-37, 2016-29 I.R.B. 136 (with respect to pre-approved plans), available at IRS.gov/irb/ 2016-29_IRB#RP-2016-37.
Review these documents before completing the application.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-prior/i5310--2023.pdf
Employee Benefits-Fifth Circuit Upholds District Court’s Grant Of Health Coverage For Proton Beam Therapy For Throat Cancer (Posted 7/7/2023)
In Salim v. Louisiana Health Service and Indemnity Co., No. 22-30573 (5th Cir. 5/3/2023) (Unpublished), the Fifth Circuit Court of Appeals says the following:
Robert Salim purchased health insurance from the Louisiana Health Service & Indemnity Company (“Blue Cross”). Salim later sought coverage for proton beam therapy to treat his throat cancer. Citing an internal guideline, Blue Cross denied coverage, deeming proton therapy not medically necessary. Salim sued, arguing that the guideline relied on a third-party source that had since been updated to specifically approve proton therapy for exactly his condition. The district court held that the denial was an abuse of discretion, and it ordered Blue Cross to provide coverage. We AFFIRM.
The case may be found at: https://www.ca5.uscourts.gov/opinions/unpub/22/22-30573.0.pdf
In Salim v. Louisiana Health Service and Indemnity Co., No. 22-30573 (5th Cir. 5/3/2023) (Unpublished), the Fifth Circuit Court of Appeals says the following:
Robert Salim purchased health insurance from the Louisiana Health Service & Indemnity Company (“Blue Cross”). Salim later sought coverage for proton beam therapy to treat his throat cancer. Citing an internal guideline, Blue Cross denied coverage, deeming proton therapy not medically necessary. Salim sued, arguing that the guideline relied on a third-party source that had since been updated to specifically approve proton therapy for exactly his condition. The district court held that the denial was an abuse of discretion, and it ordered Blue Cross to provide coverage. We AFFIRM.
The case may be found at: https://www.ca5.uscourts.gov/opinions/unpub/22/22-30573.0.pdf
Employee Benefits-DOL Issues Opinion Letter Dealing With The FMLA (Posted 7/6/2023)
DOL Opinion Letter FMLA2023-2-A concerns how to calculate the amount of leave used when an employee takes leave under the Family and Medical Leave Act (FMLA) during a week with a holiday.
See the Opinion Letter for details. It may be found at: https://www.dol.gov/sites/dolgov/files/WHD/opinion-letters/FMLA/2023_05_30_02_FMLA.pdf
DOL Opinion Letter FMLA2023-2-A concerns how to calculate the amount of leave used when an employee takes leave under the Family and Medical Leave Act (FMLA) during a week with a holiday.
See the Opinion Letter for details. It may be found at: https://www.dol.gov/sites/dolgov/files/WHD/opinion-letters/FMLA/2023_05_30_02_FMLA.pdf
ERISA-District Court Rules That Plaintiff Has Made Out A Case For Breach Of Fiduciary Duty (Posted 7/5/2023)
In Mazza v, Pactiv Evergreen Services Inc., No. 22-05052 (N.D. Ill. May 18, 2023), the District Court says the following:
Plaintiff Michael Mazza, a former participant in the Pactiv Evergreen Services Inc. Employee Savings Plan (the “Plan”) that Defendant Pactiv Evergreen Services Inc. (“Pactiv”) sponsors,filed this purported class action lawsuit under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., against Pactiv and its Board of Directors (the “Director Defendants”). In his amended complaint, Mazza complains that Defendants breached their fiduciary duty of prudence by causing Plan participants to pay excessive recordkeeping and administrative (“RKA”) fees and that they failed to adequately monitor other Plan fiduciaries. Defendants have moved to dismiss Mazza's amended complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Because Mazza has sufficiently alleged his claims, the Court denies Defendants' motion.
The case may be found at: https://casetext.com/case/mazza-v-pactiv-evergreen-servs
In Mazza v, Pactiv Evergreen Services Inc., No. 22-05052 (N.D. Ill. May 18, 2023), the District Court says the following:
Plaintiff Michael Mazza, a former participant in the Pactiv Evergreen Services Inc. Employee Savings Plan (the “Plan”) that Defendant Pactiv Evergreen Services Inc. (“Pactiv”) sponsors,filed this purported class action lawsuit under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., against Pactiv and its Board of Directors (the “Director Defendants”). In his amended complaint, Mazza complains that Defendants breached their fiduciary duty of prudence by causing Plan participants to pay excessive recordkeeping and administrative (“RKA”) fees and that they failed to adequately monitor other Plan fiduciaries. Defendants have moved to dismiss Mazza's amended complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Because Mazza has sufficiently alleged his claims, the Court denies Defendants' motion.
The case may be found at: https://casetext.com/case/mazza-v-pactiv-evergreen-servs
ERISA-Sixth Circuit Affirms District Court’s Grant Of Long-Term Disability Benefits (Posted 7/3/2023)
In Laake v. Western & Southern Financial Group Flexible Benefits Plan, Nos. 22-3182, 21-4178 (6th Cir. 5/19/2023), the Sixth Circuit Court of Appeals says the following:
Western & Southern Financial Group Flexible Benefits Plan (the “Plan”) and the Benefits Committee of the Plan (together referred to as “W&S”) appeal the district court’s 2019 remand order and 2022 judgment in favor of Western & Southern Financial Group’s former employee, Sherry Laake. While W&S asserts several challenges on appeal, the central issue throughout the course of this litigation is whether Laake qualifies for long-term disability (“LTD”) benefits extending beyond 24 months pursuant to the terms of the Plan—an employee welfare benefit plan as defined under the Employee Retirement Income Security Act of 1974 (“ERISA”). The district court determined that she does, and it imposed penalties against W&S and awarded Laake attorney’s fees and costs. We AFFIRM.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca6/22-3182/22-3182-2023-05-19.pdf?ts=1684526465
In Laake v. Western & Southern Financial Group Flexible Benefits Plan, Nos. 22-3182, 21-4178 (6th Cir. 5/19/2023), the Sixth Circuit Court of Appeals says the following:
Western & Southern Financial Group Flexible Benefits Plan (the “Plan”) and the Benefits Committee of the Plan (together referred to as “W&S”) appeal the district court’s 2019 remand order and 2022 judgment in favor of Western & Southern Financial Group’s former employee, Sherry Laake. While W&S asserts several challenges on appeal, the central issue throughout the course of this litigation is whether Laake qualifies for long-term disability (“LTD”) benefits extending beyond 24 months pursuant to the terms of the Plan—an employee welfare benefit plan as defined under the Employee Retirement Income Security Act of 1974 (“ERISA”). The district court determined that she does, and it imposed penalties against W&S and awarded Laake attorney’s fees and costs. We AFFIRM.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca6/22-3182/22-3182-2023-05-19.pdf?ts=1684526465
Employee Benefits-IRS Issues Guidance on Section 305 of the SECURE 2.0 Act of 2022 with Respect to Expansion of the Employee Plans Compliance Resolution System (6/30/2023)
The Guidance is Notice 2023-43. According to the IRS, the Notice has the following purpose:
This notice provides guidance in the form of questions and answers with respect to section 305 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 3559 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), enacted on December 29, 2022.
Section 305 provides for the expansion of the Employee Plans Compliance Resolution System (EPCRS), currently set forth in Rev. Proc. 2021-30, 2021-31 IRB 172, and directs the Secretary of the Treasury or the Secretary’s delegate (Secretary) to revise Rev. Proc. 2021-30, or any successor guidance, to take into account the provisions of section 305 not later than the date that is two years after the date of enactment of the SECURE 2.0 Act. This notice is intended to assist taxpayers by providing interim guidance in advance of an update to Rev. Proc. 2021-30 and is not intended to provide comprehensive guidance with respect to section 305 of the SECURE 2.0 Act.
Among other issues addressed, this notice (1) provides that a plan sponsor may self-correct an eligible inadvertent failure (as defined in section 305(e) of the SECURE 2.0 Act) before Rev. Proc. 2021-30 is updated if certain conditions are satisfied and certain exceptions do not apply, (2) provides that a custodian of an individual retirement account described in section 408(a) of the Internal Revenue Code (Code) or an individual retirement annuity described in section 408(b) (IRA) may not correct an eligible inadvertent failure under EPCRS before Rev. Proc. 2021-30 is updated, and (3) provides interim interpretive guidance that applies with respect to corrections of eligible inadvertent failures.
This notice does not address section 301 of the SECURE 2.0 Act, which relates to the recovery of plan overpayments, or section 350 of the SECURE 2.0 Act, which relates to correcting automatic contribution errors in a plan described in section 401(a), 403(b), 408, or 457(b) of the Code. This notice also does not address any elements of section 305 of the SECURE 2.0 Act over which the Department of Labor has authority.1 The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) invite comments on the guidance in this notice and any other aspect of section 305 of the SECURE 2.0 Act.
See Notice 2023-43 for details. It may be found at: https://www.irs.gov/pub/irs-drop/n-23-43.pdf
The Guidance is Notice 2023-43. According to the IRS, the Notice has the following purpose:
This notice provides guidance in the form of questions and answers with respect to section 305 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 3559 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), enacted on December 29, 2022.
Section 305 provides for the expansion of the Employee Plans Compliance Resolution System (EPCRS), currently set forth in Rev. Proc. 2021-30, 2021-31 IRB 172, and directs the Secretary of the Treasury or the Secretary’s delegate (Secretary) to revise Rev. Proc. 2021-30, or any successor guidance, to take into account the provisions of section 305 not later than the date that is two years after the date of enactment of the SECURE 2.0 Act. This notice is intended to assist taxpayers by providing interim guidance in advance of an update to Rev. Proc. 2021-30 and is not intended to provide comprehensive guidance with respect to section 305 of the SECURE 2.0 Act.
Among other issues addressed, this notice (1) provides that a plan sponsor may self-correct an eligible inadvertent failure (as defined in section 305(e) of the SECURE 2.0 Act) before Rev. Proc. 2021-30 is updated if certain conditions are satisfied and certain exceptions do not apply, (2) provides that a custodian of an individual retirement account described in section 408(a) of the Internal Revenue Code (Code) or an individual retirement annuity described in section 408(b) (IRA) may not correct an eligible inadvertent failure under EPCRS before Rev. Proc. 2021-30 is updated, and (3) provides interim interpretive guidance that applies with respect to corrections of eligible inadvertent failures.
This notice does not address section 301 of the SECURE 2.0 Act, which relates to the recovery of plan overpayments, or section 350 of the SECURE 2.0 Act, which relates to correcting automatic contribution errors in a plan described in section 401(a), 403(b), 408, or 457(b) of the Code. This notice also does not address any elements of section 305 of the SECURE 2.0 Act over which the Department of Labor has authority.1 The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) invite comments on the guidance in this notice and any other aspect of section 305 of the SECURE 2.0 Act.
See Notice 2023-43 for details. It may be found at: https://www.irs.gov/pub/irs-drop/n-23-43.pdf
Employee Benefits-IRS Issues Employee Plans News (Posted 6/29/2023)
The News is dated 5/24/2023. It deals with the 403(b) Plan Determination Program Opening June 1, Electronic Filing Regulations for Tax Exempt & Government Entities and other matters. The News may be found here: https://benefitslink.com/src/irs/irs-employee-plans-news-05242023.html
The News is dated 5/24/2023. It deals with the 403(b) Plan Determination Program Opening June 1, Electronic Filing Regulations for Tax Exempt & Government Entities and other matters. The News may be found here: https://benefitslink.com/src/irs/irs-employee-plans-news-05242023.html
ERISA-Sixth Circuit Affirms Insurer’s Denial Of Disabilty Benefits (Posted 6/28/2023)
In Tranbarger v. Lincoln Life & Annuity Co. of New York, No.22-3369 (6th Cir. 5/18/2023), the Sixth Circuit Court of Appeals says the following:
Vickie Tranbarger’s quality of life declined precipitously after a routine surgery. She later left her job and claimed disability benefits, which her insurer denied. Tranbarger challenged that decision in district court. Resolution of the case turned on Tranbarger’s ability to demonstrate complete and continuous disability during the six months following her resignation. After reviewing the administrative record, the district court concluded that Tranbarger failed to prove as much. Accordingly, the court granted judgment to the insurer. We now affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca6/22-3369/22-3369-2023-05-18.pdf?ts=1684438264
In Tranbarger v. Lincoln Life & Annuity Co. of New York, No.22-3369 (6th Cir. 5/18/2023), the Sixth Circuit Court of Appeals says the following:
Vickie Tranbarger’s quality of life declined precipitously after a routine surgery. She later left her job and claimed disability benefits, which her insurer denied. Tranbarger challenged that decision in district court. Resolution of the case turned on Tranbarger’s ability to demonstrate complete and continuous disability during the six months following her resignation. After reviewing the administrative record, the district court concluded that Tranbarger failed to prove as much. Accordingly, the court granted judgment to the insurer. We now affirm.
The case may be found here: https://cases.justia.com/federal/appellate-courts/ca6/22-3369/22-3369-2023-05-18.pdf?ts=1684438264
ERISA-Tenth Circuit Rules That Insurer Was Arbitrary and Capricious Denying Medical Benefits (Posted 6/27/2023)
In D.K. v. United Behav. Health, No. 21-4088 (10th Cir. May 15, 2023), the Tenth Circuit Court of Appeals says the following:
This case considers the procedural requirements for medical claims in insurance plans subject to the Employee Retirement Income Security Act (“ERISA”). Middle schooler A.K.2 struggled with suicidal ideation for many years and attempted suicide numerous times, resulting in frequent emergency room visits and in-patient hospitalizations. A.K.’s physicians strongly recommended she enroll in a residential treatment facility to build the skills necessary to stabilize. Despite these recommendations and extensive evidence in the medical record, United Behavioral Health (“United”) denied coverage for A.K.’s stay at a residential treatment facility beyond an initial three month period. Her parents appealed United’s denial numerous times, requesting further clarification, and providing extensive medical evidence, yet United only replied with conclusory statements that did not address the evidence provided. As a result, A.K.’s parents brought this lawsuit contending United violated its fiduciary duties by failing to provide a “full and fair review” of their claim for medical benefits. Both sides moved for summary judgment, and the district court ruled against United.
We consider whether United arbitrarily and capriciously denied A.K. medical benefits and whether the district court abused its discretion in awarding A.K. benefits rather than remanding to United for further review. We ultimately conclude that United did act arbitrarily and capriciously in not adequately engaging with the opinions of A.K.’s physicians and in not providing its reasoning for denials to A.K.’s parents. We also conclude the district court did not abuse its discretion by awarding A.K. benefits outright. Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM the district court’s grant of summary judgment and award of benefits.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110859668.pdf
In D.K. v. United Behav. Health, No. 21-4088 (10th Cir. May 15, 2023), the Tenth Circuit Court of Appeals says the following:
This case considers the procedural requirements for medical claims in insurance plans subject to the Employee Retirement Income Security Act (“ERISA”). Middle schooler A.K.2 struggled with suicidal ideation for many years and attempted suicide numerous times, resulting in frequent emergency room visits and in-patient hospitalizations. A.K.’s physicians strongly recommended she enroll in a residential treatment facility to build the skills necessary to stabilize. Despite these recommendations and extensive evidence in the medical record, United Behavioral Health (“United”) denied coverage for A.K.’s stay at a residential treatment facility beyond an initial three month period. Her parents appealed United’s denial numerous times, requesting further clarification, and providing extensive medical evidence, yet United only replied with conclusory statements that did not address the evidence provided. As a result, A.K.’s parents brought this lawsuit contending United violated its fiduciary duties by failing to provide a “full and fair review” of their claim for medical benefits. Both sides moved for summary judgment, and the district court ruled against United.
We consider whether United arbitrarily and capriciously denied A.K. medical benefits and whether the district court abused its discretion in awarding A.K. benefits rather than remanding to United for further review. We ultimately conclude that United did act arbitrarily and capriciously in not adequately engaging with the opinions of A.K.’s physicians and in not providing its reasoning for denials to A.K.’s parents. We also conclude the district court did not abuse its discretion by awarding A.K. benefits outright. Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM the district court’s grant of summary judgment and award of benefits.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110859668.pdf
Employee Benefits-IRS Issues Rev. Proc. Providing 2024 Inflations Adjusted Amounts For Health Savings Accounts (Posted 6/26/2023)
In summary, Rev. Proc. 2023-23 provides the following:
This revenue procedure provides the 2024 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under § 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations.
See Rev. Proc. 2023-23 for details. It may be found at: https://www.irs.gov/pub/irs-drop/rp-23-23.pdf
In summary, Rev. Proc. 2023-23 provides the following:
This revenue procedure provides the 2024 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under § 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations.
See Rev. Proc. 2023-23 for details. It may be found at: https://www.irs.gov/pub/irs-drop/rp-23-23.pdf
Employee Benefits-IRS Makes Technical Corrections To The Rules On Annual Reporting Requirements (Posted 6/23/2023)
In summary:
On February 24, 2023, the Employee Benefits Security Administration for the U.S. Department of Labor (the Department or DOL) published a final rule on annual reporting requirements under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). This document contains two technical changes to the regulations: it changes the operational date of the final rule amendments to the regulations to address the Congressional Review Act (CRA) requirement under which a major rule cannot be effective until 60 days after publication in the Federal Register or receipt by Congress, whichever is later. The other corrects a typographical error in the lettering of a paragraph in the regulations. DATES: This final rule is effective May 31, 2023. The operational date of the amendments published at 88 FR 11793 is changed from April 25, 2023, to May 31, 2023.
See the technical corrections for details. They may be found at: https://public-inspection.federalregister.gov/2023-09227.pdf
In summary:
On February 24, 2023, the Employee Benefits Security Administration for the U.S. Department of Labor (the Department or DOL) published a final rule on annual reporting requirements under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). This document contains two technical changes to the regulations: it changes the operational date of the final rule amendments to the regulations to address the Congressional Review Act (CRA) requirement under which a major rule cannot be effective until 60 days after publication in the Federal Register or receipt by Congress, whichever is later. The other corrects a typographical error in the lettering of a paragraph in the regulations. DATES: This final rule is effective May 31, 2023. The operational date of the amendments published at 88 FR 11793 is changed from April 25, 2023, to May 31, 2023.
See the technical corrections for details. They may be found at: https://public-inspection.federalregister.gov/2023-09227.pdf
ERISA-Seventh Circuit Rules On Claim For Severance Benefits (Posted 6/22/2023)
In Carlson v. Northrop Grumman Severance Plan, No. 22-1764 (7th Cir. 5/8/2023), the Seventh Circuit Court of Appeals says the following:
Northrop Grumman laid off some workers in 2012 and did not provide severance benefits to all of them. The firm’s Severance Plan (“the Plan” for short) provides that a laid-off employee regularly scheduled to work at least 20 hours a week will receive severance benefits if that employee “received a cover memo, signed by a Vice President of Human Resources (or his/her designee), with this document addressed to you individually by name.” Another part of the Plan confirms this requirement: “You must be designated as eligible for this plan by a Vice President of Human Resources (or his/her designee). You are designated if you received a memo addressed to you, notifying you of your eligibility for this benefit.” Alan Carlson and Peter DeLuca, who did not receive such a document (which the parties call the “HR Memo”), filed this suit contending that the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001– 1461, entitles them to severance benefits anyway.
See the case for details and results. It may be found here: https://cases.justia.com/federal/appellate-courts/ca7/22-1764/22-1764-2023-05-08.pdf?ts=1683568837
In Carlson v. Northrop Grumman Severance Plan, No. 22-1764 (7th Cir. 5/8/2023), the Seventh Circuit Court of Appeals says the following:
Northrop Grumman laid off some workers in 2012 and did not provide severance benefits to all of them. The firm’s Severance Plan (“the Plan” for short) provides that a laid-off employee regularly scheduled to work at least 20 hours a week will receive severance benefits if that employee “received a cover memo, signed by a Vice President of Human Resources (or his/her designee), with this document addressed to you individually by name.” Another part of the Plan confirms this requirement: “You must be designated as eligible for this plan by a Vice President of Human Resources (or his/her designee). You are designated if you received a memo addressed to you, notifying you of your eligibility for this benefit.” Alan Carlson and Peter DeLuca, who did not receive such a document (which the parties call the “HR Memo”), filed this suit contending that the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001– 1461, entitles them to severance benefits anyway.
See the case for details and results. It may be found here: https://cases.justia.com/federal/appellate-courts/ca7/22-1764/22-1764-2023-05-08.pdf?ts=1683568837
ERISA-Seventh Circuit Upholds District Court’s Ruling Of Breach Of Fiduciary Duties Of Loyalty And Prudence (Posted 6/21/2023)
In Su v. Johnson, No. 22-2204 (7th Cir. May 10, 2023), the Seventh Circuit Court of Appeals says the following:
These appeals present questions about enforcement of fiduciary duties of loyalty and prudence under the Employee Retirement Income Security Act of 1974, better known as ERISA, 29 U.S.C. § 1001 et seq., as well as fiduciaries’ duties to comply with plan documents. Defendants Shirley T. Sherrod and Leroy Johnson were fiduciaries of a retirement plan that Sherrod had set up for herself and other employees of her medical practice. The Secretary of Labor brought this civil enforcement action alleging that both defendants had breached their fiduciary duties under ERISA. The district court granted summary judgment in favor of the Secretary and entered a permanent injunction against defendants removing them as fiduciaries. Walsh v. Sherrod, No. 16-cv04825, 2022 WL 971857 (N.D. Ill. Mar. 31, 2022). Both defendants have appealed.
We affirm. The undisputed facts show that both defendants breached their fiduciary duties of loyalty and prudence under ERISA. Hundreds of thousands of dollars of plan assets were used for defendant Sherrod’s personal benefit but were accounted for as plan expenses or losses rather than as distributions of retirement benefits to her. The permanent injunction was well within the scope of reasonable responses to the breaches.
The case may be found here: http://media.ca7.uscourts.gov/cgi-bin/OpinionsWeb/processWebInputExternal.pl?Submit=Display&Path=Y2023/D05-10/C:22-2204:J:Hamilton:aut:T:fnOp:N:3043618:S:0
In Su v. Johnson, No. 22-2204 (7th Cir. May 10, 2023), the Seventh Circuit Court of Appeals says the following:
These appeals present questions about enforcement of fiduciary duties of loyalty and prudence under the Employee Retirement Income Security Act of 1974, better known as ERISA, 29 U.S.C. § 1001 et seq., as well as fiduciaries’ duties to comply with plan documents. Defendants Shirley T. Sherrod and Leroy Johnson were fiduciaries of a retirement plan that Sherrod had set up for herself and other employees of her medical practice. The Secretary of Labor brought this civil enforcement action alleging that both defendants had breached their fiduciary duties under ERISA. The district court granted summary judgment in favor of the Secretary and entered a permanent injunction against defendants removing them as fiduciaries. Walsh v. Sherrod, No. 16-cv04825, 2022 WL 971857 (N.D. Ill. Mar. 31, 2022). Both defendants have appealed.
We affirm. The undisputed facts show that both defendants breached their fiduciary duties of loyalty and prudence under ERISA. Hundreds of thousands of dollars of plan assets were used for defendant Sherrod’s personal benefit but were accounted for as plan expenses or losses rather than as distributions of retirement benefits to her. The permanent injunction was well within the scope of reasonable responses to the breaches.
The case may be found here: http://media.ca7.uscourts.gov/cgi-bin/OpinionsWeb/processWebInputExternal.pl?Submit=Display&Path=Y2023/D05-10/C:22-2204:J:Hamilton:aut:T:fnOp:N:3043618:S:0
Employee Benefits IRS Reissues Form 8915-F Qualified Disaster Retirement Plan Distributions and Repayments (January 2023 Reissue Date) (Posted 6/20/2023)
Here is What’s New, according to the Instructions:
Qualified 2021 and later disaster distributions (also known as qualified disaster recovery distributions). As a result of section 331 of the Secure 2.0 Act of 2022, enacted December 29, 2022, you are now eligible for the benefits of Form 8915-F if you were adversely affected by a qualified 2021 or later disaster and you received a distribution described in Qualified Disaster Distribution Requirements or Qualified Distribution Requirements, later. Qualified disaster distributions (such as qualified 2021 disaster distributions, qualified 2022 disaster distributions, qualified 2023 disaster distributions, etc.) are also called qualified disaster recovery distributions.
Dollar limit. For qualified 2021 and later disasters, the dollar limit on Form 8915-F for retirement plan distributions is $22,000 per disaster. It was $100,000 but that was for qualified 2020 disasters.
Determining the qualified disaster distribution period, in Part I, for a disaster. The qualified disaster distribution period for each disaster still begins on the day the disaster began. The last day of the qualified disaster distribution period for most qualified 2021 disasters and many qualified 2022 disasters is June 26, 2023. But the last day of the qualified disaster distribution period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the qualified distribution repayment period, in Part IV, for a disaster. The qualified distribution repayment period for each disaster still begins on the day the disaster began. The last day of the qualified distribution repayment period for most qualified 2021 disasters and many qualified 2022 disasters is June 27, 2023. But the last day of the qualified distribution repayment period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the disaster's FEMA number and other information. Appendix B, Qualified Disaster Areas by Year, is being discontinued. See Qualified disaster area, later, for information on where to find a disaster’s FEMA number, beginning date, and declaration date.
New line 1a. New Line 1a explains the criteria set forth in Form 8915-F, line 1a, including “If all of the distributions for this year occurred within the qualified disaster distribution period for each of the disasters listed” in the table at the top of Part I.
New Worksheet 1B. New Worksheet 1B is a tool you may have to use in figuring amounts for lines 1a through 5 of Form 8915-F. See Worksheet 1B, later, to determine whether you must use Worksheet 1B. You can choose to use Worksheet 1B even if you are not required to do so.
See the Instruction for details. It may be found here: https://www.irs.gov/pub/irs-pdf/i8915f.pdf
The reissued Form 8915-F may be found here: https://www.irs.gov/pub/irs-prior/f8915f--2023.pdf
Here is What’s New, according to the Instructions:
Qualified 2021 and later disaster distributions (also known as qualified disaster recovery distributions). As a result of section 331 of the Secure 2.0 Act of 2022, enacted December 29, 2022, you are now eligible for the benefits of Form 8915-F if you were adversely affected by a qualified 2021 or later disaster and you received a distribution described in Qualified Disaster Distribution Requirements or Qualified Distribution Requirements, later. Qualified disaster distributions (such as qualified 2021 disaster distributions, qualified 2022 disaster distributions, qualified 2023 disaster distributions, etc.) are also called qualified disaster recovery distributions.
Dollar limit. For qualified 2021 and later disasters, the dollar limit on Form 8915-F for retirement plan distributions is $22,000 per disaster. It was $100,000 but that was for qualified 2020 disasters.
Determining the qualified disaster distribution period, in Part I, for a disaster. The qualified disaster distribution period for each disaster still begins on the day the disaster began. The last day of the qualified disaster distribution period for most qualified 2021 disasters and many qualified 2022 disasters is June 26, 2023. But the last day of the qualified disaster distribution period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the qualified distribution repayment period, in Part IV, for a disaster. The qualified distribution repayment period for each disaster still begins on the day the disaster began. The last day of the qualified distribution repayment period for most qualified 2021 disasters and many qualified 2022 disasters is June 27, 2023. But the last day of the qualified distribution repayment period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the disaster's FEMA number and other information. Appendix B, Qualified Disaster Areas by Year, is being discontinued. See Qualified disaster area, later, for information on where to find a disaster’s FEMA number, beginning date, and declaration date.
New line 1a. New Line 1a explains the criteria set forth in Form 8915-F, line 1a, including “If all of the distributions for this year occurred within the qualified disaster distribution period for each of the disasters listed” in the table at the top of Part I.
New Worksheet 1B. New Worksheet 1B is a tool you may have to use in figuring amounts for lines 1a through 5 of Form 8915-F. See Worksheet 1B, later, to determine whether you must use Worksheet 1B. You can choose to use Worksheet 1B even if you are not required to do so.
See the Instruction for details. It may be found here: https://www.irs.gov/pub/irs-pdf/i8915f.pdf
The reissued Form 8915-F may be found here: https://www.irs.gov/pub/irs-prior/f8915f--2023.pdf
ERISA-Fifth Circuit Rules That Plaintiff Is Entitled To Health Benefits To Treat Cancer (Posted 6/19/2023)
In Salim v. Louisiana Health Service & Indemnity Co., No. 22-30573 (5th Cir. May 3, 2023 (Unpublished), the Fifth Circuit Court of Appeals says the following:
Robert Salim purchased health insurance from the Louisiana Health Service & Indemnity Company (“Blue Cross”). Salim later sought coverage for proton beam therapy to treat his throat cancer. Citing an internal guideline, Blue Cross denied coverage, deeming proton therapy not medically necessary. Salim sued, arguing that the guideline relied on a third-party source that had since been updated to specifically approve proton therapy for exactly his condition. The district court held that the denial was an abuse of discretion, and it ordered Blue Cross to provide coverage. We AFFIRM.
The case may be found at: https://www.ca5.uscourts.gov/opinions/unpub/22/22-30573.0.pdf
In Salim v. Louisiana Health Service & Indemnity Co., No. 22-30573 (5th Cir. May 3, 2023 (Unpublished), the Fifth Circuit Court of Appeals says the following:
Robert Salim purchased health insurance from the Louisiana Health Service & Indemnity Company (“Blue Cross”). Salim later sought coverage for proton beam therapy to treat his throat cancer. Citing an internal guideline, Blue Cross denied coverage, deeming proton therapy not medically necessary. Salim sued, arguing that the guideline relied on a third-party source that had since been updated to specifically approve proton therapy for exactly his condition. The district court held that the denial was an abuse of discretion, and it ordered Blue Cross to provide coverage. We AFFIRM.
The case may be found at: https://www.ca5.uscourts.gov/opinions/unpub/22/22-30573.0.pdf
Employee Benefits-IRS Issues Memorandum On Claims Substantiation for Payment or Reimbursement of Medical and Dependent Care Expenses (Posted 6/16/2023)
In IRS Chief Counsel Memorandum 202317020 (Mar. 29, 2023), the following matters were raised:
ISSUES:
CONCLUSION:
Reimbursements of section 213(d) medical expenses to an employee from a health FSA provided in a section 125 cafeteria plan are included in the gross income of such employee if any expense of any employee reimbursed by the health FSA is not fully substantiated including if any expenses below a certain threshold are not substantiated. If a section 125 cafeteria plan does not require an independent third party to fully substantiate reimbursements for medical expenses (for example, by permitting self certification of expenses, “sampling” of expenses, or certification by favored providers), does not require substantiation for medical expenses below certain dollar amounts, or does not substantiate reimbursements for dependent care assistance expenses, then the plan fails to operate in accordance with the substantiation requirements of Prop. Reg. § 1.125–6(b) and is not a cafeteria plan within the meaning of section 125. Therefore, the amount of any benefits that any employee elects under the cafeteria plan must be included in gross income and is wages for Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) purposes subject to withholding. In addition, an employer may not exclude reimbursements of dependent care expenses from an employee’s gross income if any expenses of any employee under the dependent care assistance program are not substantiated after the expense has been incurred.
See the Memorandum for details. It may be found at: https://www.irs.gov/pub/irs-wd/202317020.pdf
In IRS Chief Counsel Memorandum 202317020 (Mar. 29, 2023), the following matters were raised:
ISSUES:
- Are reimbursements of section 213(d) medical expenses to an employee from a health flexible spending arrangement (health FSA) provided in a section 125 cafeteria plan included in an employee’s gross income under section 105(b) if any section 213(d) medical expenses of any employee are not substantiated in accordance with proposed regulation § 1.125-6(b)?
- Will expenses be considered properly substantiated if employees self-certify expenses, if the plan substantiates only some expenses “sampling”, if only amounts over a certain level (i.e., de minimis amounts) are substantiated, if charges with favored providers are not required to be substantiated, or if dependent care expenses are reimbursed before the expenses are incurred?
CONCLUSION:
Reimbursements of section 213(d) medical expenses to an employee from a health FSA provided in a section 125 cafeteria plan are included in the gross income of such employee if any expense of any employee reimbursed by the health FSA is not fully substantiated including if any expenses below a certain threshold are not substantiated. If a section 125 cafeteria plan does not require an independent third party to fully substantiate reimbursements for medical expenses (for example, by permitting self certification of expenses, “sampling” of expenses, or certification by favored providers), does not require substantiation for medical expenses below certain dollar amounts, or does not substantiate reimbursements for dependent care assistance expenses, then the plan fails to operate in accordance with the substantiation requirements of Prop. Reg. § 1.125–6(b) and is not a cafeteria plan within the meaning of section 125. Therefore, the amount of any benefits that any employee elects under the cafeteria plan must be included in gross income and is wages for Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) purposes subject to withholding. In addition, an employer may not exclude reimbursements of dependent care expenses from an employee’s gross income if any expenses of any employee under the dependent care assistance program are not substantiated after the expense has been incurred.
See the Memorandum for details. It may be found at: https://www.irs.gov/pub/irs-wd/202317020.pdf
Employee Benefits-IRS Issues Clarification of 2022 Form 5500 Instructions (Posted 6/15/2023)
The Clarifications states the following:
Schedule SB, Line 26b - Schedule of Projection of Expected Benefit Payments
Line 26b of Schedule SB requires plans covered by Title IV of ERISA that have 1,000 or more total participants as of the valuation date to submit a schedule showing a 50-year projection of expected benefit payments. This projection shows expected benefit payments for active participants, terminated vested participants, and retired participants and beneficiaries receiving payments determined assuming:
If you are required to submit this schedule for a plan that uses the annuity substitution rule provided in Section 1.430(d)-1(f)(4)(iii)(B) to determine the funding target instead of assuming benefits are paid in the form assumed for valuation purposes (per item 4. above), you may assume benefits are paid as an annuity (i.e., you may report the projected benefits that are used to determine the funding target).
This clarification is proposed to be added to the 2023 Form 5500 instructions for line 26b of Schedule SB. See PBGC’S August 29, 2022 Notice of Proposed Submission of Information Collection PDF for further information.
The Clarification may be found at: https://www.irs.gov/retirement-plans/clarification-of-2022-form-5500-instructions
The Clarifications states the following:
Schedule SB, Line 26b - Schedule of Projection of Expected Benefit Payments
Line 26b of Schedule SB requires plans covered by Title IV of ERISA that have 1,000 or more total participants as of the valuation date to submit a schedule showing a 50-year projection of expected benefit payments. This projection shows expected benefit payments for active participants, terminated vested participants, and retired participants and beneficiaries receiving payments determined assuming:
- No additional accruals,
- Experience (e.g., termination, mortality, and retirement) is in line with valuation assumptions,
- No new entrants, and
- Benefits are paid in the form assumed for valuation purposes.
If you are required to submit this schedule for a plan that uses the annuity substitution rule provided in Section 1.430(d)-1(f)(4)(iii)(B) to determine the funding target instead of assuming benefits are paid in the form assumed for valuation purposes (per item 4. above), you may assume benefits are paid as an annuity (i.e., you may report the projected benefits that are used to determine the funding target).
This clarification is proposed to be added to the 2023 Form 5500 instructions for line 26b of Schedule SB. See PBGC’S August 29, 2022 Notice of Proposed Submission of Information Collection PDF for further information.
The Clarification may be found at: https://www.irs.gov/retirement-plans/clarification-of-2022-form-5500-instructions
Employee Benefits-IRS Issues Memorandum On Claims Substantiation for Payment or Reimbursement of Medical and Dependent Care Expenses (Posted 6/14/2023)
The Memorandum (No. 202317020) begins as follows:
ISSUES: (1) Are reimbursements of section 213(d) medical expenses to an employee from a health flexible spending arrangement (health FSA) provided in a section 125 cafeteria plan included in an employee’s gross income under section 105(b) if any section 213(d) medical expenses of any employee are not substantiated in accordance with proposed regulation § 1.125-6(b)?
(2) Will expenses be considered properly substantiated if employees self-certify expenses, if the plan substantiates only some expenses “sampling”, if only amounts over a certain level (i.e., de minimis amounts) are substantiated, if charges with favored providers are not required to be substantiated, or if dependent care expenses are reimbursed before the expenses are incurred?
CONCLUSION: Reimbursements of section 213(d) medical expenses to an employee from a health FSA provided in a section 125 cafeteria plan are included in the gross income of such employee if any expense of any employee reimbursed by the health FSA is not fully substantiated including if any expenses below a certain threshold are not substantiated. If a section 125 cafeteria plan does not require an independent third party to fully substantiate reimbursements for medical expenses (for example, by permitting self-certification of expenses, “sampling” of expenses, or certification by favored providers), does not require substantiation for medical expenses below certain dollar amounts, or does not substantiate reimbursements for dependent care assistance expenses, then the plan fails to operate in accordance with the substantiation requirements of Prop. Reg. § 1.125–6(b) and is not a cafeteria plan within the meaning of section 125.
Therefore, the amount of any benefits that any employee elects under the cafeteria plan must be included in gross income and is wages for Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) purposes subject to withholding. In addition, an employer may not exclude reimbursements of dependent care expenses from an employee’s gross income if any expenses of any employee under the dependent care assistance program are not substantiated after the expense has been incurred.
See the Memorandum for details. It may be found at: https://www.irs.gov/pub/irs-wd/202317020.pdf
The Memorandum (No. 202317020) begins as follows:
ISSUES: (1) Are reimbursements of section 213(d) medical expenses to an employee from a health flexible spending arrangement (health FSA) provided in a section 125 cafeteria plan included in an employee’s gross income under section 105(b) if any section 213(d) medical expenses of any employee are not substantiated in accordance with proposed regulation § 1.125-6(b)?
(2) Will expenses be considered properly substantiated if employees self-certify expenses, if the plan substantiates only some expenses “sampling”, if only amounts over a certain level (i.e., de minimis amounts) are substantiated, if charges with favored providers are not required to be substantiated, or if dependent care expenses are reimbursed before the expenses are incurred?
CONCLUSION: Reimbursements of section 213(d) medical expenses to an employee from a health FSA provided in a section 125 cafeteria plan are included in the gross income of such employee if any expense of any employee reimbursed by the health FSA is not fully substantiated including if any expenses below a certain threshold are not substantiated. If a section 125 cafeteria plan does not require an independent third party to fully substantiate reimbursements for medical expenses (for example, by permitting self-certification of expenses, “sampling” of expenses, or certification by favored providers), does not require substantiation for medical expenses below certain dollar amounts, or does not substantiate reimbursements for dependent care assistance expenses, then the plan fails to operate in accordance with the substantiation requirements of Prop. Reg. § 1.125–6(b) and is not a cafeteria plan within the meaning of section 125.
Therefore, the amount of any benefits that any employee elects under the cafeteria plan must be included in gross income and is wages for Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) purposes subject to withholding. In addition, an employer may not exclude reimbursements of dependent care expenses from an employee’s gross income if any expenses of any employee under the dependent care assistance program are not substantiated after the expense has been incurred.
See the Memorandum for details. It may be found at: https://www.irs.gov/pub/irs-wd/202317020.pdf
ERISA-Sixth Circuit Reverses Grant Of Summary Judgment Against Plaintiffs' Claims To Recover Unpaid Contributions (Posted 6/13/2023)
In Trustees of Sheet Metal Workers Local 7 v. Pro Services, Inc., No. 22-1566 (6th Cir. 4/21/2023), the Sixth Circuit Court of Appeals says the following:
The trustees of three multi-employer benefit funds (“the Funds”) sued Pro Services, Inc. under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act (LMRA), 29 U.S.C. § 141 et seq., to recover unpaid benefit contributions allegedly owed by Pro Services. The issue on appeal is whether a category of Pro Services’ employees—known as Full-Service Maintenance Technicians (“FMTs”)—performed work covered by the operative collective bargaining agreement (the “CBA” or “Agreement”), triggering Pro Services’ payment obligation to the Funds for the hours worked by the FMTs.
The district court granted Pro Services’ motion for summary judgment—it was undisputed that the FMTs worked in manufacturing, and the court concluded that the CBA covered workers in the construction industry based only on a caption in the CBA. For the reasons stated below, we REVERSE the district court’s grant of summary judgment, and remand the case for further proceedings.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca6/22-1566/22-1566-2023-04-21.pdf?ts=1682094624
In Trustees of Sheet Metal Workers Local 7 v. Pro Services, Inc., No. 22-1566 (6th Cir. 4/21/2023), the Sixth Circuit Court of Appeals says the following:
The trustees of three multi-employer benefit funds (“the Funds”) sued Pro Services, Inc. under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act (LMRA), 29 U.S.C. § 141 et seq., to recover unpaid benefit contributions allegedly owed by Pro Services. The issue on appeal is whether a category of Pro Services’ employees—known as Full-Service Maintenance Technicians (“FMTs”)—performed work covered by the operative collective bargaining agreement (the “CBA” or “Agreement”), triggering Pro Services’ payment obligation to the Funds for the hours worked by the FMTs.
The district court granted Pro Services’ motion for summary judgment—it was undisputed that the FMTs worked in manufacturing, and the court concluded that the CBA covered workers in the construction industry based only on a caption in the CBA. For the reasons stated below, we REVERSE the district court’s grant of summary judgment, and remand the case for further proceedings.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca6/22-1566/22-1566-2023-04-21.pdf?ts=1682094624
ERISA-First Circuit Upholds Ruling Against Plaintiff’s Claims Against Third-Party Administrator For Paying Medical Providers Amounts In Excess Of Negotiated Rates, Finding That The Third-Party Administrator Is Not An ERISA Fiduciary (Posted 6/12/2023)
In Mass. Laborers' Health & Welfare Fund v. Blue Cross Blue Shield of Mass., No, 22-1317 (1st Cir. 4/25/2023), the First Circuit Court of Appeals says the following:
From 2006 to 2022, Blue Cross Blue Shield of Massachusetts ("BCBSMA") served under contract as a third-party administrator (a "TPA") for the self-funded multiemployer group health plan (the "Plan") administered by the Massachusetts Laborers' Health and Welfare Fund (the "Fund"). BCBSMA was also a TPA for other benefit plans during this period. By contracting with BCBSMA, the Fund made available to the Plan's participants the discounted rates that BCBSMA negotiates with a network of medical providers.
Among other contractual obligations, BCBSMA was responsible for repricing participants' claims according to its provider arrangements and transmitting approved claim payments to providers on behalf of the Fund. In 2021, the Fund sued BCBSMA, alleging that the Fund had discovered various instances in which BCBSMA paid providers in amounts exceeding the negotiated rates. The Fund brought three claims under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., all of which depended on the assertion that BCBSMA was a fiduciary of the Plan.
The district court granted BCBSMA's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), holding that the Fund had failed to plausibly allege that BCBSMA was an ERISA fiduciary with respect to the actions subject to the Fund's complaint. See Mass. Laborers' Health & Welfare Fund v. Blue Cross - Blue Shield of Mass., No. 21-cv-10523, 2022 WL 952247, at *1 (D. Mass. Mar. 30, 2022). We affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca1/22-1317/22-1317-2023-04-25.pdf?ts=1682454628
In Mass. Laborers' Health & Welfare Fund v. Blue Cross Blue Shield of Mass., No, 22-1317 (1st Cir. 4/25/2023), the First Circuit Court of Appeals says the following:
From 2006 to 2022, Blue Cross Blue Shield of Massachusetts ("BCBSMA") served under contract as a third-party administrator (a "TPA") for the self-funded multiemployer group health plan (the "Plan") administered by the Massachusetts Laborers' Health and Welfare Fund (the "Fund"). BCBSMA was also a TPA for other benefit plans during this period. By contracting with BCBSMA, the Fund made available to the Plan's participants the discounted rates that BCBSMA negotiates with a network of medical providers.
Among other contractual obligations, BCBSMA was responsible for repricing participants' claims according to its provider arrangements and transmitting approved claim payments to providers on behalf of the Fund. In 2021, the Fund sued BCBSMA, alleging that the Fund had discovered various instances in which BCBSMA paid providers in amounts exceeding the negotiated rates. The Fund brought three claims under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., all of which depended on the assertion that BCBSMA was a fiduciary of the Plan.
The district court granted BCBSMA's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), holding that the Fund had failed to plausibly allege that BCBSMA was an ERISA fiduciary with respect to the actions subject to the Fund's complaint. See Mass. Laborers' Health & Welfare Fund v. Blue Cross - Blue Shield of Mass., No. 21-cv-10523, 2022 WL 952247, at *1 (D. Mass. Mar. 30, 2022). We affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca1/22-1317/22-1317-2023-04-25.pdf?ts=1682454628
Employee Benefits-DOL Issues Field Assistance Bulletin (FAB) No. 2023-01, Annual Funding Notice Requirements for Multiemployer Pension Plans that Received Special Financial Assistance (Posted 6/9/2023)
The FAB has the following background:
President Biden signed the American Rescue Plan Act on March 11, 2021, which added section 4262 to Title IV of the Employee Retirement Income Security Act (ERISA).(1) Under section 4262 of ERISA, an eligible multiemployer plan may apply for special financial assistance (SFA) from the Pension Benefit Guaranty Corporation (PBGC). Receiving SFA has a material effect on a plan's assets and subjects a plan to certain restrictions and conditions that impact the annual funding notice disclosures required by section 101(f) of ERISA and regulations.
This memorandum provides guidance to the Employee Benefits Security Administration's national and regional offices on how multiemployer defined benefit plan administrators can comply with the annual funding notice requirements of section 101(f) of ERISA in the case of plans that received SFA from PBGC under the American Rescue Plan Act or are eligible to apply for SFA from PBGC. This memorandum also includes model language that plan administrators may use in the annual funding notice.
See the FAB for details. It may be found at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2023-01
The FAB has the following background:
President Biden signed the American Rescue Plan Act on March 11, 2021, which added section 4262 to Title IV of the Employee Retirement Income Security Act (ERISA).(1) Under section 4262 of ERISA, an eligible multiemployer plan may apply for special financial assistance (SFA) from the Pension Benefit Guaranty Corporation (PBGC). Receiving SFA has a material effect on a plan's assets and subjects a plan to certain restrictions and conditions that impact the annual funding notice disclosures required by section 101(f) of ERISA and regulations.
This memorandum provides guidance to the Employee Benefits Security Administration's national and regional offices on how multiemployer defined benefit plan administrators can comply with the annual funding notice requirements of section 101(f) of ERISA in the case of plans that received SFA from PBGC under the American Rescue Plan Act or are eligible to apply for SFA from PBGC. This memorandum also includes model language that plan administrators may use in the annual funding notice.
See the FAB for details. It may be found at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2023-01
ERISA-Sixth Circuit Reverses Summary Judgment For Defendant Recognizing That Certain Workers Are Covered By The Collective Bargaining Agreement (Posted 6/8/2023)
In Trustees of Sheet Metal Workers Loc. 7 Zone 1 Pension Fund v. Pro Servs., Inc., No. 22-1566 (6th Cir. Apr. 21, 2023), the Sixth Circuit Court of Appeals says the following:
The trustees of three multi-employer benefit funds (“the Funds”)1 sued Pro Services, Inc. under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act (LMRA), 29 U.S.C. § 141 et seq., to recover unpaid benefit contributions allegedly owed by Pro Services.
The issue on appeal is whether a category of Pro Services’ employees—known as Full-Service Maintenance Technicians (“FMTs”)—performed work covered by the operative collective bargaining agreement (the “CBA” or “Agreement”), triggering Pro Services’ payment obligation to the Funds for the hours worked by the FMTs. The district court granted Pro Services’ motion for summary judgment—it was undisputed that the FMTs worked in manufacturing, and the court concluded that the CBA covered workers in the construction industry based only on a caption in the CBA. For the reasons stated below, we REVERSE the district court’s grant of summary judgment, and remand the case for further proceedings.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0081p-06.pdf
In Trustees of Sheet Metal Workers Loc. 7 Zone 1 Pension Fund v. Pro Servs., Inc., No. 22-1566 (6th Cir. Apr. 21, 2023), the Sixth Circuit Court of Appeals says the following:
The trustees of three multi-employer benefit funds (“the Funds”)1 sued Pro Services, Inc. under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act (LMRA), 29 U.S.C. § 141 et seq., to recover unpaid benefit contributions allegedly owed by Pro Services.
The issue on appeal is whether a category of Pro Services’ employees—known as Full-Service Maintenance Technicians (“FMTs”)—performed work covered by the operative collective bargaining agreement (the “CBA” or “Agreement”), triggering Pro Services’ payment obligation to the Funds for the hours worked by the FMTs. The district court granted Pro Services’ motion for summary judgment—it was undisputed that the FMTs worked in manufacturing, and the court concluded that the CBA covered workers in the construction industry based only on a caption in the CBA. For the reasons stated below, we REVERSE the district court’s grant of summary judgment, and remand the case for further proceedings.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0081p-06.pdf
Employee Benefits-IRS Issues Updated Instructions for Form 5307, Application for Determination for Adopters of Modified Nonstandardized Pre-Approved Plans (Posted 6/7/2023)
Here is What’s New with the Instructions and Form 5307:
The form and instructions have been updated to be completed on Pay.gov as of July 1, 2023. Revised form. The form and the instructions have undergone major revisions in the format and information required.
Review these documents before completing the application.
Note. The Determination Letter (DL) program is administered under Rev. Proc. 2023-4 (updated annually), and Rev. Proc. 2016-37, as modified by Rev. Proc. 2017-41 and 2019-20.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-pdf/i5307.pdf
Here is What’s New with the Instructions and Form 5307:
The form and instructions have been updated to be completed on Pay.gov as of July 1, 2023. Revised form. The form and the instructions have undergone major revisions in the format and information required.
Review these documents before completing the application.
Note. The Determination Letter (DL) program is administered under Rev. Proc. 2023-4 (updated annually), and Rev. Proc. 2016-37, as modified by Rev. Proc. 2017-41 and 2019-20.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-pdf/i5307.pdf
Employee Benefits-Tenth Circuit Upholds Award Of Medical Benefits (Posted 6/6/2023)
In D.K. v. United Behavioral Health, No. 21-4088 (10th Cir. May 15, 2023), the Tenth Circuit Court of Appeals says the following:
This case considers the procedural requirements for medical claims in insurance plans subject to the Employee Retirement Income Security Act (“ERISA”). Middle schooler A.K.2 struggled with suicidal ideation for many years and attempted suicide numerous times, resulting in frequent emergency room visits and in-patient hospitalizations. A.K.’s physicians strongly recommended she enroll in a residential treatment facility to build the skills necessary to stabilize. Despite these recommendations and extensive evidence in the medical record, United Behavioral Health (“United”) denied coverage for A.K.’s stay at a residential treatment facility beyond an initial three month period. Her parents appealed United’s denial numerous times, requesting further clarification, and providing extensive medical evidence, yet United only replied with conclusory statements that did not address the evidence provided. As a result, A.K.’s parents brought this lawsuit contending United violated its fiduciary duties by failing to provide a “full and fair review” of their claim for medical benefits. Both sides moved for summary judgment, and the district court ruled against United.
We consider whether United arbitrarily and capriciously denied A.K. medical benefits and whether the district court abused its discretion in awarding A.K. benefits rather than remanding to United for further review. We ultimately conclude that United did act arbitrarily and capriciously in not adequately engaging with the opinions of A.K.’s physicians and in not providing its reasoning for denials to A.K.’s parents. We also conclude the district court did not abuse its discretion by awarding A.K. benefits outright. Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM the district court’s grant of summary judgment and award of benefits.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110859668.pdf
In D.K. v. United Behavioral Health, No. 21-4088 (10th Cir. May 15, 2023), the Tenth Circuit Court of Appeals says the following:
This case considers the procedural requirements for medical claims in insurance plans subject to the Employee Retirement Income Security Act (“ERISA”). Middle schooler A.K.2 struggled with suicidal ideation for many years and attempted suicide numerous times, resulting in frequent emergency room visits and in-patient hospitalizations. A.K.’s physicians strongly recommended she enroll in a residential treatment facility to build the skills necessary to stabilize. Despite these recommendations and extensive evidence in the medical record, United Behavioral Health (“United”) denied coverage for A.K.’s stay at a residential treatment facility beyond an initial three month period. Her parents appealed United’s denial numerous times, requesting further clarification, and providing extensive medical evidence, yet United only replied with conclusory statements that did not address the evidence provided. As a result, A.K.’s parents brought this lawsuit contending United violated its fiduciary duties by failing to provide a “full and fair review” of their claim for medical benefits. Both sides moved for summary judgment, and the district court ruled against United.
We consider whether United arbitrarily and capriciously denied A.K. medical benefits and whether the district court abused its discretion in awarding A.K. benefits rather than remanding to United for further review. We ultimately conclude that United did act arbitrarily and capriciously in not adequately engaging with the opinions of A.K.’s physicians and in not providing its reasoning for denials to A.K.’s parents. We also conclude the district court did not abuse its discretion by awarding A.K. benefits outright. Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM the district court’s grant of summary judgment and award of benefits.
The case may be found here: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110859668.pdf
Employee Benefits-District Court Rules That The Plaintiff Need Not Exhaust All Administrative Remedies To Pursue A Case In Court (Posted 5/2/2023)
In Jackson v. The Guardian Life Insurance Company of America, No. 22-3142 (N.D. Cal. Apr. 13, 2023), the District Court says the following:
Charles Jackson, Sr. brings this lawsuit against The Guardian Life Insurance Company of America and his employer, Pacific States Petroleum under the Employee Retirement Income Security Act (“ERISA”). 29 U.S.C. §§ 1132(a)(1)(B), (a)(3)(B). Defendants move for summary judgment based on Plaintiff's failure-in their view-to exhaust administrative remedies under Pacific States' employee benefit plan prior to filing suit. (Dkt. No. 27.)
After carefully reviewing the parties' briefs and conducting oral arguments on April 13, 2023, Defendants' motion is DENIED. If a plan “clearly and unambiguously” requires pre-suit exhaustion, a plaintiff must satisfy the plan's requirements prior to filing suit without exception. Wit v. United Behavioral Health, 58 F.4th 1080, 1098 (9th Cir. 2023). But “a claimant need not exhaust when the plan does not require it.” Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc., 770 F.3d 1282, 1299 (9th Cir. 2014). Here, the Pacific States plan does not require exhaustion of administrative remedies. (Dkt. No. 27-1 at 522-524); see also Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 628 (9th Cir. 2008) (courts interpret ERISA plans “as would a person of average intelligence and experience”). So, Plaintiff had no obligation to do so. Spinedex, 770 F.3d at 1299.
The case may be found at: https://casetext.com/case/jackson-v-the-guardian-life-ins-co-of-am-1
In Jackson v. The Guardian Life Insurance Company of America, No. 22-3142 (N.D. Cal. Apr. 13, 2023), the District Court says the following:
Charles Jackson, Sr. brings this lawsuit against The Guardian Life Insurance Company of America and his employer, Pacific States Petroleum under the Employee Retirement Income Security Act (“ERISA”). 29 U.S.C. §§ 1132(a)(1)(B), (a)(3)(B). Defendants move for summary judgment based on Plaintiff's failure-in their view-to exhaust administrative remedies under Pacific States' employee benefit plan prior to filing suit. (Dkt. No. 27.)
After carefully reviewing the parties' briefs and conducting oral arguments on April 13, 2023, Defendants' motion is DENIED. If a plan “clearly and unambiguously” requires pre-suit exhaustion, a plaintiff must satisfy the plan's requirements prior to filing suit without exception. Wit v. United Behavioral Health, 58 F.4th 1080, 1098 (9th Cir. 2023). But “a claimant need not exhaust when the plan does not require it.” Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc., 770 F.3d 1282, 1299 (9th Cir. 2014). Here, the Pacific States plan does not require exhaustion of administrative remedies. (Dkt. No. 27-1 at 522-524); see also Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 628 (9th Cir. 2008) (courts interpret ERISA plans “as would a person of average intelligence and experience”). So, Plaintiff had no obligation to do so. Spinedex, 770 F.3d at 1299.
The case may be found at: https://casetext.com/case/jackson-v-the-guardian-life-ins-co-of-am-1
Health Care-HHS Issues Fact Sheet On Notice of Benefit and Payment Parameters for 2024 Final Rule (Posted 6/1/2023)
The Fact Sheet begins as follows:
In the HHS Notice of Benefit and Payment Parameters for 2024 final rule released today, the Centers for Medicare & Medicaid Services (CMS) finalized standards for issuers and Marketplaces, as well as requirements for agents, brokers, web-brokers, and Assisters that help consumers with enrollment through Marketplaces that use the Federal platform. These changes further the Biden-Harris Administration’s goals of advancing health equity by addressing the health disparities that underlie our health system. The final policies build on the Affordable Care Act’s promise to expand access to quality, affordable health coverage and care by increasing access to health care services, simplifying choice and improving the plan selection process, making it easier to enroll in coverage, strengthening markets, and bolstering program integrity.
See the Fact Sheet for details. It may be found here: https://www.cms.gov/newsroom/fact-sheets/hhs-notice-benefit-and-payment-parameters-2024-final-rule
The 2024 Final Rule may be found here: https://www.govinfo.gov/content/pkg/FR-2023-04-27/pdf/2023-08368.pdf
The Fact Sheet begins as follows:
In the HHS Notice of Benefit and Payment Parameters for 2024 final rule released today, the Centers for Medicare & Medicaid Services (CMS) finalized standards for issuers and Marketplaces, as well as requirements for agents, brokers, web-brokers, and Assisters that help consumers with enrollment through Marketplaces that use the Federal platform. These changes further the Biden-Harris Administration’s goals of advancing health equity by addressing the health disparities that underlie our health system. The final policies build on the Affordable Care Act’s promise to expand access to quality, affordable health coverage and care by increasing access to health care services, simplifying choice and improving the plan selection process, making it easier to enroll in coverage, strengthening markets, and bolstering program integrity.
See the Fact Sheet for details. It may be found here: https://www.cms.gov/newsroom/fact-sheets/hhs-notice-benefit-and-payment-parameters-2024-final-rule
The 2024 Final Rule may be found here: https://www.govinfo.gov/content/pkg/FR-2023-04-27/pdf/2023-08368.pdf
Taxation-IRS Issues Technical Advise Memorandum Which Considers Whether Future Retiree Benefits Will Be Deductible (Posted 5/31/2023)
Technical Advice Memorandum 202315010 frames the issue as follows:
ISSUE: Whether Taxpayer is entitled to deduct estimated future retiree benefits as unpaid loss adjustment expenses (“LAE”) in its Year 1, Year 2, and Year 3 taxable years under § 832(b)(5) of the Internal Revenue Code (“Code”), or whether § 404(a)(5) applies and TAM-124724-21 2 precludes deductibility of such amounts until the year in which retiree benefits are includible in gross income of the employee receiving the benefits.
See the Technical Advice Memorandum for the IRS discussion and conclusion. It may be found at: https://www.irs.gov/pub/irs-wd/202315010.pdf
Technical Advice Memorandum 202315010 frames the issue as follows:
ISSUE: Whether Taxpayer is entitled to deduct estimated future retiree benefits as unpaid loss adjustment expenses (“LAE”) in its Year 1, Year 2, and Year 3 taxable years under § 832(b)(5) of the Internal Revenue Code (“Code”), or whether § 404(a)(5) applies and TAM-124724-21 2 precludes deductibility of such amounts until the year in which retiree benefits are includible in gross income of the employee receiving the benefits.
See the Technical Advice Memorandum for the IRS discussion and conclusion. It may be found at: https://www.irs.gov/pub/irs-wd/202315010.pdf
Preventive Services-DOL Issues FAQs about Affordable Care Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 59 (Posted 5/30/2023)
The FAQs begin as follows:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of the Affordable Care Act and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), in light of the recent court decision in Braidwood Management Inc. v. Becerra.These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments), along with the Office of Personnel Management. These FAQs answer questions from stakeholders to help people understand the law and promote compliance. Previously issued FAQs are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs#Affordable_Care_Act.
See the FAQs for details. They may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-59
The FAQs begin as follows:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of the Affordable Care Act and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), in light of the recent court decision in Braidwood Management Inc. v. Becerra.These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments), along with the Office of Personnel Management. These FAQs answer questions from stakeholders to help people understand the law and promote compliance. Previously issued FAQs are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs#Affordable_Care_Act.
See the FAQs for details. They may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-59
Taxation-IRS Issues Private Letter Ruling Concluding That The Expense Of A Particular Product, Which Is Food But Not A Drug Or Medicine, Is Not A Deductible Medical Expense (Posted 5/26/2023)
The Private Letter Ruling (which if No. 202311001), is here: https://www.irs.gov/pub/irs-wd/202311001.pdf
The Private Letter Ruling (which if No. 202311001), is here: https://www.irs.gov/pub/irs-wd/202311001.pdf
Health Care-White House Issues Fact Sheet In Which President Biden Announces Plan to Expand Health Coverage to DACA Recipients (Posted 5/25/2023)
The Fact Sheet begins as follows:
In 2012, President Obama and then Vice President Biden announced the Deferred Action for Childhood Arrivals (DACA) program to allow young people to live and work in the only country they know as home. Over the last decade, DACA has brought stability, possibility, and progress to more than 800,000 Dreamers.
President Biden believes that DACA recipients strengthen our economy and enrich our workplaces, our schools and communities, and our country as a whole. That’s why on his first day in office, he called on Congress to give Dreamers a pathway to citizenship and he has repeated that call every State of the Union address since. While Congress has failed to act, the Biden-Harris Administration has taken significant measures to protect Dreamers. This includes, issuing regulations by the Department of Homeland Security to “preserve and fortify” DACA and fighting political opponents in court as they attempt to strip them of the only home they have ever known.
The Biden-Harris Administration is committed to providing Dreamers the opportunities and support they need succeed. Today President Biden is announcing a plan to expand health coverage for DACA recipients. The Department of Health and Human Services will shortly propose a rule amending the definition of “lawful presence,” for purposes of Medicaid and Affordable Care Act coverage, to include DACA recipients. We recognize that every day counts, and we expect to get this done by the end of the month. If finalized, the rule will make DACA recipients eligible for these programs for the first time. Under the proposed rule, DACA recipients will be able to apply for coverage through the Health Insurance Marketplace, where they may qualify for financial assistance based on income, and through their state Medicaid agency. Like all other enrollees, eligibility information will be verified electronically when individuals apply for coverage.
See the Fact Sheet for details. It may be found at: https://www.whitehouse.gov/briefing-room/statements-releases/2023/04/13/fact-sheet-fact-sheet-president-biden-announces-plan-to-expand-health-coverage-to-daca-recipients/
Note: President Biden has signed legislation ending the COVID-19 national emergency. The legislation is here: https://www.congress.gov/bill/118th-congress/house-joint-resolution/7/text
The Fact Sheet begins as follows:
In 2012, President Obama and then Vice President Biden announced the Deferred Action for Childhood Arrivals (DACA) program to allow young people to live and work in the only country they know as home. Over the last decade, DACA has brought stability, possibility, and progress to more than 800,000 Dreamers.
President Biden believes that DACA recipients strengthen our economy and enrich our workplaces, our schools and communities, and our country as a whole. That’s why on his first day in office, he called on Congress to give Dreamers a pathway to citizenship and he has repeated that call every State of the Union address since. While Congress has failed to act, the Biden-Harris Administration has taken significant measures to protect Dreamers. This includes, issuing regulations by the Department of Homeland Security to “preserve and fortify” DACA and fighting political opponents in court as they attempt to strip them of the only home they have ever known.
The Biden-Harris Administration is committed to providing Dreamers the opportunities and support they need succeed. Today President Biden is announcing a plan to expand health coverage for DACA recipients. The Department of Health and Human Services will shortly propose a rule amending the definition of “lawful presence,” for purposes of Medicaid and Affordable Care Act coverage, to include DACA recipients. We recognize that every day counts, and we expect to get this done by the end of the month. If finalized, the rule will make DACA recipients eligible for these programs for the first time. Under the proposed rule, DACA recipients will be able to apply for coverage through the Health Insurance Marketplace, where they may qualify for financial assistance based on income, and through their state Medicaid agency. Like all other enrollees, eligibility information will be verified electronically when individuals apply for coverage.
See the Fact Sheet for details. It may be found at: https://www.whitehouse.gov/briefing-room/statements-releases/2023/04/13/fact-sheet-fact-sheet-president-biden-announces-plan-to-expand-health-coverage-to-daca-recipients/
Note: President Biden has signed legislation ending the COVID-19 national emergency. The legislation is here: https://www.congress.gov/bill/118th-congress/house-joint-resolution/7/text
FLSA-Third Circuit Rules On FSLA Matter Pertaining To Deductions From Accumulated Paid Time Off (Posted 5/24/2023)
In Higgins v. Bayada Home Heath Care Inc., No. 21-3286 (3d Cir. Mar. 15, 2023), the Third Circuit Court of Appeal says the following:
Stephanie Higgins and her co-plaintiffs, the appellants before us now, filed a collective action and putative class action alleging that their employer, Bayada Home Care, Inc., made improper deductions from their accumulated paid time off (which, with apologies for the several acronyms we are about to use, we join the parties in calling “PTO”). The plaintiffs argue that the deductions were effectively reductions in their salary and thus made in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and state employment laws, including, as relevant to Higgins, the Pennsylvania Minimum Wage Act (“PMWA”), 43 P.S. § 333.101, et seq. Their primary contention is that PTO qualifies as salary under the FLSA and its related regulations, and that, by deducting from their PTO, Bayada made deductions from their salary, which is something the FLSA and regulations forbid. The District Court saw a meaningful distinction between PTO and salary and so granted partial summary judgment for Bayada. The Court then certified its decision for immediate appeal. Whether PTO is part of an employee’s salary for the purposes of the FLSA is an issue of first impression for us. We hold, based on the plain meaning of the regulatory language promulgated under the FLSA, that PTO is not part of an employee’s salary. In short, we will affirm
The case may be found at: http://www2.ca3.uscourts.gov/opinarch/213286p.pdf
In Higgins v. Bayada Home Heath Care Inc., No. 21-3286 (3d Cir. Mar. 15, 2023), the Third Circuit Court of Appeal says the following:
Stephanie Higgins and her co-plaintiffs, the appellants before us now, filed a collective action and putative class action alleging that their employer, Bayada Home Care, Inc., made improper deductions from their accumulated paid time off (which, with apologies for the several acronyms we are about to use, we join the parties in calling “PTO”). The plaintiffs argue that the deductions were effectively reductions in their salary and thus made in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and state employment laws, including, as relevant to Higgins, the Pennsylvania Minimum Wage Act (“PMWA”), 43 P.S. § 333.101, et seq. Their primary contention is that PTO qualifies as salary under the FLSA and its related regulations, and that, by deducting from their PTO, Bayada made deductions from their salary, which is something the FLSA and regulations forbid. The District Court saw a meaningful distinction between PTO and salary and so granted partial summary judgment for Bayada. The Court then certified its decision for immediate appeal. Whether PTO is part of an employee’s salary for the purposes of the FLSA is an issue of first impression for us. We hold, based on the plain meaning of the regulatory language promulgated under the FLSA, that PTO is not part of an employee’s salary. In short, we will affirm
The case may be found at: http://www2.ca3.uscourts.gov/opinarch/213286p.pdf
Employee Benefits DOL Issues FAQs about Families First Coronavirus Response Act, Coronavirus Aid, Relief, and Economic Security Act, and Health Insurance Portability and Accountability Act Implementation Part 58 (Posted 5/23/2023)
Here is how the FAQs begin:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the Health Insurance Portability and Accountability Act (HIPAA). These FAQs have been prepared jointly by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments). These FAQs answer questions from stakeholders to help people understand the law and benefit from it, as intended. Previously issued FAQs are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs#Affordable_Care_Act.
On January 31, 2020, HHS Secretary Alex M. Azar II declared that a nationwide public health emergency has existed since January 27, 2020, as a result of the 2019 novel coronavirus, the virus that causes coronavirus disease-2019 (COVID-19) (referred to in this document as the PHE). This declaration was continually renewed, most recently by HHS Secretary Xavier Becerra, effective February 11, 2023. On January 30 and February 9, 2023, respectively, the Biden-Harris Administration and Secretary Becerra announced that they intend to end the National Emergency Concerning the Novel Coronavirus Disease 2019 (COVID-19) Pandemic (COVID-19 National Emergency) and the PHE, at the end of the day on May 11, 2023.
See the FAQs for details and footnotes . They may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58
Here is how the FAQs begin:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the Health Insurance Portability and Accountability Act (HIPAA). These FAQs have been prepared jointly by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments). These FAQs answer questions from stakeholders to help people understand the law and benefit from it, as intended. Previously issued FAQs are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs#Affordable_Care_Act.
On January 31, 2020, HHS Secretary Alex M. Azar II declared that a nationwide public health emergency has existed since January 27, 2020, as a result of the 2019 novel coronavirus, the virus that causes coronavirus disease-2019 (COVID-19) (referred to in this document as the PHE). This declaration was continually renewed, most recently by HHS Secretary Xavier Becerra, effective February 11, 2023. On January 30 and February 9, 2023, respectively, the Biden-Harris Administration and Secretary Becerra announced that they intend to end the National Emergency Concerning the Novel Coronavirus Disease 2019 (COVID-19) Pandemic (COVID-19 National Emergency) and the PHE, at the end of the day on May 11, 2023.
See the FAQs for details and footnotes . They may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58
ERISA-Eighth Circuit Upholds Denial Of Claim For Disability Pension Benefits (Posted 5/22/2023)
In Ruessler v. Boilermaker-Blacksmith Nat'l Pension Tr. Bd. of Trustees, No. 21-3876 (8th Cir. Apr. 3, 2023), the Eighth Circuit Court of Appeals says the following:
The Boilermaker-Blacksmith National Pension Trust Board of Trustees (“Board”) denied Adam Ruessler’s application for disability pension benefits under a plan governed by the Employee Retirement Income Security Act (“ERISA”), codified at 29 U.S.C. §§ 1001–1461. Ruessler argues the Board’s stated reason for denying his application was unreasonable, and the Board violated its fiduciary duties. The district court granted the Board’s motion for summary judgment. Ruessler appeals, and we affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/23/04/213876P.pdf
In Ruessler v. Boilermaker-Blacksmith Nat'l Pension Tr. Bd. of Trustees, No. 21-3876 (8th Cir. Apr. 3, 2023), the Eighth Circuit Court of Appeals says the following:
The Boilermaker-Blacksmith National Pension Trust Board of Trustees (“Board”) denied Adam Ruessler’s application for disability pension benefits under a plan governed by the Employee Retirement Income Security Act (“ERISA”), codified at 29 U.S.C. §§ 1001–1461. Ruessler argues the Board’s stated reason for denying his application was unreasonable, and the Board violated its fiduciary duties. The district court granted the Board’s motion for summary judgment. Ruessler appeals, and we affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/23/04/213876P.pdf
Employee Benefits-IRS Issues EP Examination Process Guide (Posted 5/19/2023)
The Guide begins as follows:
The Employee Plans Examination Process Guide clarifies the steps in the examination process and introduces resources for retirement plan compliance.
See the Guide for details. It may be found at: https://www.irs.gov/retirement-plans/ep-examination-process-guide
The Guide begins as follows:
The Employee Plans Examination Process Guide clarifies the steps in the examination process and introduces resources for retirement plan compliance.
- Section 1 – Overview of EP Examinations
- Section 2 – Initiation of an Examination
- Section 3 – Communications During Examination
- Section 4 – Audit Guidelines
- Section 5 – Resolution of Issues and Closing the Examination
- Section 6 – Appeals Process
See the Guide for details. It may be found at: https://www.irs.gov/retirement-plans/ep-examination-process-guide
Employee Benefits-IRS Issues Publication 939 (Rev. December 2022): General Rule for Pensions and Annuities (Posted 5/18/2023)
See the Publication 939 for details. It may be found here: https://www.irs.gov/pub/irs-prior/p939--2022.pdf
See the Publication 939 for details. It may be found here: https://www.irs.gov/pub/irs-prior/p939--2022.pdf
Employee Benefits-IRS Issues Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs), For Use In Preparing 2022 Returns (Posted 5/17/2023)
Here is What’s New for 2022:
Qualified Disaster tax relief. The special rules that provide for tax-favored withdrawals and repayments from certain qualified plans for taxpayers who suffered an economic loss as a result of a qualified disaster were made permanent by the SECURE 2.0 Act of 2022. A qualified disaster is a major disaster that occurred on or after January 26, 2021, and was declared by the President after December 27, 2020, under section 401 of the Robert T. Stafford Disaster Relief and Emergency Act. For more information, see Disaster-Related Relief in Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs).
Certain corrective distributions not subject to 10% early distribution tax. Beginning on December 29, 2022, the 10% additional tax on early distributions will not apply to a corrective IRA distribution, which consists of an excessive contribution (a contribution greater than the IRA contribution limit) and any earnings allocable to the excessive contribution, as long as the corrective distribution is made on or before the due date (including extensions) of the income tax return.
Statute of limitations rules changed for IRAs. Beginning on or after December 29, 2022, the statute of limitations for excess contributions and excess accumulations (resulting from distributions less than the required minimum distribution) is changed. Under the new rules, the statute of limitations is changed to provide relief to taxpayers not aware of the requirement to file Form 5329,
Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. If you are required to file a tax return, attach Form 5329 to your return. If you are not required to file a tax return, complete and file Form 5329 by itself. The period of limitations now begins for Form 5329 nonfilers when the individual files the income tax return for the year of the violation. If the individual is not required to file an income tax return for the year, the period of limitations is also triggered when the taxpayer would have been required to file, without regard to any extension. The new rules now extend the three-year limitations period to six-years for excess contributions when the income tax return triggers the period. However, filing the income tax return does not start the period (of limitations) where excise taxes on excess contributions are attributable to acquiring property for less than fair market value.
Modified AGI limit for traditional IRA contributions. For 2022, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:
• More than $109,000 but less than $129,000 for a married couple filing a joint return or a qualifying surviving spouse,
• More than $68,000 but less than $78,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.
Modified AGI limit for certain married individuals. If you are married and your spouse is covered by a retirement plan at work and you aren’t, and you live with your spouse or file a joint return, your deduction is phased out if your modified AGI is more than $204,000 (up from $198,000 for 2021) but less than $214,000 (up from $208,000 for 2021). If your modified AGI is $214,000 or more, you can’t take a deduction for contributions to a traditional IRA.
Modified AGI limit for Roth IRA contributions. For 2022, your Roth IRA contribution limit is reduced (phased out) in the following situations.
• Your filing status is married filing jointly or qualifying surviving spouse and your modified AGI is at least $204,000. You can’t make a Roth IRA contribution if your modified AGI is $214,000 or more.
• Your filing status is single, head of household, or married filing separately and you didn’t live with your spouse at any time in 2022 and your modified AGI is at least $129,000. You can’t make a Roth IRA contribution if your modified AGI is $144,000 or more.
• Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than zero. You can’t make a Roth IRA contribution if your modified AGI is $10,000 or more. W
Also, here is What’s New for 2023
IRA contribution limit increased. Beginning in 2023, the IRA contribution limit is increased to $6,500 ($7,500 for individuals age 50 or older) from $6,000 ($7,000 for individuals age 50 or older).
Increase in required minimum distribution (RMD) age. Individuals who reach age 72 after December 31, 2022, may delay receiving their RMDs until April 1 of the year following the year in which they turn age 73.
Modified AGI limit for traditional IRA contributions increased. For 2023, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:
• More than $116,000 but less than $136,000 for a married couple filing a joint return or a qualifying surviving spouse,
• More than $73,000 but less than $83,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.
Modified AGI limit for certain married individuals increased. If you are married and your spouse is covered by a retirement plan at work and you aren’t, and you live with your spouse or file a joint return, your deduction is phased out if your modified AGI is more than $218,000 (up from $204,000 for 2022) but less than $228,000 (up from $214,000 for 2022). If your modified AGI is $228,000 or more, you can’t take a deduction for contributions to a traditional IRA.
Modified AGI limit for Roth IRA contributions increased. For 2023, your Roth IRA contribution limit is reduced (phased out) in the following situations.
• Your filing status is married filing jointly or qualifying surviving spouse and your modified AGI is at least $218,000. You can’t make a Roth IRA contribution if your modified AGI is $228,000 or more.
• Your filing status is single, head of household, or married filing separately and you didn’t live with your spouse at any time in 2023 and your modified AGI is at least $138,000. You can’t make a Roth IRA contribution if your modified AGI is $153,000 or more.
• Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than zero. You can’t make a Roth IRA contribution if your modified AGI is $10,000 or more.
See the Publication 590-A for details. It may be found here: https://www.irs.gov/pub/irs-prior/p590a--2022.pdf
Here is What’s New for 2022:
Qualified Disaster tax relief. The special rules that provide for tax-favored withdrawals and repayments from certain qualified plans for taxpayers who suffered an economic loss as a result of a qualified disaster were made permanent by the SECURE 2.0 Act of 2022. A qualified disaster is a major disaster that occurred on or after January 26, 2021, and was declared by the President after December 27, 2020, under section 401 of the Robert T. Stafford Disaster Relief and Emergency Act. For more information, see Disaster-Related Relief in Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs).
Certain corrective distributions not subject to 10% early distribution tax. Beginning on December 29, 2022, the 10% additional tax on early distributions will not apply to a corrective IRA distribution, which consists of an excessive contribution (a contribution greater than the IRA contribution limit) and any earnings allocable to the excessive contribution, as long as the corrective distribution is made on or before the due date (including extensions) of the income tax return.
Statute of limitations rules changed for IRAs. Beginning on or after December 29, 2022, the statute of limitations for excess contributions and excess accumulations (resulting from distributions less than the required minimum distribution) is changed. Under the new rules, the statute of limitations is changed to provide relief to taxpayers not aware of the requirement to file Form 5329,
Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. If you are required to file a tax return, attach Form 5329 to your return. If you are not required to file a tax return, complete and file Form 5329 by itself. The period of limitations now begins for Form 5329 nonfilers when the individual files the income tax return for the year of the violation. If the individual is not required to file an income tax return for the year, the period of limitations is also triggered when the taxpayer would have been required to file, without regard to any extension. The new rules now extend the three-year limitations period to six-years for excess contributions when the income tax return triggers the period. However, filing the income tax return does not start the period (of limitations) where excise taxes on excess contributions are attributable to acquiring property for less than fair market value.
Modified AGI limit for traditional IRA contributions. For 2022, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:
• More than $109,000 but less than $129,000 for a married couple filing a joint return or a qualifying surviving spouse,
• More than $68,000 but less than $78,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.
Modified AGI limit for certain married individuals. If you are married and your spouse is covered by a retirement plan at work and you aren’t, and you live with your spouse or file a joint return, your deduction is phased out if your modified AGI is more than $204,000 (up from $198,000 for 2021) but less than $214,000 (up from $208,000 for 2021). If your modified AGI is $214,000 or more, you can’t take a deduction for contributions to a traditional IRA.
Modified AGI limit for Roth IRA contributions. For 2022, your Roth IRA contribution limit is reduced (phased out) in the following situations.
• Your filing status is married filing jointly or qualifying surviving spouse and your modified AGI is at least $204,000. You can’t make a Roth IRA contribution if your modified AGI is $214,000 or more.
• Your filing status is single, head of household, or married filing separately and you didn’t live with your spouse at any time in 2022 and your modified AGI is at least $129,000. You can’t make a Roth IRA contribution if your modified AGI is $144,000 or more.
• Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than zero. You can’t make a Roth IRA contribution if your modified AGI is $10,000 or more. W
Also, here is What’s New for 2023
IRA contribution limit increased. Beginning in 2023, the IRA contribution limit is increased to $6,500 ($7,500 for individuals age 50 or older) from $6,000 ($7,000 for individuals age 50 or older).
Increase in required minimum distribution (RMD) age. Individuals who reach age 72 after December 31, 2022, may delay receiving their RMDs until April 1 of the year following the year in which they turn age 73.
Modified AGI limit for traditional IRA contributions increased. For 2023, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:
• More than $116,000 but less than $136,000 for a married couple filing a joint return or a qualifying surviving spouse,
• More than $73,000 but less than $83,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.
Modified AGI limit for certain married individuals increased. If you are married and your spouse is covered by a retirement plan at work and you aren’t, and you live with your spouse or file a joint return, your deduction is phased out if your modified AGI is more than $218,000 (up from $204,000 for 2022) but less than $228,000 (up from $214,000 for 2022). If your modified AGI is $228,000 or more, you can’t take a deduction for contributions to a traditional IRA.
Modified AGI limit for Roth IRA contributions increased. For 2023, your Roth IRA contribution limit is reduced (phased out) in the following situations.
• Your filing status is married filing jointly or qualifying surviving spouse and your modified AGI is at least $218,000. You can’t make a Roth IRA contribution if your modified AGI is $228,000 or more.
• Your filing status is single, head of household, or married filing separately and you didn’t live with your spouse at any time in 2023 and your modified AGI is at least $138,000. You can’t make a Roth IRA contribution if your modified AGI is $153,000 or more.
• Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than zero. You can’t make a Roth IRA contribution if your modified AGI is $10,000 or more.
See the Publication 590-A for details. It may be found here: https://www.irs.gov/pub/irs-prior/p590a--2022.pdf
Employee Benefits-IRS Issues Instructions for Form 8915-F (Rev. January 2023): Qualified Disaster Retirement Plan Distributions and Repayments (Posted 5/16/2023)
Here is What’s New:
Qualified 2021 and later disaster distributions (also known as qualified disaster recovery distributions). As a result of section 331 of the Secure 2.0 Act of 2022, enacted December 29, 2022, you are now eligible for the benefits of Form 8915-F if you were adversely affected by a qualified 2021 or later disaster and you received a distribution described in Qualified Disaster Distribution Requirements or Qualified Distribution Requirements, later. Qualified disaster distributions (such as qualified 2021 disaster distributions, qualified 2022 disaster distributions, qualified 2023 disaster distributions, etc.) are also called qualified disaster recovery distributions.
Dollar limit. For qualified 2021 and later disasters, the dollar limit on Form 8915-F for retirement plan distributions is $22,000 per disaster. It was $100,000 but that was for qualified 2020 disasters.
Determining the qualified disaster distribution period, in Part I, for a disaster. The qualified disaster distribution period for each disaster still begins on the day the disaster began. The last day of the qualified disaster distribution period for most qualified 2021 disasters and many qualified 2022 disasters is June 26, 2023. But the last day of the qualified disaster distribution period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the qualified distribution repayment period, in Part IV, for a disaster. The qualified distribution repayment period for each disaster still begins on the day the disaster began. The last day of the qualified distribution repayment period for most qualified 2021 disasters and many qualified 2022 disasters is June 27, 2023. But the last day of the qualified distribution repayment period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the disaster's FEMA number and other information. Appendix B, Qualified Disaster Areas by Year, is being discontinued. See Qualified disaster area, later, for information on where to find a disaster’s FEMA number, beginning date, and declaration date.
New line 1a. New Line 1a explains the criteria set forth in Form 8915-F, line 1a, including “If all of the distributions for this year occurred within the qualified disaster distribution period for each of the disasters listed” in the table at the top of Part I.
New Worksheet 1B. New Worksheet 1B is a tool you may have to use in figuring amounts for lines 1a through 5 of Form 8915-F. See Worksheet 1B, later, to determine whether you must use Worksheet 1B. You can choose to use Worksheet 1B even if you are not required to do so.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-prior/i8915f--2023.pdf
Here is What’s New:
Qualified 2021 and later disaster distributions (also known as qualified disaster recovery distributions). As a result of section 331 of the Secure 2.0 Act of 2022, enacted December 29, 2022, you are now eligible for the benefits of Form 8915-F if you were adversely affected by a qualified 2021 or later disaster and you received a distribution described in Qualified Disaster Distribution Requirements or Qualified Distribution Requirements, later. Qualified disaster distributions (such as qualified 2021 disaster distributions, qualified 2022 disaster distributions, qualified 2023 disaster distributions, etc.) are also called qualified disaster recovery distributions.
Dollar limit. For qualified 2021 and later disasters, the dollar limit on Form 8915-F for retirement plan distributions is $22,000 per disaster. It was $100,000 but that was for qualified 2020 disasters.
Determining the qualified disaster distribution period, in Part I, for a disaster. The qualified disaster distribution period for each disaster still begins on the day the disaster began. The last day of the qualified disaster distribution period for most qualified 2021 disasters and many qualified 2022 disasters is June 26, 2023. But the last day of the qualified disaster distribution period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the qualified distribution repayment period, in Part IV, for a disaster. The qualified distribution repayment period for each disaster still begins on the day the disaster began. The last day of the qualified distribution repayment period for most qualified 2021 disasters and many qualified 2022 disasters is June 27, 2023. But the last day of the qualified distribution repayment period for qualified 2023 and later disasters, some qualified 2022 disasters, and perhaps even a few qualified 2021 disasters will have to be separately calculated. See Qualified disaster distribution period, later.
Determining the disaster's FEMA number and other information. Appendix B, Qualified Disaster Areas by Year, is being discontinued. See Qualified disaster area, later, for information on where to find a disaster’s FEMA number, beginning date, and declaration date.
New line 1a. New Line 1a explains the criteria set forth in Form 8915-F, line 1a, including “If all of the distributions for this year occurred within the qualified disaster distribution period for each of the disasters listed” in the table at the top of Part I.
New Worksheet 1B. New Worksheet 1B is a tool you may have to use in figuring amounts for lines 1a through 5 of Form 8915-F. See Worksheet 1B, later, to determine whether you must use Worksheet 1B. You can choose to use Worksheet 1B even if you are not required to do so.
See the Instructions for details. They may be found at: https://www.irs.gov/pub/irs-prior/i8915f--2023.pdf
Benefits-Treasury Issues Fact Sheet On 2023 Social Security and Medicare Trustees Reports (Posted 5/15/2023)
The Fact Sheet begins as follows:
The Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs each year. This document summarizes the findings of the 2023 reports. As in prior years, we found that the Social Security and Medicare programs both continue to face significant financing issues.
See the Fact Sheet for details. It may be found at: https://home.treasury.gov/system/files/136/TR-2023-Fact-Sheet.pdf
The Fact Sheet begins as follows:
The Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs each year. This document summarizes the findings of the 2023 reports. As in prior years, we found that the Social Security and Medicare programs both continue to face significant financing issues.
See the Fact Sheet for details. It may be found at: https://home.treasury.gov/system/files/136/TR-2023-Fact-Sheet.pdf
Health Care-HHS Issues Fact Sheet On The End Of The COVID-19 Public Health Emergency (Posted 5/12/2023)
The Fact Sheet begins as follows:
Based on current COVID-19 trends, the Department of Health and Human Services (HHS) is planning for the federal Public Health Emergency (PHE) for COVID-19, declared under Section 319 of the Public Health Service (PHS) Act, to expire at the end of the day on May 11, 2023.
Since HHS Secretary Xavier Becerra’s February 9, 2023, letter to Governors announcing the planned end of the COVID-19 PHE, the Department has been working closely with partners—including Governors; state, local, Tribal, and territorial agencies; industry; and advocates—to ensure an orderly transition out of the COVID-19 PHE.
Today, HHS is releasing a Fact Sheet with an update on current flexibilities enabled by the COVID-19 emergency declaration and how they will be impacted by the end of the COVID-19 PHE on May 11.
See the Fact Sheet for details. It may be found here: https://www.hhs.gov/about/news/2023/05/09/fact-sheet-end-of-the-covid-19-public-health-emergency.html
The Fact Sheet begins as follows:
Based on current COVID-19 trends, the Department of Health and Human Services (HHS) is planning for the federal Public Health Emergency (PHE) for COVID-19, declared under Section 319 of the Public Health Service (PHS) Act, to expire at the end of the day on May 11, 2023.
Since HHS Secretary Xavier Becerra’s February 9, 2023, letter to Governors announcing the planned end of the COVID-19 PHE, the Department has been working closely with partners—including Governors; state, local, Tribal, and territorial agencies; industry; and advocates—to ensure an orderly transition out of the COVID-19 PHE.
Today, HHS is releasing a Fact Sheet with an update on current flexibilities enabled by the COVID-19 emergency declaration and how they will be impacted by the end of the COVID-19 PHE on May 11.
See the Fact Sheet for details. It may be found here: https://www.hhs.gov/about/news/2023/05/09/fact-sheet-end-of-the-covid-19-public-health-emergency.html
Health Care-CMS Releases Updated (On March 3, 2023) Prescription Drug Data Collection (RxDC) Reporting Instructions, Containing Section 204 Data Submission Instructions for the 2022 Reference Year (Posted 5/11/2023)
See the Instructions for details. They may be found at: https://regtap.cms.gov/reg_librarye.php?i=3860
See the Instructions for details. They may be found at: https://regtap.cms.gov/reg_librarye.php?i=3860
Employment- Sixth Circuit Upholds Claim That Termination Violated FMLA (Posted 5/10/2023)
In Milman v. Fieger & Fieger PC, No. 21-2685 (6th Cir. Jan. 25, 2023), the Sixth Circuit Court of Appeals says the following:
In March 2020, Fieger & Fieger, P.C., terminated Polina Milman immediately after she made a request for unpaid leave to care for her two-year old son—a child with a history of respiratory illness that was experiencing symptoms resembling COVID-19. Milman sued Fieger & Fieger, P.C., and its owner, Geoffrey Fieger (collectively, the Firm), alleging that her termination violated the Family and Medical Leave Act (FMLA). The district court dismissed Milman’s FMLA claim, concluding that because she was not entitled to the leave she sought, she could not state a plausible claim. For the reasons that follow, we REVERSE and REMAND for further proceedings.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0014p-06.pdf
In Milman v. Fieger & Fieger PC, No. 21-2685 (6th Cir. Jan. 25, 2023), the Sixth Circuit Court of Appeals says the following:
In March 2020, Fieger & Fieger, P.C., terminated Polina Milman immediately after she made a request for unpaid leave to care for her two-year old son—a child with a history of respiratory illness that was experiencing symptoms resembling COVID-19. Milman sued Fieger & Fieger, P.C., and its owner, Geoffrey Fieger (collectively, the Firm), alleging that her termination violated the Family and Medical Leave Act (FMLA). The district court dismissed Milman’s FMLA claim, concluding that because she was not entitled to the leave she sought, she could not state a plausible claim. For the reasons that follow, we REVERSE and REMAND for further proceedings.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0014p-06.pdf
ERISA-District Court Finds That Plaintiffs Have A Plausible Claim For Breach of ERISA Fiduciary Duty By Failing To Control Recordkeeping And Administrative Costs (Posted 5/9/2023)
In Lucero v. Credit Union Retirement Plan Assoc., No. 22-208 (W.D. Wis. Mar. 9, 2023), the District Court says the following:
Plaintiffs are four participants in the Credit Union Retirement Plan Association 401(k) Plan, a multiple-employer plan with more than 20,000 participants and $1.5 billion in assets. Plaintiffs contend that the entities responsible for investing the Plan’s assets are violating the Employee Retirement Income Security Act (ERISA) by breaching their fiduciary duties to plan participants. Specifically, plaintiffs say that defendants are failing to control the Plan’s recordkeeping and administrative costs. Defendants move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), contending that plaintiffs haven’t alleged enough facts to support their claims. For the reasons explained below, the court concludes that plaintiffs have stated a plausible claim, so the motion to dismiss will be denied.
The case may be found at: https://benefitslink.com/src/ctop/lucero-v-credit-union-wdwis-03092023.pdf
In Lucero v. Credit Union Retirement Plan Assoc., No. 22-208 (W.D. Wis. Mar. 9, 2023), the District Court says the following:
Plaintiffs are four participants in the Credit Union Retirement Plan Association 401(k) Plan, a multiple-employer plan with more than 20,000 participants and $1.5 billion in assets. Plaintiffs contend that the entities responsible for investing the Plan’s assets are violating the Employee Retirement Income Security Act (ERISA) by breaching their fiduciary duties to plan participants. Specifically, plaintiffs say that defendants are failing to control the Plan’s recordkeeping and administrative costs. Defendants move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), contending that plaintiffs haven’t alleged enough facts to support their claims. For the reasons explained below, the court concludes that plaintiffs have stated a plausible claim, so the motion to dismiss will be denied.
The case may be found at: https://benefitslink.com/src/ctop/lucero-v-credit-union-wdwis-03092023.pdf
ERISA-Seventh Circuit Rules That Certain ERISA Claim Of Breach Of Fiduciary Duty Of Prudence Survive Dismissal (Posted 5/8/2023)
In Divane v. Northwestern University, No. 18-2569 (7th Cir. 3/23/2023), the Seventh Circuit Court of Appeals says the following:
On remand from Hughes v. Northwestern University, 142 S. Ct. 737 (2022), we reexamine plaintiffs’ allegations that plan fiduciary Northwestern breached its duty of prudence under the Employee Retirement Income Security Act, 29 U.S.C. § 1104(a). Following Hughes, we discern three claims of breach that require reconsideration: that Northwestern (1) failed to monitor and incurred excessive recordkeeping fees, (2) failed to swap out retail shares for cheaper but otherwise identical institutional shares, and (3) retained duplicative funds. We conclude that the first two claims survive dismissal and remand them for further proceedings. For all other claims and issues, we reinstate this court’s prior judgment in Divane v. Northwestern University, 953 F.3d 980 (7th Cir. 2020).
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca7/18-2569/18-2569-2023-03-23.pdf?ts=1679607018
In Divane v. Northwestern University, No. 18-2569 (7th Cir. 3/23/2023), the Seventh Circuit Court of Appeals says the following:
On remand from Hughes v. Northwestern University, 142 S. Ct. 737 (2022), we reexamine plaintiffs’ allegations that plan fiduciary Northwestern breached its duty of prudence under the Employee Retirement Income Security Act, 29 U.S.C. § 1104(a). Following Hughes, we discern three claims of breach that require reconsideration: that Northwestern (1) failed to monitor and incurred excessive recordkeeping fees, (2) failed to swap out retail shares for cheaper but otherwise identical institutional shares, and (3) retained duplicative funds. We conclude that the first two claims survive dismissal and remand them for further proceedings. For all other claims and issues, we reinstate this court’s prior judgment in Divane v. Northwestern University, 953 F.3d 980 (7th Cir. 2020).
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca7/18-2569/18-2569-2023-03-23.pdf?ts=1679607018
ERISA-President Vetoes House Resolution Disapproving Of The DOL’s Final Rule Titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.” (Posted 5/4/2023)
Here is the Veto:
To the House of Representatives:
I am returning herewith without my approval H.J. Res. 30, a resolution that would disapprove of the Department of Labor’s final rule titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.”
The Department of Labor’s final rule protects the hard‑earned life savings and pensions of tens of millions of workers and retirees across the country. It allows retirement plan fiduciaries to make fully informed investment decisions by considering all relevant factors that might impact a prospective investment, while ensuring that investment decisions made by retirement plan fiduciaries maximize financial returns for retirees.
There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses. But the Republican-led resolution would force retirement managers to ignore these relevant risk factors, disregarding the principles of free markets and jeopardizing the life savings of working families and retirees. In fact, this resolution would prevent retirement plan fiduciaries from taking into account factors, such as the physical risks of climate change and poor corporate governance, that could affect investment returns.
Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country. That is not controversial — that is common sense.
Therefore, I am vetoing this resolution.
JOSEPH R. BIDEN JR.
THE WHITE HOUSE,
March 20, 2023.
The Veto may be found at: https://www.whitehouse.gov/briefing-room/presidential-actions/2023/03/20/message-to-the-house-of-representatives-presidents-veto-of-h-j-res-30/
H.J. Res. 30 may be found at: https://www.congress.gov/bill/118th-congress/house-joint-resolution/30
Here is the Veto:
To the House of Representatives:
I am returning herewith without my approval H.J. Res. 30, a resolution that would disapprove of the Department of Labor’s final rule titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.”
The Department of Labor’s final rule protects the hard‑earned life savings and pensions of tens of millions of workers and retirees across the country. It allows retirement plan fiduciaries to make fully informed investment decisions by considering all relevant factors that might impact a prospective investment, while ensuring that investment decisions made by retirement plan fiduciaries maximize financial returns for retirees.
There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses. But the Republican-led resolution would force retirement managers to ignore these relevant risk factors, disregarding the principles of free markets and jeopardizing the life savings of working families and retirees. In fact, this resolution would prevent retirement plan fiduciaries from taking into account factors, such as the physical risks of climate change and poor corporate governance, that could affect investment returns.
Retirement plan fiduciaries should be able to consider any factor that maximizes financial returns for retirees across the country. That is not controversial — that is common sense.
Therefore, I am vetoing this resolution.
JOSEPH R. BIDEN JR.
THE WHITE HOUSE,
March 20, 2023.
The Veto may be found at: https://www.whitehouse.gov/briefing-room/presidential-actions/2023/03/20/message-to-the-house-of-representatives-presidents-veto-of-h-j-res-30/
H.J. Res. 30 may be found at: https://www.congress.gov/bill/118th-congress/house-joint-resolution/30
Employee Benefits-IRS Issues Text Of Publication 590-B:Distributions From Individual Retirement Arrangements (IRAs) For Use In Preparing 2022 Returns (Posted 5/4/2023)
Here is What’s New for the Publication:
Disaster tax relief. The special rules that provide for tax-favored withdrawals and repayments now apply to disasters that occur on or after January 26, 2021. For more information see Disaster-Related Relief. Excise tax relief for certain 2022 required minimum distributions. The IRS will not assert an excise tax in 2022 for missed RMDs if certain requirements are met. See Notice 2022-53 available at https://www.irs.gov/irb/ 2022-45_IRB#NOT-2022-53, for details.
Required minimum distributions (RMDs). Individuals who reach age 72 after December 31, 2022, may delay receiving their RMDs until April 1 of the year following the year in which they turn age 73.
Qualified charitable distribution one-time election. Beginning in tax years beginning after December 30, 2022, you can elect to make a one-time distribution of up to $50,000 from an individual retirement account to charities through a charitable remainder trust, a charitable remainder unitrust, or a charitable gift annuity funded only by qualified charitable distributions. Also, for tax years beginning after 2023, this $50,000 one-time election amount and the $100,000 annual IRA charitable distribution limit will be adjusted for inflation. For more information see Qualified charitable distributions (QCDs).
Certain corrective distributions not subject to 10% early distribution tax. Beginning with distributions made on December 29, 2022, and after, the 10% additional tax on early distributions will not apply to a corrective IRA distribution, which consists of an excessive contribution (a contribution greater than the IRA contribution limit) and any earnings (the portion of the distribution subject to the 10% additional tax) allocable to the excessive contribution, as long as the corrective distribution is made on or before the due date (including extensions) of the income tax return.
Substantially equal payments clarified. Distributions received as periodic payments on or after December 29, 2022, will not fail to be treated as substantially equal merely because they are received as an annuity.
Excise tax rate for excess accumulations reduced. The excise tax rate for distributions that are less the required minimum distribution amount (excess accumulations) is reduced to 25% for tax years beginning in 2023 and after. You may be able to take a reduced excise tax rate of 10% of the amount not distributed, if, during the correction window, you take a distribution of the amount on which the tax is due and submit a tax return reflecting this excise tax. The “correction window” is the period of time beginning on the date on which the excise tax is imposed on the distribution shortfall and ends on the earliest of the following dates:
• The date of mailing the deficiency notice with respect to the imposition of this tax; or • The date the tax is assessed; or
• The last day of the second taxable year that begins after the date of the taxable year in which the excise tax is imposed.
Distributions to terminally ill individuals. The exception to the 10% additional tax for early distributions is expanded to apply to distributions made to terminally ill individuals on or after December 30, 2022. See Terminally ill individuals, for more information.
Tax treatment of IRA involved in a prohibited transaction. Beginning in 2023, if an IRA owner or beneficiary engages in a prohibited transaction with respect to one of their multiple IRAs, only the IRA used in the prohibited transaction is disqualified and treated as distributed to the owner or beneficiary.
See Publication 590-B for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p590b.pdf
Here is What’s New for the Publication:
Disaster tax relief. The special rules that provide for tax-favored withdrawals and repayments now apply to disasters that occur on or after January 26, 2021. For more information see Disaster-Related Relief. Excise tax relief for certain 2022 required minimum distributions. The IRS will not assert an excise tax in 2022 for missed RMDs if certain requirements are met. See Notice 2022-53 available at https://www.irs.gov/irb/ 2022-45_IRB#NOT-2022-53, for details.
Required minimum distributions (RMDs). Individuals who reach age 72 after December 31, 2022, may delay receiving their RMDs until April 1 of the year following the year in which they turn age 73.
Qualified charitable distribution one-time election. Beginning in tax years beginning after December 30, 2022, you can elect to make a one-time distribution of up to $50,000 from an individual retirement account to charities through a charitable remainder trust, a charitable remainder unitrust, or a charitable gift annuity funded only by qualified charitable distributions. Also, for tax years beginning after 2023, this $50,000 one-time election amount and the $100,000 annual IRA charitable distribution limit will be adjusted for inflation. For more information see Qualified charitable distributions (QCDs).
Certain corrective distributions not subject to 10% early distribution tax. Beginning with distributions made on December 29, 2022, and after, the 10% additional tax on early distributions will not apply to a corrective IRA distribution, which consists of an excessive contribution (a contribution greater than the IRA contribution limit) and any earnings (the portion of the distribution subject to the 10% additional tax) allocable to the excessive contribution, as long as the corrective distribution is made on or before the due date (including extensions) of the income tax return.
Substantially equal payments clarified. Distributions received as periodic payments on or after December 29, 2022, will not fail to be treated as substantially equal merely because they are received as an annuity.
Excise tax rate for excess accumulations reduced. The excise tax rate for distributions that are less the required minimum distribution amount (excess accumulations) is reduced to 25% for tax years beginning in 2023 and after. You may be able to take a reduced excise tax rate of 10% of the amount not distributed, if, during the correction window, you take a distribution of the amount on which the tax is due and submit a tax return reflecting this excise tax. The “correction window” is the period of time beginning on the date on which the excise tax is imposed on the distribution shortfall and ends on the earliest of the following dates:
• The date of mailing the deficiency notice with respect to the imposition of this tax; or • The date the tax is assessed; or
• The last day of the second taxable year that begins after the date of the taxable year in which the excise tax is imposed.
Distributions to terminally ill individuals. The exception to the 10% additional tax for early distributions is expanded to apply to distributions made to terminally ill individuals on or after December 30, 2022. See Terminally ill individuals, for more information.
Tax treatment of IRA involved in a prohibited transaction. Beginning in 2023, if an IRA owner or beneficiary engages in a prohibited transaction with respect to one of their multiple IRAs, only the IRA used in the prohibited transaction is disqualified and treated as distributed to the owner or beneficiary.
See Publication 590-B for details. It may be found here: https://www.irs.gov/pub/irs-pdf/p590b.pdf
ERISA-Second Circuit Upholds Claims For Miscalculation Of Benefits (Posted 5/3/2023)
In McCutcheon v. Colgate-Palmolive Co., No. 20-3225 (2d Cir. Mar. 13, 2023), the Second Circuit Court of Appeals says the following:
Plaintiffs-appellees brought this class action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., arguing, inter alia, that defendant-appellant Colgate-Palmolive Co. miscalculated residual annuities based on an erroneous interpretation of its retirement income plan and improperly used a pre-retirement mortality discount to calculate residual annuities, thereby working an impermissible forfeiture of benefits under ERISA. The district court granted summary judgment to plaintiffs-appellees on these claims. For the reasons set forth below, we agree. We therefore AFFIRM the district court's order and final judgment.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca2/20-3225/20-3225-2023-03-13.pdf
In McCutcheon v. Colgate-Palmolive Co., No. 20-3225 (2d Cir. Mar. 13, 2023), the Second Circuit Court of Appeals says the following:
Plaintiffs-appellees brought this class action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., arguing, inter alia, that defendant-appellant Colgate-Palmolive Co. miscalculated residual annuities based on an erroneous interpretation of its retirement income plan and improperly used a pre-retirement mortality discount to calculate residual annuities, thereby working an impermissible forfeiture of benefits under ERISA. The district court granted summary judgment to plaintiffs-appellees on these claims. For the reasons set forth below, we agree. We therefore AFFIRM the district court's order and final judgment.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca2/20-3225/20-3225-2023-03-13.pdf
Employee Benefits-DOL Provides Some Guidance On Equal Pay And Retirement Savings (Posted 5/2/2023)
In this Guidance. The DOL says the following:
On average, women who work full-time year-round are paid 84 cents for every dollar a man makes, with the gap shifting based on age, race/ethnicity and other factors. The difference between women’s and men’s salaries means more than lower take-home pay – it also means women have less money they can save towards their retirement.
Women also face other challenges to saving for a secure retirement. Women live almost three years longer than men, so they need to plan for additional years of retirement savings. They are more likely than men to reduce their work hours to take care of children or other family members, which can reduce earnings and retirement savings. They also often work for employers that don’t offer a retirement plan or work part-time – 30 percent of working women are in part-time employment, compared to 19 percent of men -- so they may not be eligible to participate in a retirement plan offered through their employment.
While we continue to address these challenges, women can take personal action to make the most of their money. Putting aside even a little will make a difference over time.
Here are some steps to help you start saving for retirement:
• Get information about any retirement plan that might be available to you through your employment. Some employers may offer a pension that will provide you a specific monthly benefit upon retirement, depending on the terms of the plan and how long you work for the employer. You may also be eligible to participate in a 401(k) plan or other individual account retirement plan through your job that you may be able to contribute to and your employer may contribute to on your behalf as well. If you participate in your employment-based retirement plan and can contribute, contribute as much as you can! If you don’t participate, sign up. Many employers who offer a 401(k) plan match a percentage of your contribution – it’s like getting free money! Ask your employer (or your union, if you are represented by one) for more information or call us at 1-800-ASK-EBSA.
• You may be near retirement but do not have enough retirement savings to support yourself for a retirement that could last 30 years or more. It’s not too late to start. If you are age 50 or over, you can make additional contributions to your 401(k) or individual account plan to “catch up” on your savings. Again, ask your employer or your union to learn more about this, or call EBSA.
• If you don’t participate in a retirement plan through your employment, you can save for retirement by contributing to an Individual Retirement Account (IRA).
• Include allocating something towards the retirement part of your budget, even if it is a small amount. Establishing a budget can help you manage your spending to help you find where and how much you can save.
• If you are getting a divorce, talk to your attorney about a qualified domestic relations order. You may have rights to a portion of your spouse’s retirement benefits, and you need to understand your rights and whether you need certain paperwork in place to protect your access to a portion of your spouse’s pension.
The keys are to understand what is available to you for retirement and to make saving a habit. It can be hard to think about putting aside money you won’t use for years, and it can be a struggle to save when you are faced with challenges and competing responsibilities. Planning for retirement is an important part of your financial freedom. And remember - it’s never too late to start. Small amounts of savings grow over time!
For more information on ways to achieve a secure retirement and other financial goals, you can visit EBSA’s website at dol.gov/ebsa and read the publications Savings Fitness: A Guide to Your Retirement and Your Financial Future and Taking the Mystery out of Retirement.
The Guidance may be found at: https://blog.dol.gov/2023/03/21/equal-pay-and-retirement-savings
In this Guidance. The DOL says the following:
On average, women who work full-time year-round are paid 84 cents for every dollar a man makes, with the gap shifting based on age, race/ethnicity and other factors. The difference between women’s and men’s salaries means more than lower take-home pay – it also means women have less money they can save towards their retirement.
Women also face other challenges to saving for a secure retirement. Women live almost three years longer than men, so they need to plan for additional years of retirement savings. They are more likely than men to reduce their work hours to take care of children or other family members, which can reduce earnings and retirement savings. They also often work for employers that don’t offer a retirement plan or work part-time – 30 percent of working women are in part-time employment, compared to 19 percent of men -- so they may not be eligible to participate in a retirement plan offered through their employment.
While we continue to address these challenges, women can take personal action to make the most of their money. Putting aside even a little will make a difference over time.
Here are some steps to help you start saving for retirement:
• Get information about any retirement plan that might be available to you through your employment. Some employers may offer a pension that will provide you a specific monthly benefit upon retirement, depending on the terms of the plan and how long you work for the employer. You may also be eligible to participate in a 401(k) plan or other individual account retirement plan through your job that you may be able to contribute to and your employer may contribute to on your behalf as well. If you participate in your employment-based retirement plan and can contribute, contribute as much as you can! If you don’t participate, sign up. Many employers who offer a 401(k) plan match a percentage of your contribution – it’s like getting free money! Ask your employer (or your union, if you are represented by one) for more information or call us at 1-800-ASK-EBSA.
• You may be near retirement but do not have enough retirement savings to support yourself for a retirement that could last 30 years or more. It’s not too late to start. If you are age 50 or over, you can make additional contributions to your 401(k) or individual account plan to “catch up” on your savings. Again, ask your employer or your union to learn more about this, or call EBSA.
• If you don’t participate in a retirement plan through your employment, you can save for retirement by contributing to an Individual Retirement Account (IRA).
• Include allocating something towards the retirement part of your budget, even if it is a small amount. Establishing a budget can help you manage your spending to help you find where and how much you can save.
• If you are getting a divorce, talk to your attorney about a qualified domestic relations order. You may have rights to a portion of your spouse’s retirement benefits, and you need to understand your rights and whether you need certain paperwork in place to protect your access to a portion of your spouse’s pension.
The keys are to understand what is available to you for retirement and to make saving a habit. It can be hard to think about putting aside money you won’t use for years, and it can be a struggle to save when you are faced with challenges and competing responsibilities. Planning for retirement is an important part of your financial freedom. And remember - it’s never too late to start. Small amounts of savings grow over time!
For more information on ways to achieve a secure retirement and other financial goals, you can visit EBSA’s website at dol.gov/ebsa and read the publications Savings Fitness: A Guide to Your Retirement and Your Financial Future and Taking the Mystery out of Retirement.
The Guidance may be found at: https://blog.dol.gov/2023/03/21/equal-pay-and-retirement-savings
Health Care-Government Issues Federal Independent Dispute Resolution (IDR) Process Guidance For Certified IDR Entities (Posted 5/1/2023)
Here is how the Guidance begins:
This guidance document is effective for payment determinations made on or after February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 by an out-of-network provider subject to the Requirements Related to Surprise Billing; Part II, 86 FR 55980, and Requirements Related to Surprise Billing; Final Rule, 87 FR 52618. Payment determinations made before February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued October 31, 2022 available here. Items and services furnished before October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued October 7, 2022 available here. Please visit www.cms.gov/nosurprises for the most current guidance documents related to the Federal IDR Process.
See the Guidance for details. It may be found here: https://www.cms.gov/files/document/federal-idr-guidance-idr-entities-march-2023.pdf
Here is how the Guidance begins:
This guidance document is effective for payment determinations made on or after February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 by an out-of-network provider subject to the Requirements Related to Surprise Billing; Part II, 86 FR 55980, and Requirements Related to Surprise Billing; Final Rule, 87 FR 52618. Payment determinations made before February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued October 31, 2022 available here. Items and services furnished before October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued October 7, 2022 available here. Please visit www.cms.gov/nosurprises for the most current guidance documents related to the Federal IDR Process.
See the Guidance for details. It may be found here: https://www.cms.gov/files/document/federal-idr-guidance-idr-entities-march-2023.pdf
Health Care-Government Issues Federal Independent Dispute Resolution (IDR) Process Guidance For Disputing Parties (Posted 4/28/2023)
Here is how the Guidance begins:
This guidance document is effective for payment determinations made on or after February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 by an out-of-network provider subject to the Requirements Related to Surprise Billing; Part II, 86 FR 55980, and Requirements Related to Surprise Billing; Final Rule, 87 FR 52618. Payment determinations made before February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued on October 31, 2022 and available here. Payment determinations made before February 6, 2023 for items and services furnished before October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued on October 7, 2022, effective July 26, 2022 available here. Please visit www.cms.gov/nosurprises for the most current guidance documents related to the Federal IDR Process.
See the Guidance for details. It may be found here: https://www.cms.gov/files/document/federal-idr-guidance-disputing-parties-march-2023.pdf
Here is how the Guidance begins:
This guidance document is effective for payment determinations made on or after February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 by an out-of-network provider subject to the Requirements Related to Surprise Billing; Part II, 86 FR 55980, and Requirements Related to Surprise Billing; Final Rule, 87 FR 52618. Payment determinations made before February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued on October 31, 2022 and available here. Payment determinations made before February 6, 2023 for items and services furnished before October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 are subject to a different guidance document, issued on October 7, 2022, effective July 26, 2022 available here. Please visit www.cms.gov/nosurprises for the most current guidance documents related to the Federal IDR Process.
See the Guidance for details. It may be found here: https://www.cms.gov/files/document/federal-idr-guidance-disputing-parties-march-2023.pdf
Health Care-IRS Issues FAQs As To Whether Certain Items Are Medical Expenses Under Code Section 213 (Posted 4/26/2023)
The IRS says the following about these FAQs:
These frequently asked questions (FAQs) address whether certain costs related to nutrition, wellness, and general health are medical expenses under section 213 of the Internal Revenue Code (Code) that may be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA), or health reimbursement arrangement (HRA).
Section 213 of the Code generally allows a deduction for expenses paid during the taxable year for medical care if certain requirements are met. Expenses for medical care under section 213 of the Code also are eligible to be paid or reimbursed under an HSA, FSA, Archer MSA, or HRA. However, if any amount is paid or reimbursed under an HSA, FSA, Archer MSA, or HRA, a taxpayer cannot also deduct the amount as a medical expense on the taxpayer's federal income tax return.
Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include the costs of medicines and drugs that are prescribed by a physician.
Medical expenses must be primarily to alleviate or prevent a physical or mental disability or illness. They don't include expenses that are merely beneficial to general health.
For more information about whether costs related to nutrition, wellness, and general health are medical expenses under section 213 of the Code, see Publication 502, Medical and Dental ExpensesPDF and Tax Topic 502, Medical and Dental Expenses. For more information about HSAs, FSAs, Archer MSAs, and HRAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health PlansPDF.
See the FAQs for details. The actual questions may be found at: https://www.irs.gov/individuals/frequently-asked-questions-about-medical-expenses-related-to-nutrition-wellness-and-general-health
The IRS says the following about these FAQs:
These frequently asked questions (FAQs) address whether certain costs related to nutrition, wellness, and general health are medical expenses under section 213 of the Internal Revenue Code (Code) that may be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA), or health reimbursement arrangement (HRA).
Section 213 of the Code generally allows a deduction for expenses paid during the taxable year for medical care if certain requirements are met. Expenses for medical care under section 213 of the Code also are eligible to be paid or reimbursed under an HSA, FSA, Archer MSA, or HRA. However, if any amount is paid or reimbursed under an HSA, FSA, Archer MSA, or HRA, a taxpayer cannot also deduct the amount as a medical expense on the taxpayer's federal income tax return.
Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include the costs of medicines and drugs that are prescribed by a physician.
Medical expenses must be primarily to alleviate or prevent a physical or mental disability or illness. They don't include expenses that are merely beneficial to general health.
For more information about whether costs related to nutrition, wellness, and general health are medical expenses under section 213 of the Code, see Publication 502, Medical and Dental ExpensesPDF and Tax Topic 502, Medical and Dental Expenses. For more information about HSAs, FSAs, Archer MSAs, and HRAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health PlansPDF.
See the FAQs for details. The actual questions may be found at: https://www.irs.gov/individuals/frequently-asked-questions-about-medical-expenses-related-to-nutrition-wellness-and-general-health
Health Benefits-Fifth Circuit Rules Against Plaintiff In Her Suit For Benefits Covering Cancer Treatment (Posted 4/25/2023)
In Gonzalez v. Blue Cross Blue Shield, No. 22-10062 (Fifth Circ. 3/13/2023), the Fifth Circuit Court of Appeals says the following:
Roslyn Gonzalez is a former federal employee and participant in a health-insurance plan (“Plan”) that is governed by the Federal Employees Health Benefits Act (“FEHBA”).1 The Plan stems from a contract between the federal Office of Personnel Management (“OPM”) and Blue Cross Blue Shield Association and certain of its affiliates (together, “Blue Cross”). Blue Cross administers the Plan under OPM’s supervision.
Gonzalez suffered from cancer, and she asked Blue Cross whether the Plan would cover the proton therapy that her physicians recommended. Blue Cross told her the Plan did not cover that treatment. So Gonzalez chose to receive a different type of radiation treatment, one that the Plan did cover. The second-choice treatment eliminated the cancer, but it also caused devastating side effects. Gonzalez then sued OPM and Blue Cross, claiming that the Plan actually does cover proton therapy. As against OPM, she seeks the “benefits” that she wanted but did not receive, as well as an injunction directing OPM to compel Blue Cross to reform its internal processes by, among other things, covering proton therapy in the Plan going forward. As against Blue Cross, she seeks monetary damages under Texas common law.
The district court dismissed Gonzalez’s suit. It concluded that sovereign immunity bars Gonzalez’s monetary claims against OPM, that Gonzalez lacks standing for injunctive relief, and that FEHBA expressly preempts Gonzalez’s state-law claims against Blue Cross. Our reasoning follows a different path, but we AFFIRM the district court’s judgment.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca5/22-10062/22-10062-2023-03-13.pdf?ts=1678750250
In Gonzalez v. Blue Cross Blue Shield, No. 22-10062 (Fifth Circ. 3/13/2023), the Fifth Circuit Court of Appeals says the following:
Roslyn Gonzalez is a former federal employee and participant in a health-insurance plan (“Plan”) that is governed by the Federal Employees Health Benefits Act (“FEHBA”).1 The Plan stems from a contract between the federal Office of Personnel Management (“OPM”) and Blue Cross Blue Shield Association and certain of its affiliates (together, “Blue Cross”). Blue Cross administers the Plan under OPM’s supervision.
Gonzalez suffered from cancer, and she asked Blue Cross whether the Plan would cover the proton therapy that her physicians recommended. Blue Cross told her the Plan did not cover that treatment. So Gonzalez chose to receive a different type of radiation treatment, one that the Plan did cover. The second-choice treatment eliminated the cancer, but it also caused devastating side effects. Gonzalez then sued OPM and Blue Cross, claiming that the Plan actually does cover proton therapy. As against OPM, she seeks the “benefits” that she wanted but did not receive, as well as an injunction directing OPM to compel Blue Cross to reform its internal processes by, among other things, covering proton therapy in the Plan going forward. As against Blue Cross, she seeks monetary damages under Texas common law.
The district court dismissed Gonzalez’s suit. It concluded that sovereign immunity bars Gonzalez’s monetary claims against OPM, that Gonzalez lacks standing for injunctive relief, and that FEHBA expressly preempts Gonzalez’s state-law claims against Blue Cross. Our reasoning follows a different path, but we AFFIRM the district court’s judgment.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca5/22-10062/22-10062-2023-03-13.pdf?ts=1678750250
ERISA-Second Circuit Upholds District Court’s Ruling That Defendant Did Not Miscalculate Certain Plan Annuities (Posted 4/24/2023)
In McCutcheon v. Colgate-Palmolive Co., No. 20-3225 (2nd Circ. 3/13/23), the Second Circuit Court of Appeals says the following:
Plaintiffs-appellees brought this class action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., arguing, inter alia, that defendant-appellant Colgate-Palmolive Co. miscalculated residual annuities based on an erroneous interpretation of its retirement income plan and improperly used a pre-retirement mortality discount to calculate residual annuities, thereby working an impermissible forfeiture of benefits under ERISA. The district court granted summary judgment to plaintiffs-appellees on these claims.
For the reasons set forth below, we agree. We therefore AFFIRM the district court's order and final judgment.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca2/20-3225/20-3225-2023-03-13.pdf?ts=1678717833
In McCutcheon v. Colgate-Palmolive Co., No. 20-3225 (2nd Circ. 3/13/23), the Second Circuit Court of Appeals says the following:
Plaintiffs-appellees brought this class action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., arguing, inter alia, that defendant-appellant Colgate-Palmolive Co. miscalculated residual annuities based on an erroneous interpretation of its retirement income plan and improperly used a pre-retirement mortality discount to calculate residual annuities, thereby working an impermissible forfeiture of benefits under ERISA. The district court granted summary judgment to plaintiffs-appellees on these claims.
For the reasons set forth below, we agree. We therefore AFFIRM the district court's order and final judgment.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca2/20-3225/20-3225-2023-03-13.pdf?ts=1678717833
Health Care-HHS Office for Civil Rights Delivers Annual Reports to Congress on HIPAA Compliance and Breaches of Unsecured Protected Health Information (Posted 4/21/2023)
The HHS says the following in a News Release:
Reports highlight for regulated entities where to focus HIPAA compliance efforts
To help regulated entities better comply with the requirements of the HIPAA Privacy, Security, and Breach Notification Rules, the HHS Office for Civil Rights (OCR) is sharing two Reports to Congress for 2021, on HIPAA Privacy, Security, and Breach Notification Rule Compliance and Breaches of Unsecured Protected Health Information. These reports, delivered to Congress today, may benefit regulated entities to assist in their HIPAA compliance efforts. The reports also share steps taken by OCR to investigate complaints, breach reports, and compliance reviews regarding potential violations of the HIPAA Rules. The reports include important data on the numbers of HIPAA cases investigated, areas of noncompliance, and insights into trends such as cybersecurity readiness.
“The health care industry is one of the most diverse industries in our economy, and OCR is responsible for enforcing the HIPAA Rules to support greater privacy and security of individuals’ protected health information,” said OCR Director Melanie Fontes Rainer. “We will continue to provide guidance and technical assistance on compliance with the HIPAA Rules, as well as a vigorous enforcement program to address potential HIPAA violations.”
The 2021 Report to Congress on HIPAA Privacy, Security, and Breach Notification Rule Compliance identifies the number of complaints received, the method by which those complaints were resolved, the number of compliance reviews initiated by OCR, and the outcome of each review.
The Annual Report to Congress on Breaches of Unsecured Protected Health Information identifies the number and nature of breaches of unsecured protected health information (PHI) that were reported to the Secretary of HHS during calendar year 2021 and the actions taken in response to those breaches. It also highlights the continued need for regulated entities to improve compliance with the HIPAA Security Rule requirements, including:
These compliance concerns were identified as areas needing improvement in 2021 OCR breach investigations. As it was the previous three years, hacking/IT incidents remain the largest category of breaches occurring in 2021 affecting 500 or more individuals, and affected the most individuals, comprising 75% of the reported breaches. Network servers is the largest category by location for breaches involving 500 or more individuals.
OCR’s 2021 Report to Congress on HIPAA Privacy, Security, and Breach Notification Rule Compliance may be found at: https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/reports-congress/index.html
OCR’s 2021 Report to Congress on Breaches of Unsecured Protected Health Information may be found at: https://www.hhs.gov/hipaa/for-professionals/breach-notification/reports-congress/index.html
OCR is committed to enforcing the HIPAA Rules and supporting the privacy and security of peoples’ health information. If you believe that your or another person’s health information privacy or civil rights have been violated, you can file a complaint with OCR at: https://www.hhs.gov/ocr/complaints/index.html.
The News Release may be found at: https://www.hhs.gov/about/news/2023/02/17/hhs-office-civil-rights-delivers-annual-reports-congress-hipaa-compliance-breaches-unsecured-protected-health-information.html
The HHS says the following in a News Release:
Reports highlight for regulated entities where to focus HIPAA compliance efforts
To help regulated entities better comply with the requirements of the HIPAA Privacy, Security, and Breach Notification Rules, the HHS Office for Civil Rights (OCR) is sharing two Reports to Congress for 2021, on HIPAA Privacy, Security, and Breach Notification Rule Compliance and Breaches of Unsecured Protected Health Information. These reports, delivered to Congress today, may benefit regulated entities to assist in their HIPAA compliance efforts. The reports also share steps taken by OCR to investigate complaints, breach reports, and compliance reviews regarding potential violations of the HIPAA Rules. The reports include important data on the numbers of HIPAA cases investigated, areas of noncompliance, and insights into trends such as cybersecurity readiness.
“The health care industry is one of the most diverse industries in our economy, and OCR is responsible for enforcing the HIPAA Rules to support greater privacy and security of individuals’ protected health information,” said OCR Director Melanie Fontes Rainer. “We will continue to provide guidance and technical assistance on compliance with the HIPAA Rules, as well as a vigorous enforcement program to address potential HIPAA violations.”
The 2021 Report to Congress on HIPAA Privacy, Security, and Breach Notification Rule Compliance identifies the number of complaints received, the method by which those complaints were resolved, the number of compliance reviews initiated by OCR, and the outcome of each review.
The Annual Report to Congress on Breaches of Unsecured Protected Health Information identifies the number and nature of breaches of unsecured protected health information (PHI) that were reported to the Secretary of HHS during calendar year 2021 and the actions taken in response to those breaches. It also highlights the continued need for regulated entities to improve compliance with the HIPAA Security Rule requirements, including:
- risk analysis and risk management;
- information system activity review;
- audit controls; and
- access controls.
These compliance concerns were identified as areas needing improvement in 2021 OCR breach investigations. As it was the previous three years, hacking/IT incidents remain the largest category of breaches occurring in 2021 affecting 500 or more individuals, and affected the most individuals, comprising 75% of the reported breaches. Network servers is the largest category by location for breaches involving 500 or more individuals.
OCR’s 2021 Report to Congress on HIPAA Privacy, Security, and Breach Notification Rule Compliance may be found at: https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/reports-congress/index.html
OCR’s 2021 Report to Congress on Breaches of Unsecured Protected Health Information may be found at: https://www.hhs.gov/hipaa/for-professionals/breach-notification/reports-congress/index.html
OCR is committed to enforcing the HIPAA Rules and supporting the privacy and security of peoples’ health information. If you believe that your or another person’s health information privacy or civil rights have been violated, you can file a complaint with OCR at: https://www.hhs.gov/ocr/complaints/index.html.
The News Release may be found at: https://www.hhs.gov/about/news/2023/02/17/hhs-office-civil-rights-delivers-annual-reports-congress-hipaa-compliance-breaches-unsecured-protected-health-information.html
ERISA-Fourth Circuit Determines That Plaintiff Is Entitled To Long-Term Disability Benefits (Posted 4/19/2023)
In Tekmen v. Reliance Standard Life Ins. Co., No. 20-1510 (4th Cir. Dec. 16, 2022), the Fourth Circuit Court of Appeals says the following:
Reliance Standard Life Insurance Company denied Anita Tekmen’s claim for longterm disability benefits after concluding that she was not “Totally Disabled” as defined by her disability insurance plan. Tekmen brought this action under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), arguing that the denial of benefits violated that Act. After conducting a bench trial under Federal Rule of Civil Procedure 52, the district court awarded judgment to Tekmen. Reliance appeals.
On appeal, we affirm that the district court appropriately resolved the matter under Rule 52 and did not clearly err in its factual findings. We also affirm that Tekmen was entitled to long-term disability benefits under the terms of the plan.
The case may be fund here: https://benefitslink.com/src/ctop/tekman-v-reliance-standard-4cir-12162022.pdf
In Tekmen v. Reliance Standard Life Ins. Co., No. 20-1510 (4th Cir. Dec. 16, 2022), the Fourth Circuit Court of Appeals says the following:
Reliance Standard Life Insurance Company denied Anita Tekmen’s claim for longterm disability benefits after concluding that she was not “Totally Disabled” as defined by her disability insurance plan. Tekmen brought this action under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), arguing that the denial of benefits violated that Act. After conducting a bench trial under Federal Rule of Civil Procedure 52, the district court awarded judgment to Tekmen. Reliance appeals.
On appeal, we affirm that the district court appropriately resolved the matter under Rule 52 and did not clearly err in its factual findings. We also affirm that Tekmen was entitled to long-term disability benefits under the terms of the plan.
The case may be fund here: https://benefitslink.com/src/ctop/tekman-v-reliance-standard-4cir-12162022.pdf
Health Care-CMS Issues Memorandum: Medicare Drug Price Negotiation Program: Initial Memorandum, Implementation of Sections 1191 – 1198 of the Social Security Act for Initial Price Applicability Year 2026, and Solicitation of Comments (Posted 4/18/2023)
CMS says that:
The purpose of this memorandum is to provide interested parties with initial guidance regarding implementation of sections 11001 and 11002 of the Inflation Reduction Act (IRA) (P.L. 117- 169), signed into law on August 16, 2022, which establish the Medicare Drug Price Negotiation Program (hereafter the “Negotiation Program”) to negotiate maximum fair prices (MFPs) for certain high expenditure, single source drugs and biological products. The requirements for this program are described in sections 1191 through 1198 of the Social Security Act (hereafter “the Act”) as added by sections 11001 and 11002 of the IRA.
See the Memorandum for details. It may be found here: https://www.cms.gov/files/document/medicare-drug-price-negotiation-program-initial-guidance.pdf
CMS says that:
The purpose of this memorandum is to provide interested parties with initial guidance regarding implementation of sections 11001 and 11002 of the Inflation Reduction Act (IRA) (P.L. 117- 169), signed into law on August 16, 2022, which establish the Medicare Drug Price Negotiation Program (hereafter the “Negotiation Program”) to negotiate maximum fair prices (MFPs) for certain high expenditure, single source drugs and biological products. The requirements for this program are described in sections 1191 through 1198 of the Social Security Act (hereafter “the Act”) as added by sections 11001 and 11002 of the IRA.
See the Memorandum for details. It may be found here: https://www.cms.gov/files/document/medicare-drug-price-negotiation-program-initial-guidance.pdf
Employee Benefits-IRS Issues Rev. Proc. Indexing Adjustments For Dollar Amounts Under Code Section 4980H (Posted 4/17/2023)
The IRS has issued Rev. Proc. 2023-17. According to the IRS, the Rev. Proc. has the following purpose:
This revenue procedure provides indexing adjustments for the applicable dollar amounts under § 4980H(c)(1) and (b)(1) of the Internal Revenue Code. These indexed amounts are used to calculate the employer shared responsibility payments (ESRP) under § 4980H(a) and (b)(1), respectively.
See Rev. Proc. 2023-17 for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-23-17.pdf
The IRS has issued Rev. Proc. 2023-17. According to the IRS, the Rev. Proc. has the following purpose:
This revenue procedure provides indexing adjustments for the applicable dollar amounts under § 4980H(c)(1) and (b)(1) of the Internal Revenue Code. These indexed amounts are used to calculate the employer shared responsibility payments (ESRP) under § 4980H(a) and (b)(1), respectively.
See Rev. Proc. 2023-17 for details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-23-17.pdf
ERISA-Ninth Circuit finds That Plaintiffs Have No Standing To Bring ERISA Breach Of Duty Case (Posted 4/14/2023)
The case of Rachel Winsor , et al v. Sequoia Benefits & Insurance, et al, No. 21-16992 (Ninth Cir. 3/8/2023) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed the district court’s dismissal, for lack of Article III standing, of ERISA plan participants’ putative class action alleging breach of fiduciary duty by the manager of a Multiple Employer Welfare Arrangement, or MEWA.
Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates.
Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.
The Panel held that plaintiffs failed to establish Article III standing as to either of their two theories of injury. Plaintiffs’ first theory of injury was that Sequoia’s actions allegedly caused them to pay higher contributions for their insurance, and that eliminating Sequoia’s commissions and reducing administrative fees would therefore have lowered plaintiffs’ payments. The panel held, as to this out-of-pocket-injury theory, that plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. Plaintiffs thus also failed to plead causation, the second element of Article III standing. And plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief, either by the imposition of a constructive trust on Sequoia’s ill-gotten profits or by the award of damages to the RingCentral plan.
Plaintiffs’ second theory of injury was that, as beneficiaries, they retained an equitable ownership in the Tech Benefits Program’s trust fund. The Panel held that this theory of standing was barred under Thole v. U.S. Bank N.A., 140 S. Ct. 1615 (2020), which held that participants in a defined-benefit pension plan lacked standing to bring an ERISA claim alleging that the plan’s fiduciaries had violated their duties of loyalty and prudence by poorly investing the plan’s assets. The plaintiffs in Thole received a fixed monthly payment, which did not fluctuate based on the value of the plan, and therefore suffered no monetary injury. The Panel held that the plaintiffs here did not establish that they had some equitable interest in plan funds that the Thole plaintiffs lacked, or that a comparison to trust law could support their standing when such a comparison did not prevail in Thole. Although the Tech Benefits Program was not a defined-benefit pension plan, it similarly provided a fixed set of benefits as promised in plan documents.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca9/21-16992/21-16992-2023-03-08.pdf?ts=1678293063
The case of Rachel Winsor , et al v. Sequoia Benefits & Insurance, et al, No. 21-16992 (Ninth Cir. 3/8/2023) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed the district court’s dismissal, for lack of Article III standing, of ERISA plan participants’ putative class action alleging breach of fiduciary duty by the manager of a Multiple Employer Welfare Arrangement, or MEWA.
Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates.
Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.
The Panel held that plaintiffs failed to establish Article III standing as to either of their two theories of injury. Plaintiffs’ first theory of injury was that Sequoia’s actions allegedly caused them to pay higher contributions for their insurance, and that eliminating Sequoia’s commissions and reducing administrative fees would therefore have lowered plaintiffs’ payments. The panel held, as to this out-of-pocket-injury theory, that plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. Plaintiffs thus also failed to plead causation, the second element of Article III standing. And plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief, either by the imposition of a constructive trust on Sequoia’s ill-gotten profits or by the award of damages to the RingCentral plan.
Plaintiffs’ second theory of injury was that, as beneficiaries, they retained an equitable ownership in the Tech Benefits Program’s trust fund. The Panel held that this theory of standing was barred under Thole v. U.S. Bank N.A., 140 S. Ct. 1615 (2020), which held that participants in a defined-benefit pension plan lacked standing to bring an ERISA claim alleging that the plan’s fiduciaries had violated their duties of loyalty and prudence by poorly investing the plan’s assets. The plaintiffs in Thole received a fixed monthly payment, which did not fluctuate based on the value of the plan, and therefore suffered no monetary injury. The Panel held that the plaintiffs here did not establish that they had some equitable interest in plan funds that the Thole plaintiffs lacked, or that a comparison to trust law could support their standing when such a comparison did not prevail in Thole. Although the Tech Benefits Program was not a defined-benefit pension plan, it similarly provided a fixed set of benefits as promised in plan documents.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca9/21-16992/21-16992-2023-03-08.pdf?ts=1678293063
ERISA-Tenth Circuit Denies Defendant’s Request For Arbitration (Published 4/13/2023)
In Harrison v. Envision Mgmt. Holding Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023), the Tenth Circuit Court of Appeals says the following:
Plaintiff Robert Harrison, a participant in a defined contribution retirement plan established by his former employer, filed suit under the Employee Retirement Income Security Act (ERISA) against the fiduciaries of the plan alleging that they breached their duties towards, and caused damages to, the plan. Harrison’s complaint sought various forms of relief, including a declaration that Defendants breached their fiduciary duties, the removal of the current plan trustee, the appointment of a new fiduciary to manage the plan, an order directing the current trustee to restore all losses to the plan that resulted from the fiduciary breaches, and an order directing Defendants to disgorge the profits they obtained from their fiduciary breaches. In response, Defendants moved to compel arbitration, citing a provision of the plan document. The district court denied that motion, concluding that enforcing the arbitration provision of the plan would prevent Harrison from effectively vindicating the statutory remedies sought in his complaint. Defendants now appeal from that ruling. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court’s decision.
The case may be found at: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110810667.pdf
In Harrison v. Envision Mgmt. Holding Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023), the Tenth Circuit Court of Appeals says the following:
Plaintiff Robert Harrison, a participant in a defined contribution retirement plan established by his former employer, filed suit under the Employee Retirement Income Security Act (ERISA) against the fiduciaries of the plan alleging that they breached their duties towards, and caused damages to, the plan. Harrison’s complaint sought various forms of relief, including a declaration that Defendants breached their fiduciary duties, the removal of the current plan trustee, the appointment of a new fiduciary to manage the plan, an order directing the current trustee to restore all losses to the plan that resulted from the fiduciary breaches, and an order directing Defendants to disgorge the profits they obtained from their fiduciary breaches. In response, Defendants moved to compel arbitration, citing a provision of the plan document. The district court denied that motion, concluding that enforcing the arbitration provision of the plan would prevent Harrison from effectively vindicating the statutory remedies sought in his complaint. Defendants now appeal from that ruling. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court’s decision.
The case may be found at: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110810667.pdf
Employee Benefits-IRS Issues Relief For Reporting Required Minimum Distributions For IRAs For 2023 (Posted 4/12/2023)
The IRS has issued Notice 2023-23. According to the IRS, this Notice has the following purpose:
This notice provides guidance to financial institutions on reporting required minimum distributions (RMDs) for 2023 after the amendment to section 401(a)(9) of the Internal Revenue Code made by the Consolidated Appropriations Act, 2023, P. L. 117- 328 (the Act).
See Notice 2023-23 for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-23.pdf
The IRS has issued Notice 2023-23. According to the IRS, this Notice has the following purpose:
This notice provides guidance to financial institutions on reporting required minimum distributions (RMDs) for 2023 after the amendment to section 401(a)(9) of the Internal Revenue Code made by the Consolidated Appropriations Act, 2023, P. L. 117- 328 (the Act).
See Notice 2023-23 for details. It may be found here: https://www.irs.gov/pub/irs-drop/n-23-23.pdf
Employment-Sixth Circuit Overturns District Court’s Rulings Against Claims of Wrongful Denial Of FMLA Leave And Retaliation For Requesting The Leave (Posted 4/11/2023)
In Render v. FCA US LLC, No. 21-2851 (6th Cir. Nov. 16, 2022), the Sixth Circuit Court of Appeals says the following:
Plaintiff Edward Render (“Render”) sued his former employer, FCA US, LLC (“FCA”), under the Family Medical Leave Act (“FMLA”), 29 U.S.C. §§ 2601, et seq., alleging that FCA wrongfully denied him FMLA medical leave in violation of 29 U.S.C. § 2615(a)(1), and that FCA retaliated against him for requesting FMLA leave in violation of 29 U.S.C. § 2615(a)(2). FCA moved for summary judgment on both claims, which the district court granted. Render v. FCA US LLC, No. 19-12984, 2021 WL 3085401, at *9 (E.D. Mich. July 20, 2021). For the reasons set forth below, we REVERSE the district court’s order and REMAND for further proceedings
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0241p-06.pdf
In Render v. FCA US LLC, No. 21-2851 (6th Cir. Nov. 16, 2022), the Sixth Circuit Court of Appeals says the following:
Plaintiff Edward Render (“Render”) sued his former employer, FCA US, LLC (“FCA”), under the Family Medical Leave Act (“FMLA”), 29 U.S.C. §§ 2601, et seq., alleging that FCA wrongfully denied him FMLA medical leave in violation of 29 U.S.C. § 2615(a)(1), and that FCA retaliated against him for requesting FMLA leave in violation of 29 U.S.C. § 2615(a)(2). FCA moved for summary judgment on both claims, which the district court granted. Render v. FCA US LLC, No. 19-12984, 2021 WL 3085401, at *9 (E.D. Mich. July 20, 2021). For the reasons set forth below, we REVERSE the district court’s order and REMAND for further proceedings
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0241p-06.pdf
Employee Benefits-CMS Provides Information On Payment Disputes Between Providers And Health Plans (Posted 4/10/2023)
See the Information for details. It may be found here: https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans
See the Information for details. It may be found here: https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans
Employee Benefits-CMS Issues Fact Sheet On CMS Waivers, Flexibilities, And The Transition Forward From The COVID-19 Public Health Emergency (Posted 4/7/2023)
The Fact Sheet begins as follows:
Based on current COVID-19 trends, the Department of Health and Human Services is planning for the federal Public Health Emergency for COVID-19 (PHE), declared under Section 319 of the Public Health Service Act, to expire at the end of the day on May 11, 2023. Thanks to the Administration’s whole-of-government approach to combatting the virus, we are in a better place in our response than we were three years ago, and we can transition away from an emergency phase.
The emergency declarations, legislative actions by Congress, and regulatory actions across government, including by the Centers for Medicare & Medicaid Services (CMS), allowed for changes to many aspects of health care delivery during the COVID-19 PHE. Health care providers received maximum flexibility to streamline delivery and allow access to care during the PHE. While some of these changes will be permanent or extended due to Congressional action, some waivers and flexibilities will expire, as they were intended to respond to the rapidly evolving pandemic, not to permanently replace standing rules.
This fact sheet will help you know what to expect at the end of the PHE so that you can continue to feel confident in how you will receive your health care. Please note that this information is not intended to cover every possible scenario.
This fact sheet will cover the following:
• COVID-19 vaccines, testing, and treatments;
• Telehealth services;
• Health Care Access: Continuing flexibilities for health care professionals; and
• Inpatient Hospital Care at Home: Expanded hospital capacity by providing inpatient care in a patient’s home.
The Administration, States, and private insurance plans will continue to provide guidance in the coming months. As described in previous communications, the Administration’s continued response is not entirely dependent on the COVID-19 PHE. There are significant flexibilities and actions that will not be affected as we transition from the current phase of our response.
For more information on what changes and does not change across the Department, visit https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergencytransition-roadmap.html.
See the Fact Sheet for details. It may be found at: https://www.cms.gov/files/document/what-do-i-need-know-cms-waivers-flexibilities-and-transition-forward-covid-19-public-health.pdf
The Fact Sheet begins as follows:
Based on current COVID-19 trends, the Department of Health and Human Services is planning for the federal Public Health Emergency for COVID-19 (PHE), declared under Section 319 of the Public Health Service Act, to expire at the end of the day on May 11, 2023. Thanks to the Administration’s whole-of-government approach to combatting the virus, we are in a better place in our response than we were three years ago, and we can transition away from an emergency phase.
The emergency declarations, legislative actions by Congress, and regulatory actions across government, including by the Centers for Medicare & Medicaid Services (CMS), allowed for changes to many aspects of health care delivery during the COVID-19 PHE. Health care providers received maximum flexibility to streamline delivery and allow access to care during the PHE. While some of these changes will be permanent or extended due to Congressional action, some waivers and flexibilities will expire, as they were intended to respond to the rapidly evolving pandemic, not to permanently replace standing rules.
This fact sheet will help you know what to expect at the end of the PHE so that you can continue to feel confident in how you will receive your health care. Please note that this information is not intended to cover every possible scenario.
This fact sheet will cover the following:
• COVID-19 vaccines, testing, and treatments;
• Telehealth services;
• Health Care Access: Continuing flexibilities for health care professionals; and
• Inpatient Hospital Care at Home: Expanded hospital capacity by providing inpatient care in a patient’s home.
The Administration, States, and private insurance plans will continue to provide guidance in the coming months. As described in previous communications, the Administration’s continued response is not entirely dependent on the COVID-19 PHE. There are significant flexibilities and actions that will not be affected as we transition from the current phase of our response.
For more information on what changes and does not change across the Department, visit https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergencytransition-roadmap.html.
See the Fact Sheet for details. It may be found at: https://www.cms.gov/files/document/what-do-i-need-know-cms-waivers-flexibilities-and-transition-forward-covid-19-public-health.pdf
Employee Benefits-DOL Issues FAQS About Affordable Care Act And Consolidated Appropriations Act, 2021 Implementation Part 57 (Posted 4/6/2023)
Here is the background for the FAQs
Set out below are Frequently Asked Questions (FAQs) regarding implementation of title II (Transparency) of division BB of the Consolidated Appropriations Act, 2021 (the CAA). These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
Included in the FAQS is guidance on the prohibition on gag clauses on price and Quality information in provider agreements.
See the FAQs for details. They may be found at: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-57.pdf
Here is the background for the FAQs
Set out below are Frequently Asked Questions (FAQs) regarding implementation of title II (Transparency) of division BB of the Consolidated Appropriations Act, 2021 (the CAA). These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the law and promote compliance.
Included in the FAQS is guidance on the prohibition on gag clauses on price and Quality information in provider agreements.
See the FAQs for details. They may be found at: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-57.pdf
Employee Benefits-Fifth Circuit Opines On DOL Action Pertaining To Health Plan Guidance (Posted 4/5/2023)
In Data Marketing Partnership, LP v. DOL, No. 20-11179 (5th Cir. Aug. 17, 2022) (Remanded to N.D. Tex. No. 19-800), the Fifth Circuit Court of Appeals says the following:
There are three questions presented. The first is whether the Department of Labor’s self-labeled “advisory opinion” is reviewable “final agency action” under the Administrative Procedure Act. It is. The second is whether the Department’s action is arbitrary, capricious, or otherwise contrary to law. Again, it is. The third is whether the district court issued the appropriate relief. Here, we affirm the district court’s vacatur of the agency action. But we vacate and remand the district court’s injunction for further consideration in light of this opinion.
The case may be found at: https://www.ca5.uscourts.gov/opinions/pub/20/20-11179-CV0.pdf
In Data Marketing Partnership, LP v. DOL, No. 20-11179 (5th Cir. Aug. 17, 2022) (Remanded to N.D. Tex. No. 19-800), the Fifth Circuit Court of Appeals says the following:
There are three questions presented. The first is whether the Department of Labor’s self-labeled “advisory opinion” is reviewable “final agency action” under the Administrative Procedure Act. It is. The second is whether the Department’s action is arbitrary, capricious, or otherwise contrary to law. Again, it is. The third is whether the district court issued the appropriate relief. Here, we affirm the district court’s vacatur of the agency action. But we vacate and remand the district court’s injunction for further consideration in light of this opinion.
The case may be found at: https://www.ca5.uscourts.gov/opinions/pub/20/20-11179-CV0.pdf
Employee Benefits-Eighth Circuit Affirm District Court’s Denial Of Further COBRA Coverage (Posted 4/4/2023)
In Anglim v. Sharp Med. Staffing, LLC, No. 22-1021 (8th Cir. Feb. 24, 2023), the Eighth Circuit Court of Appeals says the following:
Carrie Anglim alleged that after her employment at Sharp Medical Staffing, LLC (“Sharp Medical”) ended, she asked Sharp Medical to enroll her in healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), but Sharp Medical failed to do so. Anglim asserts that, on two different occasions, she placed a check in the mail to Sharp Medical for premium payments. Sharp Medical disputes receiving the checks and notes that even though it never received any money from Anglim, it enrolled Anglim in COBRA coverage and paid for two months of coverage. When no further payments were made by Anglim, the coverage was terminated for non-payment. Anglim appeals the district court’s adverse summary judgment order. We affirm.
The case may be found at: http://media.ca8.uscourts.gov/opndir/23/02/221021U.pdf
In Anglim v. Sharp Med. Staffing, LLC, No. 22-1021 (8th Cir. Feb. 24, 2023), the Eighth Circuit Court of Appeals says the following:
Carrie Anglim alleged that after her employment at Sharp Medical Staffing, LLC (“Sharp Medical”) ended, she asked Sharp Medical to enroll her in healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), but Sharp Medical failed to do so. Anglim asserts that, on two different occasions, she placed a check in the mail to Sharp Medical for premium payments. Sharp Medical disputes receiving the checks and notes that even though it never received any money from Anglim, it enrolled Anglim in COBRA coverage and paid for two months of coverage. When no further payments were made by Anglim, the coverage was terminated for non-payment. Anglim appeals the district court’s adverse summary judgment order. We affirm.
The case may be found at: http://media.ca8.uscourts.gov/opndir/23/02/221021U.pdf
Health Benefits- DOL Issues FAQs about Families First Coronavirus Response Act, Coronavirus Aid, Relief, and Economic Security Act, and Health Insurance Portability and Accountability Act Implementation Part 58 (Posted 4/3/2023)
The DOL says the following at the start of the FAQs:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the Health Insurance Portability and Accountability Act (HIPAA). These FAQs have been prepared jointly by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments). These FAQs answer questions from stakeholders to help people understand the law and benefit from it, as intended. Previously issued FAQs are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs#Affordable_Care_Act.
On January 31, 2020, HHS Secretary Alex M. Azar II declared that a nationwide public health emergency has existed since January 27, 2020, as a result of the 2019 novel coronavirus, the virus that causes coronavirus disease-2019 (COVID-19) (referred to in this document as the PHE). This declaration was continually renewed, most recently by HHS Secretary Xavier Becerra, effective February 11, 2023. On January 30 and February 9, 2023, respectively, the Biden-Harris Administration and Secretary Becerra announced that they intend to end the National Emergency Concerning the Novel Coronavirus Disease 2019 (COVID-19) Pandemic (COVID-19 National Emergency) and the PHE, at the end of the day on May 11, 2023.
See the FAQs for the details and footnotes. They may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58
The DOL says the following at the start of the FAQs:
Set out below are Frequently Asked Questions (FAQs) regarding implementation of the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the Health Insurance Portability and Accountability Act (HIPAA). These FAQs have been prepared jointly by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments). These FAQs answer questions from stakeholders to help people understand the law and benefit from it, as intended. Previously issued FAQs are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/aca-implementation-faqs and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs#Affordable_Care_Act.
On January 31, 2020, HHS Secretary Alex M. Azar II declared that a nationwide public health emergency has existed since January 27, 2020, as a result of the 2019 novel coronavirus, the virus that causes coronavirus disease-2019 (COVID-19) (referred to in this document as the PHE). This declaration was continually renewed, most recently by HHS Secretary Xavier Becerra, effective February 11, 2023. On January 30 and February 9, 2023, respectively, the Biden-Harris Administration and Secretary Becerra announced that they intend to end the National Emergency Concerning the Novel Coronavirus Disease 2019 (COVID-19) Pandemic (COVID-19 National Emergency) and the PHE, at the end of the day on May 11, 2023.
See the FAQs for the details and footnotes. They may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58
Health Benefits-DOL Talks About What The End of the COVID-19 Public Health Emergency Means for Health Benefits (Posted 3/31/2023)
The discussion begins as follows:
Over three years have passed since the start of the COVID-19 public health emergency in January of 2020. We have come a long way from the time of businesses being closed and mandatory quarantine periods. While we faced one of the most challenging times for our country, we also were able to show our resilience by working together to respond to – and overcome – these trying times. We’ve opened our businesses back up and brought employees back to the office. We’ve worked together to control the spread of COVID-19 by making testing and vaccines widely available. It is clear that this hard work has paid off as we look towards the end of the public health emergency. While we’ve accomplished a lot, there is still more to do. It is imperative that we continue to work together to ensure a safe and informed transition out of the public health emergency. And while we are unwinding some of the policies that were in place during the public health emergency, it is important to make sure that this unwinding is done in a manner that protects the individuals in your health plan.
See the full discussion for details. It may be found at; https://blog.dol.gov/2023/03/29/what-does-the-end-of-the-covid-19-public-health-emergency-mean-for-health-benefits
The discussion begins as follows:
Over three years have passed since the start of the COVID-19 public health emergency in January of 2020. We have come a long way from the time of businesses being closed and mandatory quarantine periods. While we faced one of the most challenging times for our country, we also were able to show our resilience by working together to respond to – and overcome – these trying times. We’ve opened our businesses back up and brought employees back to the office. We’ve worked together to control the spread of COVID-19 by making testing and vaccines widely available. It is clear that this hard work has paid off as we look towards the end of the public health emergency. While we’ve accomplished a lot, there is still more to do. It is imperative that we continue to work together to ensure a safe and informed transition out of the public health emergency. And while we are unwinding some of the policies that were in place during the public health emergency, it is important to make sure that this unwinding is done in a manner that protects the individuals in your health plan.
See the full discussion for details. It may be found at; https://blog.dol.gov/2023/03/29/what-does-the-end-of-the-covid-19-public-health-emergency-mean-for-health-benefits
Employee Benefits-PBGC Issues Report On How The PBGC Should Improve Its Special Financial Assistance Review Procedures (Posted 3/30/2023)
Here is the background for the Report:
Established by the Employee Retirement Income Security Act of 1974 (ERISA), the Pension Benefit Guaranty Corporation (PBGC or Corporation) insures the pension benefits of workers and retirees in private sector defined-benefit pension plans. PBGC’s mission is to enhance retirement security by preserving plans and protecting pensioners' benefits. The Corporation guarantees payment, up to the legal limits, of the pension benefits earned by over 33 million American workers, retirees, and beneficiaries in more than 25,000 single-employer and multiemployer plans. PBGC pays guaranteed benefits directly to retirees and beneficiaries in failed single-employer plans and pays financial assistance to insolvent multiemployer plans to allow them to pay guaranteed benefits to retirees and beneficiaries.
See the Report for details on the improvement of the PBGC’s special financial assistance review procedures. The Report may be found here: https://www.oversight.gov/sites/default/files/oig-reports/PBGC/EVAL-2023-08.pdf
Here is the background for the Report:
Established by the Employee Retirement Income Security Act of 1974 (ERISA), the Pension Benefit Guaranty Corporation (PBGC or Corporation) insures the pension benefits of workers and retirees in private sector defined-benefit pension plans. PBGC’s mission is to enhance retirement security by preserving plans and protecting pensioners' benefits. The Corporation guarantees payment, up to the legal limits, of the pension benefits earned by over 33 million American workers, retirees, and beneficiaries in more than 25,000 single-employer and multiemployer plans. PBGC pays guaranteed benefits directly to retirees and beneficiaries in failed single-employer plans and pays financial assistance to insolvent multiemployer plans to allow them to pay guaranteed benefits to retirees and beneficiaries.
See the Report for details on the improvement of the PBGC’s special financial assistance review procedures. The Report may be found here: https://www.oversight.gov/sites/default/files/oig-reports/PBGC/EVAL-2023-08.pdf
Employee Benefits-DOL Issues Fact Sheet On Changes For The 2023 Form 5500 And Form 5500-SF Annual Return/Reports (Posted 3/29/2023)
The DOL says the following to start the Fact Sheet:
Today, the U.S. Department of Labor, Internal Revenue Service, and the Pension Benefit Guaranty Corporation released two Federal Register Notices announcing changes to the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500–SF Short Form Annual Return/Report of Small Employee Benefit Plan effective for plan years beginning on or after January 1, 2023.
The key revisions, which include changes related to provisions in the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), include:
Additionally, technical adjustments were made to the Federal Register Notices to address certain provisions in SECURE Act 2.0 of 2022 on Code section 403(b) MEPs, including PEPs, minimum required distributions, and audit requirements for plans in DCG reporting arrangements.
See the Fact Sheet for details. It may be found at: https://www.dol.gov/agencies/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/changes-for-the-2023-form-5500-and-form-5500-sf-annual-return-reports
Also, see the Final Rule on this matter at: https://www.govinfo.gov/content/pkg/FR-2023-02-24/pdf/2023-02652.pdf
The final forms may be found at: https://www.govinfo.gov/content/pkg/FR-2023-02-24/pdf/2023-02653.pdf
The DOL says the following to start the Fact Sheet:
Today, the U.S. Department of Labor, Internal Revenue Service, and the Pension Benefit Guaranty Corporation released two Federal Register Notices announcing changes to the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500–SF Short Form Annual Return/Report of Small Employee Benefit Plan effective for plan years beginning on or after January 1, 2023.
The key revisions, which include changes related to provisions in the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), include:
- A consolidated Form 5500 reporting option for certain groups of defined contribution retirement plans – defined contribution group (DCG) reporting arrangements.
- Improved reporting by multiple-employer plans (MEPs), including pooled employer plans (PEPs).
- A change in the participant-counting methodology for determining eligibility for simplified reporting alternatives available to small plans.
- A breakout of reporting of administrative expenses paid by the plan on a plan's financial statements.
- Further improvements in financial and funding reporting by PBGC-covered defined benefit plans.
- The addition of selected Internal Revenue Code compliance questions to improve tax oversight and compliance of tax-qualified retirement plans.
- Technical and conforming changes as part of the annual rollover of forms and instructions.
Additionally, technical adjustments were made to the Federal Register Notices to address certain provisions in SECURE Act 2.0 of 2022 on Code section 403(b) MEPs, including PEPs, minimum required distributions, and audit requirements for plans in DCG reporting arrangements.
See the Fact Sheet for details. It may be found at: https://www.dol.gov/agencies/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/changes-for-the-2023-form-5500-and-form-5500-sf-annual-return-reports
Also, see the Final Rule on this matter at: https://www.govinfo.gov/content/pkg/FR-2023-02-24/pdf/2023-02652.pdf
The final forms may be found at: https://www.govinfo.gov/content/pkg/FR-2023-02-24/pdf/2023-02653.pdf
ERISA-Eighth Circuit Finds That Plaintiff Claiming Life Insurance Benefits Has Failed To State A Claim (Posted 3/28/2023)
In Kristina Powell v. Minnesota Life Insurance Co., No. 22-2096 (8th Cir.2/23/2023), the Eighth Circuit Court of Appeals says the following:
Kristina Powell sued Minnesota Life Insurance Company and Securian Life Insurance Company, alleging that their denial of her claim for life insurance benefits violated the Employee Retirement Income Security Act (“ERISA”). The district court dismissed her complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. We affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca8/22-2096/22-2096-2023-02-23.pdf?ts=1677169905
In Kristina Powell v. Minnesota Life Insurance Co., No. 22-2096 (8th Cir.2/23/2023), the Eighth Circuit Court of Appeals says the following:
Kristina Powell sued Minnesota Life Insurance Company and Securian Life Insurance Company, alleging that their denial of her claim for life insurance benefits violated the Employee Retirement Income Security Act (“ERISA”). The district court dismissed her complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. We affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca8/22-2096/22-2096-2023-02-23.pdf?ts=1677169905
ERISA-Fourth Circuit Agrees With District Court’s Rejection Of Claim For Plan Benefits (Posted 3/27/2023)
In Kathy Hayes v. Prudential Insurance Company of America, No. 21-2406 (4th Cir. 2/23/2023), the Fourth Circuit Court of Appeals says the following:
When Anthony Hayes’ employment ended, so did his employer-provided life insurance. Hayes then missed the deadline to convert his coverage to an individual policy. After Hayes died, his surviving spouse filed suit seeking relief under a provision of the Employee Retirement Income Security Act allowing “a participant or beneficiary” of an employee benefit plan “to recover benefits due” “under the terms of [the] plan.” 29 U.S.C. § 1132(a)(1)(B). We agree with the district court that the plan administrator did not abuse its discretion in concluding Hayes was not entitled to benefits under the terms of the plan. We thus affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/21-2406/21-2406-2023-02-23.pdf?ts=1677178985
In Kathy Hayes v. Prudential Insurance Company of America, No. 21-2406 (4th Cir. 2/23/2023), the Fourth Circuit Court of Appeals says the following:
When Anthony Hayes’ employment ended, so did his employer-provided life insurance. Hayes then missed the deadline to convert his coverage to an individual policy. After Hayes died, his surviving spouse filed suit seeking relief under a provision of the Employee Retirement Income Security Act allowing “a participant or beneficiary” of an employee benefit plan “to recover benefits due” “under the terms of [the] plan.” 29 U.S.C. § 1132(a)(1)(B). We agree with the district court that the plan administrator did not abuse its discretion in concluding Hayes was not entitled to benefits under the terms of the plan. We thus affirm.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/21-2406/21-2406-2023-02-23.pdf?ts=1677178985
ERISA-Fourth Circuit Affirms District Court’s Dismissal Of Case, Finding that A Contract With Employees Had Not Been Created, So Plaintiff Had No Claim (Posted 3/24/2023)
In AFSCME Maryland Council v. Maryland, No. 22-1362 (4th Cir. 2/21/2023), the Fourth Circuit Court of Appeal says the following:
Appellant American Federation of State, County and Municipal Employees, Council 3 (“Appellant”) filed suit against the State of Maryland alleging that the State breached a statutorily formed contract with current state employees to provide them with certain prescription drug benefits upon retirement. Though the district court agreed that Maryland law created a contract, it held that the contract was unilateral in nature and that the promised benefits do not vest until an employee retires with sufficient years of service. Therefore, the district court determined that the current employees represented by Appellant had no vested contractual right to the retirement prescription drug benefits at issue here and dismissed the complaint. Though we affirm the dismissal of Appellant’s Complaint, we do so because we find that the statutory language does not create a contract with state employees.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/22-1362/22-1362-2023-02-21.pdf?ts=1677009807
In AFSCME Maryland Council v. Maryland, No. 22-1362 (4th Cir. 2/21/2023), the Fourth Circuit Court of Appeal says the following:
Appellant American Federation of State, County and Municipal Employees, Council 3 (“Appellant”) filed suit against the State of Maryland alleging that the State breached a statutorily formed contract with current state employees to provide them with certain prescription drug benefits upon retirement. Though the district court agreed that Maryland law created a contract, it held that the contract was unilateral in nature and that the promised benefits do not vest until an employee retires with sufficient years of service. Therefore, the district court determined that the current employees represented by Appellant had no vested contractual right to the retirement prescription drug benefits at issue here and dismissed the complaint. Though we affirm the dismissal of Appellant’s Complaint, we do so because we find that the statutory language does not create a contract with state employees.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/22-1362/22-1362-2023-02-21.pdf?ts=1677009807
Employee Benefits-IRS Releases Issue Snapshot of Plan Loan Offsets (Posted 3/23/2023)
The IRS begins the Snapshot by saying the following:
A plan loan offset occurs when a participant's account balance (or accrued benefit) is reduced to pay a defaulted loan. This may occur when the terms governing a plan loan require that the loan be repaid immediately or treated as in default as a result of certain events, such as an employee's termination. A Qualified Plan Loan Offset (QPLO) is a type of plan loan offset that meets certain requirements. This Issue Snapshot summarizes plan loan offsets and QPLOs.
See the Issue Snapshot for details. It may be found at: https://www.irs.gov/retirement-plans/plan-loan-offsets
The IRS begins the Snapshot by saying the following:
A plan loan offset occurs when a participant's account balance (or accrued benefit) is reduced to pay a defaulted loan. This may occur when the terms governing a plan loan require that the loan be repaid immediately or treated as in default as a result of certain events, such as an employee's termination. A Qualified Plan Loan Offset (QPLO) is a type of plan loan offset that meets certain requirements. This Issue Snapshot summarizes plan loan offsets and QPLOs.
See the Issue Snapshot for details. It may be found at: https://www.irs.gov/retirement-plans/plan-loan-offsets
ERISA-Eighth Circuit Upholds District Court’s Grant Of Accidental Death Benefits (Posted 3/22/2023)
In Yates v. Symetra Life Insurance Company, No. 22-1093 (8th Cir. Feb. 23, 2023), the Eighth Circuit Court of Appeals says the following:
After her husband died of a heroin overdose, Terri M. Yates sought accidental death benefits under an employer-sponsored benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001–1461. The plan’s insurer, Symetra Life Insurance Company, denied her claim, and Yates sued. The district court granted summary judgment in Yates’s favor. Symetra now appeals, arguing that Yates’s suit is barred by her failure to exhaust internal review procedures and that her husband’s death otherwise falls under an exclusion to coverage. Having jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/23/02/221093P.pdf
In Yates v. Symetra Life Insurance Company, No. 22-1093 (8th Cir. Feb. 23, 2023), the Eighth Circuit Court of Appeals says the following:
After her husband died of a heroin overdose, Terri M. Yates sought accidental death benefits under an employer-sponsored benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001–1461. The plan’s insurer, Symetra Life Insurance Company, denied her claim, and Yates sued. The district court granted summary judgment in Yates’s favor. Symetra now appeals, arguing that Yates’s suit is barred by her failure to exhaust internal review procedures and that her husband’s death otherwise falls under an exclusion to coverage. Having jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/23/02/221093P.pdf
Employment-Seventh Circuit Rules That FMLA Claims Of Interference And Retaliation Fail (Posted 3/21/2023)
In Juday v. FCA US LLC, No. 21-1414 (7th Cir. Jan. 12, 2023), the Seventh Circuit Court of Appeals says the following:
Michael Juday has worked for FCA US LLC (formerly Chrysler) for more than two decades. In 2014 he married his wife Becky, also a veteran FCA employee. The Judays work at the company’s transmission plant in Kokomo, Indiana.
In 2017 they submitted medical certifications from their healthcare providers to take intermittent leave from work under the Family and Medical Leave Act (“FMLA” or “the Act”), 29 U.S.C. §§ 2601 et seq., for periodic flare-ups of their serious health conditions. At the end of that year, FCA’s outside FMLA administrator notified the company that Michael and Becky had frequently taken overlapping periods of FMLA leave. FCA opened an investigation, and neither Michael nor Becky could explain why they had requested FMLA leave on so many of the same dates and times. At the conclusion of the investigation, FCA suspended the couple for providing false or misleading information in connection with their FMLA leave requests.
Michael Juday then filed suit accusing FCA of interfering with his rights under the Act and retaliating against him for using FMLA leave. The district judge entered summary judgment for FCA on both claims. We affirm. To prevail on his claims for FMLA interference and retaliation, Juday needed to present evidence that would permit a reasonable jury to find that his suspension was not based on an honest suspicion of FMLA abuse. He did not do so.
The case may be found at: http://media.ca7.uscourts.gov/cgi-bin/OpinionsWeb/processWebInputExternal.pl?Submit=Display&Path=Y2023/D01-12/C:21-1414:J:Sykes:aut:T:fnOp:N:2987090:S:0
In Juday v. FCA US LLC, No. 21-1414 (7th Cir. Jan. 12, 2023), the Seventh Circuit Court of Appeals says the following:
Michael Juday has worked for FCA US LLC (formerly Chrysler) for more than two decades. In 2014 he married his wife Becky, also a veteran FCA employee. The Judays work at the company’s transmission plant in Kokomo, Indiana.
In 2017 they submitted medical certifications from their healthcare providers to take intermittent leave from work under the Family and Medical Leave Act (“FMLA” or “the Act”), 29 U.S.C. §§ 2601 et seq., for periodic flare-ups of their serious health conditions. At the end of that year, FCA’s outside FMLA administrator notified the company that Michael and Becky had frequently taken overlapping periods of FMLA leave. FCA opened an investigation, and neither Michael nor Becky could explain why they had requested FMLA leave on so many of the same dates and times. At the conclusion of the investigation, FCA suspended the couple for providing false or misleading information in connection with their FMLA leave requests.
Michael Juday then filed suit accusing FCA of interfering with his rights under the Act and retaliating against him for using FMLA leave. The district judge entered summary judgment for FCA on both claims. We affirm. To prevail on his claims for FMLA interference and retaliation, Juday needed to present evidence that would permit a reasonable jury to find that his suspension was not based on an honest suspicion of FMLA abuse. He did not do so.
The case may be found at: http://media.ca7.uscourts.gov/cgi-bin/OpinionsWeb/processWebInputExternal.pl?Submit=Display&Path=Y2023/D01-12/C:21-1414:J:Sykes:aut:T:fnOp:N:2987090:S:0
Health Care- Department of Health & Human Service’s Office Of Child Support Enforcement Issues National Medical Support Notice Forms & Instructions (Posted 3/20.2023)
An accompanying Information Release says the following:
National Medical Support Notice Form
These documents serve as legal notice that the employee identified on this National Medical Support Notice (NMSN) is obligated by a court or administrative child support order to provide health care coverage for the child(ren) identified on this notice. This NMSN form replaces any medical support notice that the issuing agency has previously served with respect to the employee and the children listed on this notice.
The Notice has two parts:
View the Medical Support — FAQs for answers to employers’ common questions.
Supplemental Instructions for Employers, Employer Partners, and Child Support Agencies
The Supplemental Instructions (PDF) provide guidance for completing the OMB-approved Part A NMSN form. The instructions describe the contents of each field and indicate whether each field is mandatory or optional.
Part A Sample Form
This NMSN Part A sample form (PDF) has numbered fields that correspond to the numbers in the instructions.
State Medical Support matrix
This State Medical Support matrix provides state-specific information about medical support contact information, priority for withholding, state statute on medical support, and the state's definition of reasonable cost for medical support.
See the Information Release to obtain the actual National Medical Support Notice Forms and Instructions. It may be found at: https://www.acf.hhs.gov/css/form/national-medical-support-notice-forms-instructions
An accompanying Information Release says the following:
National Medical Support Notice Form
These documents serve as legal notice that the employee identified on this National Medical Support Notice (NMSN) is obligated by a court or administrative child support order to provide health care coverage for the child(ren) identified on this notice. This NMSN form replaces any medical support notice that the issuing agency has previously served with respect to the employee and the children listed on this notice.
The Notice has two parts:
- Part A - Notice to Withhold for Health Care Coverage (OMB 0970-0222) (PDF) for the employer to withhold any employee contributions required by the group health plan(s) in which the child(ren) is/are enrolled; and
- Part B - Medical Support Notice to the Plan Administrator (OMB 1210-0113) (PDF), which must be forwarded to the administrator of each group health plan identified by the employer to enroll the eligible child(ren), or completed by the employer if the employer serves as the health plan administrator.
View the Medical Support — FAQs for answers to employers’ common questions.
Supplemental Instructions for Employers, Employer Partners, and Child Support Agencies
The Supplemental Instructions (PDF) provide guidance for completing the OMB-approved Part A NMSN form. The instructions describe the contents of each field and indicate whether each field is mandatory or optional.
Part A Sample Form
This NMSN Part A sample form (PDF) has numbered fields that correspond to the numbers in the instructions.
State Medical Support matrix
This State Medical Support matrix provides state-specific information about medical support contact information, priority for withholding, state statute on medical support, and the state's definition of reasonable cost for medical support.
See the Information Release to obtain the actual National Medical Support Notice Forms and Instructions. It may be found at: https://www.acf.hhs.gov/css/form/national-medical-support-notice-forms-instructions
Employee Benefits-PBGC Issues Final Rule Governing The Allocation Of Assets In Single-Employer Plans; Interest Assumptions for Valuing Benefits (Posted 3/17/2023)
The PBGC says the following about the Final Rule:
SUMMARY: This final rule amends the Pension Benefit Guaranty Corporation’s regulation on Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the asset allocation regulation for plans with valuation dates in the second quarter of 2023. These interest assumptions are used for valuing benefits under terminating single-employer plans and for other purposes.
DATES: Effective April 1, 2023.
See the Final Rule for details. It may be found here: https://public-inspection.federalregister.gov/2023-05350.pdf
The PBGC says the following about the Final Rule:
SUMMARY: This final rule amends the Pension Benefit Guaranty Corporation’s regulation on Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the asset allocation regulation for plans with valuation dates in the second quarter of 2023. These interest assumptions are used for valuing benefits under terminating single-employer plans and for other purposes.
DATES: Effective April 1, 2023.
See the Final Rule for details. It may be found here: https://public-inspection.federalregister.gov/2023-05350.pdf
Employee Benefits-Seventh Circuit Rules On Insurer’s Decision To Terminate Disability Benefits (Posted 3/16/2023)
In Zall v. Standard Ins. Co., No. 22-1096 (7th Cir. Jan. 19, 2023), the Seventh Circuit Court of Appeals says the following:
Plaintiff-appellant Eric Zall worked more than twenty years as a dentist, but chronic pain and numbness in his neck and right arm made it impossible for him to keep working. In 2013, Zall filed a claim for long-term disability benefits under an insurance policy with defendant-appellee Standard Insurance Company. Standard approved his claim and began paying benefits. Six years later, Standard terminated Zall's benefits. Standard concluded that Zall's spinal condition and associated symptoms did not satisfy policy requirements for paying disability benefits for such conditions for more than two years without additional medical findings.
Zall filed this suit under ERISA, the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., which governs his policy with Standard. Zall contends that Standard's termination of his benefits was arbitrary and capricious on the merits. He also contends that Standard violated ERISA's procedural requirements by failing to afford him “a full and fair review ․ of the decision denying the claim.” 29 U.S.C. § 1133. The district court granted summary judgment for Standard. Zall v. Standard Ins. Co., 21-cv-19-slc, 2021 WL 6112638, at *1, *11 (W.D. Wis. Dec. 27, 2021).
Zall has appealed. We agree with Zall on the procedural issue, reverse summary judgment, and remand for further proceedings. The decisive legal issue here is which version of an amended procedural regulation issued under § 1133 applies to Standard's internal administrative review of its termination of Zall's benefits. The plain language of the 2018 amendments to the regulation shows that the amended version applies, and Standard failed to comply with it.
The case may be found here: https://caselaw.findlaw.com/us-7th-circuit/2177700.html
In Zall v. Standard Ins. Co., No. 22-1096 (7th Cir. Jan. 19, 2023), the Seventh Circuit Court of Appeals says the following:
Plaintiff-appellant Eric Zall worked more than twenty years as a dentist, but chronic pain and numbness in his neck and right arm made it impossible for him to keep working. In 2013, Zall filed a claim for long-term disability benefits under an insurance policy with defendant-appellee Standard Insurance Company. Standard approved his claim and began paying benefits. Six years later, Standard terminated Zall's benefits. Standard concluded that Zall's spinal condition and associated symptoms did not satisfy policy requirements for paying disability benefits for such conditions for more than two years without additional medical findings.
Zall filed this suit under ERISA, the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., which governs his policy with Standard. Zall contends that Standard's termination of his benefits was arbitrary and capricious on the merits. He also contends that Standard violated ERISA's procedural requirements by failing to afford him “a full and fair review ․ of the decision denying the claim.” 29 U.S.C. § 1133. The district court granted summary judgment for Standard. Zall v. Standard Ins. Co., 21-cv-19-slc, 2021 WL 6112638, at *1, *11 (W.D. Wis. Dec. 27, 2021).
Zall has appealed. We agree with Zall on the procedural issue, reverse summary judgment, and remand for further proceedings. The decisive legal issue here is which version of an amended procedural regulation issued under § 1133 applies to Standard's internal administrative review of its termination of Zall's benefits. The plain language of the 2018 amendments to the regulation shows that the amended version applies, and Standard failed to comply with it.
The case may be found here: https://caselaw.findlaw.com/us-7th-circuit/2177700.html
Employee Benefits-IRS Issues Final Forms ForAnnual Information Return/Reports (Posted 3/15/2023)
The IRS says the following about the document containing the Final Forms:
SUMMARY: This document contains final forms and instructions revisions for the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan effective for plan years beginning on or after January 1, 2023. The forms and instructions revisions relate to statutory amendments to the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (Code) enacted as part of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) for multiple-employer plans and groups of plans, as well as changes intended to improve reporting of certain plan financial information regarding audits and plan expenses and enhance the reporting of certain tax qualification and other compliance information by retirement plans.
There are also some minor changes that further improve defined benefit plan reporting by building on changes made to the forms for plan years beginning on or after January 1, 2022. The remaining changes are technical changes that are part of the annual rollover of the Form 5500 and Form 5500-SF forms and instructions. The revisions being made in this document affect employee pension and welfare benefit plans, plan sponsors, administrators, and service providers to plans subject to annual reporting requirements under ERISA and the Code. DATES: The final forms and instructions revisions in this document are effective for plan years beginning on or after January 1, 2023
The document containing the Final Forms may be found at: https://www.federalregister.gov/public-inspection/2023-02653/annual-information-returnreports
The IRS says the following about the document containing the Final Forms:
SUMMARY: This document contains final forms and instructions revisions for the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan effective for plan years beginning on or after January 1, 2023. The forms and instructions revisions relate to statutory amendments to the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (Code) enacted as part of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) for multiple-employer plans and groups of plans, as well as changes intended to improve reporting of certain plan financial information regarding audits and plan expenses and enhance the reporting of certain tax qualification and other compliance information by retirement plans.
There are also some minor changes that further improve defined benefit plan reporting by building on changes made to the forms for plan years beginning on or after January 1, 2022. The remaining changes are technical changes that are part of the annual rollover of the Form 5500 and Form 5500-SF forms and instructions. The revisions being made in this document affect employee pension and welfare benefit plans, plan sponsors, administrators, and service providers to plans subject to annual reporting requirements under ERISA and the Code. DATES: The final forms and instructions revisions in this document are effective for plan years beginning on or after January 1, 2023
The document containing the Final Forms may be found at: https://www.federalregister.gov/public-inspection/2023-02653/annual-information-returnreports
Employee Benefits-DOL Issues Final Regulations On Annual Reporting And Disclosure (Posted 3/14/2023)
The DOL says the following about the Final Regulations:
SUMMARY: This document contains amendments to Department of Labor (DOL) regulations relating to annual reporting requirements under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The amendments contained in this document conform the DOL reporting regulations to revisions to the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan being published in this issue of the Federal Register in a separate Notice of Final Forms Revisions (NFFR) jointly by DOL, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC). Conforming changes also are being made to the requirements for the summary annual report. The regulatory amendments in this rule and revisions in the NFFR affect employee benefit plans, plan sponsors, administrators, and service providers to plans subject to annual reporting requirements under ERISA and the Internal Revenue Code.
DATES: Effective date: This final rule is effective 60 days after date of publication in the Federal Register (the date of publication being February 24,2023).
See the Final Regulations for details. They may be found at: https://www.federalregister.gov/public-inspection/2023-02652/annual-reporting-and-disclosure
The DOL says the following about the Final Regulations:
SUMMARY: This document contains amendments to Department of Labor (DOL) regulations relating to annual reporting requirements under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The amendments contained in this document conform the DOL reporting regulations to revisions to the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan being published in this issue of the Federal Register in a separate Notice of Final Forms Revisions (NFFR) jointly by DOL, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC). Conforming changes also are being made to the requirements for the summary annual report. The regulatory amendments in this rule and revisions in the NFFR affect employee benefit plans, plan sponsors, administrators, and service providers to plans subject to annual reporting requirements under ERISA and the Internal Revenue Code.
DATES: Effective date: This final rule is effective 60 days after date of publication in the Federal Register (the date of publication being February 24,2023).
See the Final Regulations for details. They may be found at: https://www.federalregister.gov/public-inspection/2023-02652/annual-reporting-and-disclosure
Employment Law-Fourth Circuit Decides FMLA And Related Matters Pertaining To Plaintiff’s Discharge (Posted 3/13/2023)
In Roberts v. Gestamp West Virginia, LLC., No. 20-2202 (4th Cir. Aug. 15, 2022), the fourth Circuit Court of Appeals says the following:
Kasey Roberts appeals the district court’s grant of summary judgment to his former employer, Gestamp West Virginia, LLC, on his Family & Medical Leave Act (“FMLA”) and common law retaliatory-discharge claims. Gestamp fired Roberts after he missed work due to a recurring infection from an emergency appendectomy. The district court granted Gestamp’s summary judgment motion because Roberts, it said, didn’t comply with the company’s “usual and customary” absentee notice procedures, as the FMLA requires. 29 C.F.R. § 825.303(c). And Roberts’s common law claims failed because he hadn’t shown an FMLA violation.
On appeal, Roberts contends the district court erred because, through his dealings with Gestamp, the company’s “usual and customary” notice procedures for leaves of absence expanded beyond those in its written policy. And Roberts argues that he complied with his FMLA obligations by notifying Gestamp of his absences over Facebook Messenger, which the company had previously accepted. We agree with Roberts’s reading of the FMLA regulations and find that he’s raised a jury question on whether using Facebook Messenger satisfied the Act’s requirements. But Gestamp counters that even if Roberts’s initial notice were adequate, he neglected his FMLA obligation to update the company on the duration of his absence, defeating his FMLA-interference claim. On this too, Roberts has raised a material factual dispute to survive summary judgment. So we vacate the district court’s judgment on his interference claim and remand.
That said, we agree with Gestamp that the district court properly granted judgment against Roberts’s FMLA-retaliation and common law retaliatory-discharge claims. Because Roberts hasn’t offered enough evidence that Gestamp fired him in retaliation for exercising his FMLA rights, we affirm the district court’s judgment on those claims.
The case may be found at: https://www.ca4.uscourts.gov/opinions/202202.p.pdf
In Roberts v. Gestamp West Virginia, LLC., No. 20-2202 (4th Cir. Aug. 15, 2022), the fourth Circuit Court of Appeals says the following:
Kasey Roberts appeals the district court’s grant of summary judgment to his former employer, Gestamp West Virginia, LLC, on his Family & Medical Leave Act (“FMLA”) and common law retaliatory-discharge claims. Gestamp fired Roberts after he missed work due to a recurring infection from an emergency appendectomy. The district court granted Gestamp’s summary judgment motion because Roberts, it said, didn’t comply with the company’s “usual and customary” absentee notice procedures, as the FMLA requires. 29 C.F.R. § 825.303(c). And Roberts’s common law claims failed because he hadn’t shown an FMLA violation.
On appeal, Roberts contends the district court erred because, through his dealings with Gestamp, the company’s “usual and customary” notice procedures for leaves of absence expanded beyond those in its written policy. And Roberts argues that he complied with his FMLA obligations by notifying Gestamp of his absences over Facebook Messenger, which the company had previously accepted. We agree with Roberts’s reading of the FMLA regulations and find that he’s raised a jury question on whether using Facebook Messenger satisfied the Act’s requirements. But Gestamp counters that even if Roberts’s initial notice were adequate, he neglected his FMLA obligation to update the company on the duration of his absence, defeating his FMLA-interference claim. On this too, Roberts has raised a material factual dispute to survive summary judgment. So we vacate the district court’s judgment on his interference claim and remand.
That said, we agree with Gestamp that the district court properly granted judgment against Roberts’s FMLA-retaliation and common law retaliatory-discharge claims. Because Roberts hasn’t offered enough evidence that Gestamp fired him in retaliation for exercising his FMLA rights, we affirm the district court’s judgment on those claims.
The case may be found at: https://www.ca4.uscourts.gov/opinions/202202.p.pdf
Employee Benefits-IRS Issues Regulations On Electronic Filing Requirements (Posted 3/10/2023)
The IRS says the following about these Regulations:
This document contains final regulations amending the rules for filing electronically and affects persons required to file partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns. The final regulations reflect changes made by the Taxpayer First Act (TFA) and are consistent with the TFA’s emphasis on increasing electronic filing. These regulations are effective on 2/23/2023.
See the Regulations for details. The Regulations can be found here: https://www.federalregister.gov/documents/2023/02/23/2023-03710/electronic-filing-requirements-for-specified-returns-and-other-documents
The Regulations are accompanied by a News Release which says the following:
IR-2023-31, Feb. 21, 2023
WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued final regulations amending the rules for filing returns and other documents electronically (e-file). These regulations will require certain filers to e-file beginning in 2024.
T.D. 9972 affects filers of partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports and certain excise tax returns. The final regulations reflect changes made by the Taxpayer First Act (TFA) to increase e-filing without undue hardship on taxpayers.
Specifically, the final regulations:
To help with this process, the IRS created a new, free online portal last month to help businesses file Form 1099 series information returns electronically. Known as the Information Returns Intake System (IRIS), this free electronic filing service is secure, accurate and requires no special software. Though available to any business of any size, IRIS may be especially helpful to any small business that currently sends their 1099 forms on paper to the IRS.
In recent years there has been tremendous growth in the availability of e-file services and the use of e-file across the tax filing spectrum. In 2021, about 82% of all corporate income tax returns were e-filed, and almost 90% of partnership tax returns were e-filed. Further reducing the volume of paper returns filed frees up staff and resources to further enhance services for taxpayers and improves overall efficiencies while reducing postage, printing, shipping and storage and their associated costs and burdens.
The IRS receives nearly 4 billion information returns per year and expects to receive nearly 5 billion by 2028. In 2019, the IRS still received nearly 40 million paper information returns, even though approximately 99% of all information returns for that year were e-filed.
The final regulations generally provide hardship waivers for filers that would experience hardship in complying with the e-filing requirements and administrative exemptions from the e-filing requirements to promote effective and efficient tax administration.
The News Release may be found at: https://www.irs.gov/newsroom/irs-and-treasury-issue-final-regulations-on-e-file-for-businesses
The IRS says the following about these Regulations:
This document contains final regulations amending the rules for filing electronically and affects persons required to file partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns. The final regulations reflect changes made by the Taxpayer First Act (TFA) and are consistent with the TFA’s emphasis on increasing electronic filing. These regulations are effective on 2/23/2023.
See the Regulations for details. The Regulations can be found here: https://www.federalregister.gov/documents/2023/02/23/2023-03710/electronic-filing-requirements-for-specified-returns-and-other-documents
The Regulations are accompanied by a News Release which says the following:
IR-2023-31, Feb. 21, 2023
WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued final regulations amending the rules for filing returns and other documents electronically (e-file). These regulations will require certain filers to e-file beginning in 2024.
T.D. 9972 affects filers of partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports and certain excise tax returns. The final regulations reflect changes made by the Taxpayer First Act (TFA) to increase e-filing without undue hardship on taxpayers.
Specifically, the final regulations:
- reduce the 250-return threshold enacted in prior regulations to generally require electronic filing by filers of 10 or more returns in a calendar year. The final regulations also create several new regulations to require e-filing of certain returns and other documents not previously required to be e-filed;
- require filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold and is required to e-file their information returns. Earlier regulations applied the 250-return threshold separately to each type of information return covered by the regulations;
- eliminate the e-filing exception for income tax returns of corporations that report total assets under $10 million at the end of their taxable year, and
- require partnerships with more than 100 partners to e-file information returns, and they require partnerships required to file at least 10 returns of any type during the calendar year to e-file their partnership return.
To help with this process, the IRS created a new, free online portal last month to help businesses file Form 1099 series information returns electronically. Known as the Information Returns Intake System (IRIS), this free electronic filing service is secure, accurate and requires no special software. Though available to any business of any size, IRIS may be especially helpful to any small business that currently sends their 1099 forms on paper to the IRS.
In recent years there has been tremendous growth in the availability of e-file services and the use of e-file across the tax filing spectrum. In 2021, about 82% of all corporate income tax returns were e-filed, and almost 90% of partnership tax returns were e-filed. Further reducing the volume of paper returns filed frees up staff and resources to further enhance services for taxpayers and improves overall efficiencies while reducing postage, printing, shipping and storage and their associated costs and burdens.
The IRS receives nearly 4 billion information returns per year and expects to receive nearly 5 billion by 2028. In 2019, the IRS still received nearly 40 million paper information returns, even though approximately 99% of all information returns for that year were e-filed.
The final regulations generally provide hardship waivers for filers that would experience hardship in complying with the e-filing requirements and administrative exemptions from the e-filing requirements to promote effective and efficient tax administration.
The News Release may be found at: https://www.irs.gov/newsroom/irs-and-treasury-issue-final-regulations-on-e-file-for-businesses
ERISA-Ninth Circuit Enforces Settlement Of The Claims (Posted 3/9/2023)
In Infoneuro Group v. Aetna Life Ins. Co., No. 22-55239 (9th Cir. Feb. 16, 2023 ( Unpublished), the Ninth Circuit Court of Appeals says the following:
Playa Advanced Surgical Institute and affiliated parties (“Playa”) sued Aetna Life Insurance Company (“Aetna”) under ERISA for unpaid medical bills. Thedistrict court granted summary judgment to Aetna on most of Playa’s claims, holding that Playa lacked standing to bring these claims, because the right to bring such a suit belonged to the patients, not to Playa. The parties then engaged in a settlement conference and agreed to settle and dismiss all of their claims and counterclaims. When the parties could not agree on written language to execute their settlement, the district court granted Aetna’s motion to enforce the settlement. Playa now appeals both of the district court’s orders. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/memoranda/2023/02/16/22-55239.pdf
In Infoneuro Group v. Aetna Life Ins. Co., No. 22-55239 (9th Cir. Feb. 16, 2023 ( Unpublished), the Ninth Circuit Court of Appeals says the following:
Playa Advanced Surgical Institute and affiliated parties (“Playa”) sued Aetna Life Insurance Company (“Aetna”) under ERISA for unpaid medical bills. Thedistrict court granted summary judgment to Aetna on most of Playa’s claims, holding that Playa lacked standing to bring these claims, because the right to bring such a suit belonged to the patients, not to Playa. The parties then engaged in a settlement conference and agreed to settle and dismiss all of their claims and counterclaims. When the parties could not agree on written language to execute their settlement, the district court granted Aetna’s motion to enforce the settlement. Playa now appeals both of the district court’s orders. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/memoranda/2023/02/16/22-55239.pdf
ERISA-Seventh Circuit Reverses District Court Dismissal for Failure To State A Claim For Relief, As The Collective Bargaining Agreements Were Renewed (Posted 3/8/2023)
In Cent. States, Se. & Sw. Areas Pension Fund v. Transervice Logistics, Inc., No. 20-3437 (7th Cir. Dec. 22, 2022), the Seventh Circuit Court of Appeals says the following:
Defendants Transervice Logistics, Inc. and Zenith Logistics, Inc. (“the employers”) agreed that for the entire duration of two collective bargaining agreements, they would make pension contributions on behalf of covered employees to plaintiff Central States, Southeast and Southwest Areas Pension Fund. Both collective bargaining agreements contained so-called “evergreen clauses” that extended them a year at a time until either party provided timely written notice expressing an “intention to terminate” the agreements.
Both agreements were set to expire on January 31, 2019. After the window for timely notice of intention to terminate on that date had passed, the employers and the union signed new collective bargaining agreements requiring pension contributions to a different fund beginning February 1, 2019. The employers notified the plaintiff fund that they were ceasing contributions, relying on letters the union sent them back in November 2018. The question in these consolidated appeals is whether those letters expressed the union’s intent to terminate the existing collective bargaining agreements, so as to satisfy the termination procedure in the evergreen clauses and end the employers’ obligations to contribute to the plaintiff fund on January 31, 2019.
Our answer is no. The supposed termination letters did not mention termination. They noted the date that the collective bargaining agreements would expire and expressed a desire to meet to negotiate new agreements. But neither of these points communicated an intent to terminate the existing agreements. In the context of an evergreen clause, expiration and termination are distinct concepts. A desire to negotiate a new contract is quite consistent with a desire to leave the existing agreement in place unless and until a new deal is reached. The old agreements thus renewed under the evergreen clauses, and the defendant employers remained obligated to contribute to the plaintiff fund for one more year. We therefore reverse the district court’s dismissals for failure to state a claim for relief.
The case may be found at: https://www.govinfo.gov/content/pkg/USCOURTS-ca7-20-03437/pdf/USCOURTS-ca7-20-03437-0.pdf
In Cent. States, Se. & Sw. Areas Pension Fund v. Transervice Logistics, Inc., No. 20-3437 (7th Cir. Dec. 22, 2022), the Seventh Circuit Court of Appeals says the following:
Defendants Transervice Logistics, Inc. and Zenith Logistics, Inc. (“the employers”) agreed that for the entire duration of two collective bargaining agreements, they would make pension contributions on behalf of covered employees to plaintiff Central States, Southeast and Southwest Areas Pension Fund. Both collective bargaining agreements contained so-called “evergreen clauses” that extended them a year at a time until either party provided timely written notice expressing an “intention to terminate” the agreements.
Both agreements were set to expire on January 31, 2019. After the window for timely notice of intention to terminate on that date had passed, the employers and the union signed new collective bargaining agreements requiring pension contributions to a different fund beginning February 1, 2019. The employers notified the plaintiff fund that they were ceasing contributions, relying on letters the union sent them back in November 2018. The question in these consolidated appeals is whether those letters expressed the union’s intent to terminate the existing collective bargaining agreements, so as to satisfy the termination procedure in the evergreen clauses and end the employers’ obligations to contribute to the plaintiff fund on January 31, 2019.
Our answer is no. The supposed termination letters did not mention termination. They noted the date that the collective bargaining agreements would expire and expressed a desire to meet to negotiate new agreements. But neither of these points communicated an intent to terminate the existing agreements. In the context of an evergreen clause, expiration and termination are distinct concepts. A desire to negotiate a new contract is quite consistent with a desire to leave the existing agreement in place unless and until a new deal is reached. The old agreements thus renewed under the evergreen clauses, and the defendant employers remained obligated to contribute to the plaintiff fund for one more year. We therefore reverse the district court’s dismissals for failure to state a claim for relief.
The case may be found at: https://www.govinfo.gov/content/pkg/USCOURTS-ca7-20-03437/pdf/USCOURTS-ca7-20-03437-0.pdf
ERISA-Fifth Circuit Rules On Whether Texas Statute Provides A Private Cause of Action And Whether A Claim Filed Under The Statute Is Preempted By ERISA (Posted 3/7/2023)
In ACS Primary v. UnitedHealthcare, No. 21-20168 (Fifth Circuit 2/16/2023), the Fifth Circuit Court of Appeals says the following:
We previously certified a question to the Texas Supreme Court asking whether the Texas Insurance Code’s Emergency Care Statutes authorize a private cause of action. After receiving a response in the negative, we REVERSE the judgment below.
In Texas, hospital employees may not deny individuals emergency care due to their inability to pay. Tex. Health & Safety Code Ann. §§ 241.027(b)(5), 241.028(c)(2), 311.022(a)–(b). This raises the prospect that physicians will treat patients who are either uninsured or whose insurance does not cover such treatment. To ease the economic burdens associated with this care, the Texas Insurance Code requires that insurance companies insuring patients who receive emergency treatment by out-of-network healthcare providers reimburse those providers at their “usual and customary rate” or an agreed rate (the “Emergency Care Statutes”). Tex. Ins. Code Ann. §§ 1271.155(a), 1301.0053(a), 1301.155(b). Since January 2016, Plaintiffs-Appellees, emergency care physician groups in Texas (the “Plaintiff Doctors”), have provided various emergency medical services to patients enrolled in health insurance plans insured by Defendants-Appellants UnitedHealthcare Insurance Company or UnitedHealthcare of Texas, Incorporated (collectively, “UHC”). The Plaintiff Doctors are not within UHC’s provider network. In their operative complaint, the Plaintiff Doctors allege (among other claims) that UHC has failed to remit the “usual and customary rate” for the emergency care that the Plaintiff Doctors provide to patients insured by UHC in violation of the Emergency Care Statutes.
UHC moved to dismiss the Plaintiff Doctors’ complaint, which was denied in part by the district court. Specifically, the court rejected UHC’s argument that the Emergency Care Statutes did not authorize a private cause of action. The court also held that the Plaintiff Case: Doctors’ claim under the Emergency Care Statutes was not otherwise preempted by the Employee Retirement Income Security Act (“ERISA”). UHC immediately sought interlocutory review of two issues: (1) whether the Emergency Care Statutes authorize an implied private cause of action, and (2) whether the Plaintiff Doctors’ claim under the Emergency Care Statutes is otherwise preempted by ERISA. Both the district court and this circuit granted UHC’s request for interlocutory review. The Plaintiff Doctors subsequently moved to certify the first issue—whether the Emergency Care Statutes provide for a private cause of action—to the Texas Supreme Court. In February 2022, we granted the Plaintiff Doctors’ motion and certified the following question to the Texas Supreme Court: Do §§ 1271.155(a), 1301.0053(a), and 1301.155(b) of the Texas Insurance Code authorize Plaintiff Doctors to bring a private cause of action against UHC for UHC’s failure to reimburse Plaintiff Doctors for out-of-network emergency care at a “usual and customary” rate? ACS Primary Care Physicians Sw., P.A. v. UnitedHealthcare Ins. Co., 26 F.4th 716, 720 (5th Cir. 2022).
In January 2023, the Texas Supreme Court answered the certified question in the negative, holding that the Texas Insurance Code “does not create a private cause of action for claims under the Emergency Care Statutes.” Texas Med. Res., LLP v. Molina Healthcare of Tex., Inc., No. 21- 1 The district court, however, dismissed the Plaintiff Doctors’ other claims for breach of an implied-in-fact contract and quantum meruit, which are not at issue on appeal. We withheld judgment on the second issue before us on interlocutory review: whether the Plaintiff Doctors’ claim under the Emergency Care Statutes was preempted by ERISA. Therefore, the Plaintiff Doctors’ claim for violation of the Emergency Care Statutes must be dismissed. Because there is no private cause of action under the Emergency Care Statutes, the second issue before us—whether the Plaintiff Doctors’ claim under the Emergency Care Statutes is otherwise preempted by ERISA—is now moot. Accordingly, we REVERSE the district court’s judgment denying UHC’s motion to dismiss the Plaintiff Doctors’ claim for violation of the Emergency Care Statutes and REMAND for further proceedings not inconsistent with this opinion.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca5/21-20168/21-20168-2023-02-16.pdf?ts=1676593864
In ACS Primary v. UnitedHealthcare, No. 21-20168 (Fifth Circuit 2/16/2023), the Fifth Circuit Court of Appeals says the following:
We previously certified a question to the Texas Supreme Court asking whether the Texas Insurance Code’s Emergency Care Statutes authorize a private cause of action. After receiving a response in the negative, we REVERSE the judgment below.
In Texas, hospital employees may not deny individuals emergency care due to their inability to pay. Tex. Health & Safety Code Ann. §§ 241.027(b)(5), 241.028(c)(2), 311.022(a)–(b). This raises the prospect that physicians will treat patients who are either uninsured or whose insurance does not cover such treatment. To ease the economic burdens associated with this care, the Texas Insurance Code requires that insurance companies insuring patients who receive emergency treatment by out-of-network healthcare providers reimburse those providers at their “usual and customary rate” or an agreed rate (the “Emergency Care Statutes”). Tex. Ins. Code Ann. §§ 1271.155(a), 1301.0053(a), 1301.155(b). Since January 2016, Plaintiffs-Appellees, emergency care physician groups in Texas (the “Plaintiff Doctors”), have provided various emergency medical services to patients enrolled in health insurance plans insured by Defendants-Appellants UnitedHealthcare Insurance Company or UnitedHealthcare of Texas, Incorporated (collectively, “UHC”). The Plaintiff Doctors are not within UHC’s provider network. In their operative complaint, the Plaintiff Doctors allege (among other claims) that UHC has failed to remit the “usual and customary rate” for the emergency care that the Plaintiff Doctors provide to patients insured by UHC in violation of the Emergency Care Statutes.
UHC moved to dismiss the Plaintiff Doctors’ complaint, which was denied in part by the district court. Specifically, the court rejected UHC’s argument that the Emergency Care Statutes did not authorize a private cause of action. The court also held that the Plaintiff Case: Doctors’ claim under the Emergency Care Statutes was not otherwise preempted by the Employee Retirement Income Security Act (“ERISA”). UHC immediately sought interlocutory review of two issues: (1) whether the Emergency Care Statutes authorize an implied private cause of action, and (2) whether the Plaintiff Doctors’ claim under the Emergency Care Statutes is otherwise preempted by ERISA. Both the district court and this circuit granted UHC’s request for interlocutory review. The Plaintiff Doctors subsequently moved to certify the first issue—whether the Emergency Care Statutes provide for a private cause of action—to the Texas Supreme Court. In February 2022, we granted the Plaintiff Doctors’ motion and certified the following question to the Texas Supreme Court: Do §§ 1271.155(a), 1301.0053(a), and 1301.155(b) of the Texas Insurance Code authorize Plaintiff Doctors to bring a private cause of action against UHC for UHC’s failure to reimburse Plaintiff Doctors for out-of-network emergency care at a “usual and customary” rate? ACS Primary Care Physicians Sw., P.A. v. UnitedHealthcare Ins. Co., 26 F.4th 716, 720 (5th Cir. 2022).
In January 2023, the Texas Supreme Court answered the certified question in the negative, holding that the Texas Insurance Code “does not create a private cause of action for claims under the Emergency Care Statutes.” Texas Med. Res., LLP v. Molina Healthcare of Tex., Inc., No. 21- 1 The district court, however, dismissed the Plaintiff Doctors’ other claims for breach of an implied-in-fact contract and quantum meruit, which are not at issue on appeal. We withheld judgment on the second issue before us on interlocutory review: whether the Plaintiff Doctors’ claim under the Emergency Care Statutes was preempted by ERISA. Therefore, the Plaintiff Doctors’ claim for violation of the Emergency Care Statutes must be dismissed. Because there is no private cause of action under the Emergency Care Statutes, the second issue before us—whether the Plaintiff Doctors’ claim under the Emergency Care Statutes is otherwise preempted by ERISA—is now moot. Accordingly, we REVERSE the district court’s judgment denying UHC’s motion to dismiss the Plaintiff Doctors’ claim for violation of the Emergency Care Statutes and REMAND for further proceedings not inconsistent with this opinion.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca5/21-20168/21-20168-2023-02-16.pdf?ts=1676593864
Employee Benefits-CMS Issues Notice On Payment Disputes Between Providers And Health Plans (Posted 3/6/2023)
The Notice begins as follows:
February 10, 2023
On February 6, 2023, the U.S. District Court for the Eastern District of Texas issued a judgment and order in Texas Medical Association, et al. v. United States Department of Health and Human Services, Case No. 6:22-cv-372 (TMA II), vacating certain portions of 45 C.F.R. § 149.510(c), 26 C.F.R. § 54.9816-8(c), and 29 C.F.R. § 2590-716-8(c), which are parallel provisions governing the Federal Independent Dispute Resolution (IDR) process applicable to all payment disputes. The court also vacated the entirety of 45 C.F.R. § 149.520(b)(3), 26 C.F.R. § 54.9817-2(b)(3), and 29 C.F.R. § 2590-717-2(b)(3), which are parallel provisions applicable to air ambulance payment disputes.
As a result of the TMA II decision, the Departments are in the process of evaluating and updating Federal IDR process guidance, systems, and related documents to make them consistent with the TMA II decision. Effective immediately, certified IDR entities should not issue new payment determinations until receiving further guidance from the Departments. Certified IDR entities also should recall any payment determinations issued after February 6, 2023. Certified IDR entities should continue working through other parts of the IDR process as they wait for additional direction from the Departments.
See the Notice for additional details. The Notice may be found at: https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans
The Notice begins as follows:
February 10, 2023
On February 6, 2023, the U.S. District Court for the Eastern District of Texas issued a judgment and order in Texas Medical Association, et al. v. United States Department of Health and Human Services, Case No. 6:22-cv-372 (TMA II), vacating certain portions of 45 C.F.R. § 149.510(c), 26 C.F.R. § 54.9816-8(c), and 29 C.F.R. § 2590-716-8(c), which are parallel provisions governing the Federal Independent Dispute Resolution (IDR) process applicable to all payment disputes. The court also vacated the entirety of 45 C.F.R. § 149.520(b)(3), 26 C.F.R. § 54.9817-2(b)(3), and 29 C.F.R. § 2590-717-2(b)(3), which are parallel provisions applicable to air ambulance payment disputes.
As a result of the TMA II decision, the Departments are in the process of evaluating and updating Federal IDR process guidance, systems, and related documents to make them consistent with the TMA II decision. Effective immediately, certified IDR entities should not issue new payment determinations until receiving further guidance from the Departments. Certified IDR entities also should recall any payment determinations issued after February 6, 2023. Certified IDR entities should continue working through other parts of the IDR process as they wait for additional direction from the Departments.
See the Notice for additional details. The Notice may be found at: https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans
Employee Benefits-IRS Issues 2022 Publication 502, Medical And Dental Expenses and Publication And 2022 Publication 503, Child And Dependent Care Expenses (Posted 3/3/2023)
Here is What’s New for Publication 502:
Standard mileage rate. The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 18 cents a mile from January 1, 2022, through June 30, 2022, and 22 cents a mile from July 1, 2022, through December 31, 2022. See Transportation under What Medical Expenses Are Includible, later.
Health coverage tax credit (HCTC). The HCTC was not extended. The credit is not available after 2021. If you are an eligible trade adjustment assistance (TAA) recipient, an alternative TAA recipient, a reemployment TAA recipient or a Pension Benefit Guaranty Corporation payee, then you will no longer use Form 8885 before completing Schedule A, line 1.
Publication 502 may be found here: https://www.irs.gov/pub/irs-prior/p502--2022.pdf
Here is What’s New for Publication 503:
The 2021 enhancements to the credit for child and dependent care expenses have expired. The changes to the credit for child and dependent care expenses for 2021 under the American Rescue Plan Act of 2021 have expired. For 2022, the credit for child and dependent care expenses is nonrefundable and you may claim the credit on qualifying employment-related expenses of up to $3,000 if you had one qualifying person, or $6,000 if you had two or more qualifying persons. The maximum credit is 35% of your employment-related expenses. The more you earn the lower the percentage of employment-related expenses that are considered in determining the credit. Once your adjusted gross income is over $43,000, the maximum credit is 20% of your employment-related expenses. See the table under Amount of Credit, later. For additional information about the credit, see Form 2441 and its instructions, available at IRS.gov/Form2441.
The 2021 enhancements to dependent care benefits have expired. The changes to dependent care benefits under the American Rescue Plan Act of 2021 have expired. For 2022, the maximum amount that can be excluded from an employee’s income through a dependent care assistance program is $5,000 ($2,500 if married filing separately). Dependent care benefits are reported on Form 2441, line 12.
Temporary special rules for dependent care flexible spending arrangements (FSAs). Section 214 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 provides temporary COVID-19 relief for dependent care FSAs. This legislation allows employers to amend their dependent care plan to allow unused amounts to be used in a subsequent year. Unused amounts from 2020 and/or 2021 are added to the maximum amount of dependent care benefits that are allowed for 2022. For more information, see the line 13 instructions in the Instructions for Form 2441; Notice 2021-15, 2021-10 I.R.B. 898 and Notice 2021-26, 2021-21 I.R.B. 1157.
Publication 503 may be found here: https://www.irs.gov/pub/irs-prior/p503--2022.pdf
Here is What’s New for Publication 502:
Standard mileage rate. The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 18 cents a mile from January 1, 2022, through June 30, 2022, and 22 cents a mile from July 1, 2022, through December 31, 2022. See Transportation under What Medical Expenses Are Includible, later.
Health coverage tax credit (HCTC). The HCTC was not extended. The credit is not available after 2021. If you are an eligible trade adjustment assistance (TAA) recipient, an alternative TAA recipient, a reemployment TAA recipient or a Pension Benefit Guaranty Corporation payee, then you will no longer use Form 8885 before completing Schedule A, line 1.
Publication 502 may be found here: https://www.irs.gov/pub/irs-prior/p502--2022.pdf
Here is What’s New for Publication 503:
The 2021 enhancements to the credit for child and dependent care expenses have expired. The changes to the credit for child and dependent care expenses for 2021 under the American Rescue Plan Act of 2021 have expired. For 2022, the credit for child and dependent care expenses is nonrefundable and you may claim the credit on qualifying employment-related expenses of up to $3,000 if you had one qualifying person, or $6,000 if you had two or more qualifying persons. The maximum credit is 35% of your employment-related expenses. The more you earn the lower the percentage of employment-related expenses that are considered in determining the credit. Once your adjusted gross income is over $43,000, the maximum credit is 20% of your employment-related expenses. See the table under Amount of Credit, later. For additional information about the credit, see Form 2441 and its instructions, available at IRS.gov/Form2441.
The 2021 enhancements to dependent care benefits have expired. The changes to dependent care benefits under the American Rescue Plan Act of 2021 have expired. For 2022, the maximum amount that can be excluded from an employee’s income through a dependent care assistance program is $5,000 ($2,500 if married filing separately). Dependent care benefits are reported on Form 2441, line 12.
Temporary special rules for dependent care flexible spending arrangements (FSAs). Section 214 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 provides temporary COVID-19 relief for dependent care FSAs. This legislation allows employers to amend their dependent care plan to allow unused amounts to be used in a subsequent year. Unused amounts from 2020 and/or 2021 are added to the maximum amount of dependent care benefits that are allowed for 2022. For more information, see the line 13 instructions in the Instructions for Form 2441; Notice 2021-15, 2021-10 I.R.B. 898 and Notice 2021-26, 2021-21 I.R.B. 1157.
Publication 503 may be found here: https://www.irs.gov/pub/irs-prior/p503--2022.pdf
Employment-DOL Issues Field Assistance Bulletin On Telework Under the Fair Labor Standards Act And Family And Medical Leave Act (Posted 3/2/2023)
In FAB 2023-1, the DOL says the following:
This Field Assistance Bulletin (“FAB”) provides guidance to Wage and Hour Division (WHD) field staff regarding how to ensure workers who telework are paid properly under the Fair Labor Standards Act (FLSA), how to apply protections under the FLSA that provide reasonable break time for nursing employees to express milk while teleworking from their home or another location, and how to apply eligibility rules under the Family and Medical Leave Act (FMLA) when employees telework or work away from an employer’s facility.
See the FAB for details. It may be found at: https://www.dol.gov/sites/dolgov/files/WHD/fab/2023-1.pdf
In FAB 2023-1, the DOL says the following:
This Field Assistance Bulletin (“FAB”) provides guidance to Wage and Hour Division (WHD) field staff regarding how to ensure workers who telework are paid properly under the Fair Labor Standards Act (FLSA), how to apply protections under the FLSA that provide reasonable break time for nursing employees to express milk while teleworking from their home or another location, and how to apply eligibility rules under the Family and Medical Leave Act (FMLA) when employees telework or work away from an employer’s facility.
See the FAB for details. It may be found at: https://www.dol.gov/sites/dolgov/files/WHD/fab/2023-1.pdf
Employment-DOL Issues Letter On Application Of FMLA To Limitation Of The Workday (Posted 3/1/2023)
In Letter FMLA2023-1-A, the DOL says the following:
This letter responds to your request for an opinion concerning whether the Family and Medical Leave Act (FMLA) entitles an employee to limit their workday to eight hours a day for an indefinite period of time because of a chronic serious health condition, where that employee normally works in excess of eight hours a day. You suggest that it may be preferable to treat this restriction as a reasonable accommodation under the Americans with Disabilities Act (ADA). You represent that you do not seek this opinion for any party that the Wage and Hour Division (WHD) is currently investigating or for use in any litigation that commenced prior to your request. For the reasons set forth below, an eligible employee with a serious health condition that necessitates limited hours may use FMLA leave to work a reduced number of hours per day (or week) for an indefinite period of time as long as the employee does not exhaust their FMLA leave entitlement.
See the Letter for details. It may be found at: https://www.dol.gov/sites/dolgov/files/WHD/opinion-letters/FMLA/2023_02_09_01_FMLA.pdf
In Letter FMLA2023-1-A, the DOL says the following:
This letter responds to your request for an opinion concerning whether the Family and Medical Leave Act (FMLA) entitles an employee to limit their workday to eight hours a day for an indefinite period of time because of a chronic serious health condition, where that employee normally works in excess of eight hours a day. You suggest that it may be preferable to treat this restriction as a reasonable accommodation under the Americans with Disabilities Act (ADA). You represent that you do not seek this opinion for any party that the Wage and Hour Division (WHD) is currently investigating or for use in any litigation that commenced prior to your request. For the reasons set forth below, an eligible employee with a serious health condition that necessitates limited hours may use FMLA leave to work a reduced number of hours per day (or week) for an indefinite period of time as long as the employee does not exhaust their FMLA leave entitlement.
See the Letter for details. It may be found at: https://www.dol.gov/sites/dolgov/files/WHD/opinion-letters/FMLA/2023_02_09_01_FMLA.pdf
Employee Benefits-EBSA Issues Notice Re: Comment Period For Amendments To The Voluntary Fiduciary Correction Program (Posted 1/28/2023)
The Notice is summarized as follows:
This document reopens the comment period with respect to amendments to the Voluntary Fiduciary Correction Program (VFC Program or Program) under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and to the proposed amendment to Prohibited Transaction Exemption 2002-51 (PTE 2002-51), both published in the Federal Register on November 21, 2022. The Employee Benefits Security Administration (EBSA) published the modifications to the Program and a proposed amendment to PTE 2002-51 to both simplify and expand the original VFC Program, and solicited comment from interested persons by January 20, 2023. On December 29, 2022, the Consolidated Appropriations Act, 2023, which includes a provision pertaining to the VFC Program, was signed into law. The Department is reopening the comment period to allow commenters to address any issues raised by the new statutory provision.
DATES: The comment periods for the documents published on November 21, 2022, at 87 FR 70753 and 87 FR 71164, are reopened. Written comments should be submitted on or before 60 days after date of publication (of this Notice) in the Federal Register (scheduled to be 2/14/2023). The Department will notify the public of the availability of the amended and restated VFC Program in a subsequent Federal Register document. The Department will also publish any final amendments to PTE 2002-51 in a subsequent Federal Register document.
See the Notice for details. It may be found here: https://www.federalregister.gov/public-inspection/2023-02545/amendment-and-restatement-of-voluntary-fiduciary-correction-program
The Notice is summarized as follows:
This document reopens the comment period with respect to amendments to the Voluntary Fiduciary Correction Program (VFC Program or Program) under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and to the proposed amendment to Prohibited Transaction Exemption 2002-51 (PTE 2002-51), both published in the Federal Register on November 21, 2022. The Employee Benefits Security Administration (EBSA) published the modifications to the Program and a proposed amendment to PTE 2002-51 to both simplify and expand the original VFC Program, and solicited comment from interested persons by January 20, 2023. On December 29, 2022, the Consolidated Appropriations Act, 2023, which includes a provision pertaining to the VFC Program, was signed into law. The Department is reopening the comment period to allow commenters to address any issues raised by the new statutory provision.
DATES: The comment periods for the documents published on November 21, 2022, at 87 FR 70753 and 87 FR 71164, are reopened. Written comments should be submitted on or before 60 days after date of publication (of this Notice) in the Federal Register (scheduled to be 2/14/2023). The Department will notify the public of the availability of the amended and restated VFC Program in a subsequent Federal Register document. The Department will also publish any final amendments to PTE 2002-51 in a subsequent Federal Register document.
See the Notice for details. It may be found here: https://www.federalregister.gov/public-inspection/2023-02545/amendment-and-restatement-of-voluntary-fiduciary-correction-program
Employee Benefits-Third Circuit Reject Ex-Spouse’s Claim For Life Insurance Benefits (Posted 1/27/2023)
In Staropoli v. Metropolitan Life Insurance Co; JP Morgan Chase Bank NA, No. 21-2500 (3d Cir. 2/7/2023), the Third Circuit Court of Appeals says the following:
This case arises out of Defendants’ failure to pay benefits on a life insurance policy Susan Staropoli took out for her then-husband. The two later divorced, and Mr. Staropoli passed away a few years later. The policy’s plain terms do not allow ex-spouses to receive insurance coverage. As such, we will affirm the District Court’s rejection of Ms. Staropoli’s many claims for relief.
The case may be found here: https://www2.ca3.uscourts.gov/opinarch/212500np.pdf
In Staropoli v. Metropolitan Life Insurance Co; JP Morgan Chase Bank NA, No. 21-2500 (3d Cir. 2/7/2023), the Third Circuit Court of Appeals says the following:
This case arises out of Defendants’ failure to pay benefits on a life insurance policy Susan Staropoli took out for her then-husband. The two later divorced, and Mr. Staropoli passed away a few years later. The policy’s plain terms do not allow ex-spouses to receive insurance coverage. As such, we will affirm the District Court’s rejection of Ms. Staropoli’s many claims for relief.
The case may be found here: https://www2.ca3.uscourts.gov/opinarch/212500np.pdf
Health Care-HHS Releases Initial Guidance for Medicare Prescription Drug Inflation Rebate Program (Posted 2/24/2023)
The Guidance begins as follows:
Under President Biden’s prescription drug law, drug companies will pay rebates to the federal government for raising prescription drug prices faster than the rate of inflation
As part of President Biden’s historic Inflation Reduction Act, the nation’s new prescription drug law, for the first time ever, drug companies will pay rebates to Medicare when their prescription drug prices increase faster than the rate of inflation for certain drugs dispensed to people with Medicare.
The U.S. Department of Health and Human Services (HHS) announced next steps outlining how the Department will implement the new Medicare Prescription Drug Inflation Rebate Program, which will lower drug costs for millions of Americans. Today, the Centers for Medicare & Medicaid Services (CMS) released the initial guidance detailing the requirements and procedures for the new program.
See the Guidance for the remainder of the discussion. It may be found at: https://www.hhs.gov/about/news/2023/02/09/hhs-releases-initial-guidance-for-medicare-prescription-drug-inflation-rebate-program.html
The Guidance begins as follows:
Under President Biden’s prescription drug law, drug companies will pay rebates to the federal government for raising prescription drug prices faster than the rate of inflation
As part of President Biden’s historic Inflation Reduction Act, the nation’s new prescription drug law, for the first time ever, drug companies will pay rebates to Medicare when their prescription drug prices increase faster than the rate of inflation for certain drugs dispensed to people with Medicare.
The U.S. Department of Health and Human Services (HHS) announced next steps outlining how the Department will implement the new Medicare Prescription Drug Inflation Rebate Program, which will lower drug costs for millions of Americans. Today, the Centers for Medicare & Medicaid Services (CMS) released the initial guidance detailing the requirements and procedures for the new program.
See the Guidance for the remainder of the discussion. It may be found at: https://www.hhs.gov/about/news/2023/02/09/hhs-releases-initial-guidance-for-medicare-prescription-drug-inflation-rebate-program.html
Health Care-HHS Issues Fact Sheet On COVID-19 Public Health Emergency Transition Roadmap (Posted 2/23/2023)
The Fact Sheet begins as follows:
Based on current COVID-19 trends, the Department of Health and Human Services (HHS) is planning for the federal Public Health Emergency (PHE) for COVID-19, declared under Section 319 of the Public Health Service (PHS) Act, to expire at the end of the day on May 11, 2023. Our response to the spread of SARS-CoV-2, the virus that causes COVID-19, remains a public health priority, but thanks to the Administration’s whole of government approach to combatting the virus, we are in a better place in our response than we were three years ago, and we can transition away from the emergency phase.
Over the last two years, the Biden Administration has effectively implemented the largest adult vaccination program in U.S. history, with nearly 270 million Americans receiving at least one shot of a COVID-19 vaccine.
As a result of this and other efforts, since the peak of the Omicron surge at the end of January 2022:
See the Fact Sheet for the remainder of the discussion. It may be found at: https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html
The Fact Sheet begins as follows:
Based on current COVID-19 trends, the Department of Health and Human Services (HHS) is planning for the federal Public Health Emergency (PHE) for COVID-19, declared under Section 319 of the Public Health Service (PHS) Act, to expire at the end of the day on May 11, 2023. Our response to the spread of SARS-CoV-2, the virus that causes COVID-19, remains a public health priority, but thanks to the Administration’s whole of government approach to combatting the virus, we are in a better place in our response than we were three years ago, and we can transition away from the emergency phase.
Over the last two years, the Biden Administration has effectively implemented the largest adult vaccination program in U.S. history, with nearly 270 million Americans receiving at least one shot of a COVID-19 vaccine.
As a result of this and other efforts, since the peak of the Omicron surge at the end of January 2022:
- Daily COVID-19 reported cases are down 92%,
- COVID-19 deaths have declined by over 80%, and
- New COVID-19 hospitalizations are down nearly 80%.
See the Fact Sheet for the remainder of the discussion. It may be found at: https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html
ERISA-Tenth Circuit Affirms District Court Ruling That Arbitration Is Not Available In Suit For Breach Of ERISA Duty (Posted 2/21/2023)
In Harrison v. Envision Management Holding, Inc. Board, et al., No. 22-1098 (10th Cir. 2/9/2023), the Tenth Circuit Court of Appeals says the following:
Plaintiff Robert Harrison, a participant in a defined contribution retirement plan established by his former employer, filed suit under the Employee Retirement Income Security Act (ERISA) against the fiduciaries of the plan alleging that they breached their duties towards, and caused damages to, the plan. Harrison’s complaint sought various forms of relief, including a declaration that Defendants breached their fiduciary duties, the removal of the current plan trustee, the appointment of a new fiduciary to manage the plan, an order directing the current trustee to restore all losses to the plan that resulted from the fiduciary breaches, and an order directing Defendants to disgorge the profits they obtained from their fiduciary breaches.
In response, Defendants moved to compel arbitration, citing a provision of the plan document. The district court denied that motion, concluding that enforcing the arbitration provision of the plan would prevent Harrison from effectively vindicating the statutory remedies sought in his complaint. Defendants now appeal from that ruling. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court’s decision.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca10/22-1098/22-1098-2023-02-09.pdf?ts=1675958530
In Harrison v. Envision Management Holding, Inc. Board, et al., No. 22-1098 (10th Cir. 2/9/2023), the Tenth Circuit Court of Appeals says the following:
Plaintiff Robert Harrison, a participant in a defined contribution retirement plan established by his former employer, filed suit under the Employee Retirement Income Security Act (ERISA) against the fiduciaries of the plan alleging that they breached their duties towards, and caused damages to, the plan. Harrison’s complaint sought various forms of relief, including a declaration that Defendants breached their fiduciary duties, the removal of the current plan trustee, the appointment of a new fiduciary to manage the plan, an order directing the current trustee to restore all losses to the plan that resulted from the fiduciary breaches, and an order directing Defendants to disgorge the profits they obtained from their fiduciary breaches.
In response, Defendants moved to compel arbitration, citing a provision of the plan document. The district court denied that motion, concluding that enforcing the arbitration provision of the plan would prevent Harrison from effectively vindicating the statutory remedies sought in his complaint. Defendants now appeal from that ruling. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court’s decision.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca10/22-1098/22-1098-2023-02-09.pdf?ts=1675958530
Employee Benefits-OCR Issues Bulletin On Use Of Online Tracking Technologies By HIPAA Covered Entities And Business Associates (Posted 2/20/2023)
The Bulletin begins as follows:
The Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) is issuing this Bulletin to highlight the obligations of Health Insurance Portability and Accountability Act of 1996 (HIPAA) covered entities1 and business associates2 (“regulated entities”) under the HIPAA Privacy, Security, and Breach Notification Rules (“HIPAA Rules”) when using online tracking technologies (“tracking technologies”).3 OCR administers and enforces the HIPAA Rules, including by investigating breach reports and complaints about regulated entities’ noncompliance with the HIPAA Rules. A regulated entity’s failure to comply with the HIPAA Rules may result in a civil money penalty.4
Tracking technologies are used to collect and analyze information about how users interact with regulated entities’ websites or mobile applications (“apps”). For example, a regulated entity may engage a technology vendor to perform such analysis as part of the regulated entity’s health care operations.5 The HIPAA Rules apply when the information that regulated entities collect through tracking technologies or disclose to tracking technology vendors includes protected health information (PHI).6 Some regulated entities may share sensitive information with online tracking technology vendors and such sharing may be unauthorized disclosures of PHI with such vendors.7Regulated entities are not permitted to use tracking technologies in a manner that would result in impermissible disclosures8 of PHI to tracking technology vendors or any other violations of the HIPAA Rules. For example, disclosures of PHI to tracking technology vendors for marketing purposes, without individuals’ HIPAA-compliant authorizations, would constitute impermissible disclosures.9
An impermissible disclosure of an individual’s PHI not only violates the Privacy Rule10 but also may result in a wide range of additional harms to the individual or others. For example, an impermissible disclosure of PHI may result in identity theft, financial loss, discrimination, stigma, mental anguish, or other serious negative consequences to the reputation, health, or physical safety of the individual or to others identified in the individual’s PHI. Such disclosures can reveal incredibly sensitive information about an individual, including diagnoses, frequency of visits to a therapist or other health care professionals, and where an individual seeks medical treatment. While it has always been true that regulated entities may not impermissibly disclose PHI to tracking technology vendors, because of the proliferation of tracking technologies collecting sensitive information, now more than ever, it is critical for regulated entities to ensure that they disclose PHI only as expressly permitted or required by the HIPAA Privacy Rule.
This Bulletin provides a general overview of how the HIPAA Rules apply to regulated entities’ use of tracking technologies. This Bulletin addresses:
See the Bulletin for the footnotes and further discussion. It may be found at: https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/hipaa-online-tracking/index.html
A related News Release may be found at: https://www.hhs.gov/about/news/2022/12/01/hhs-office-for-civil-rights-issues-bulletin-on-requirements-under-hipaa-for-online-tracking-technologies.html
The Bulletin begins as follows:
The Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) is issuing this Bulletin to highlight the obligations of Health Insurance Portability and Accountability Act of 1996 (HIPAA) covered entities1 and business associates2 (“regulated entities”) under the HIPAA Privacy, Security, and Breach Notification Rules (“HIPAA Rules”) when using online tracking technologies (“tracking technologies”).3 OCR administers and enforces the HIPAA Rules, including by investigating breach reports and complaints about regulated entities’ noncompliance with the HIPAA Rules. A regulated entity’s failure to comply with the HIPAA Rules may result in a civil money penalty.4
Tracking technologies are used to collect and analyze information about how users interact with regulated entities’ websites or mobile applications (“apps”). For example, a regulated entity may engage a technology vendor to perform such analysis as part of the regulated entity’s health care operations.5 The HIPAA Rules apply when the information that regulated entities collect through tracking technologies or disclose to tracking technology vendors includes protected health information (PHI).6 Some regulated entities may share sensitive information with online tracking technology vendors and such sharing may be unauthorized disclosures of PHI with such vendors.7Regulated entities are not permitted to use tracking technologies in a manner that would result in impermissible disclosures8 of PHI to tracking technology vendors or any other violations of the HIPAA Rules. For example, disclosures of PHI to tracking technology vendors for marketing purposes, without individuals’ HIPAA-compliant authorizations, would constitute impermissible disclosures.9
An impermissible disclosure of an individual’s PHI not only violates the Privacy Rule10 but also may result in a wide range of additional harms to the individual or others. For example, an impermissible disclosure of PHI may result in identity theft, financial loss, discrimination, stigma, mental anguish, or other serious negative consequences to the reputation, health, or physical safety of the individual or to others identified in the individual’s PHI. Such disclosures can reveal incredibly sensitive information about an individual, including diagnoses, frequency of visits to a therapist or other health care professionals, and where an individual seeks medical treatment. While it has always been true that regulated entities may not impermissibly disclose PHI to tracking technology vendors, because of the proliferation of tracking technologies collecting sensitive information, now more than ever, it is critical for regulated entities to ensure that they disclose PHI only as expressly permitted or required by the HIPAA Privacy Rule.
This Bulletin provides a general overview of how the HIPAA Rules apply to regulated entities’ use of tracking technologies. This Bulletin addresses:
- What is a tracking technology?
- How do the HIPAA Rules apply to regulated entities’ use of tracking technologies?
See the Bulletin for the footnotes and further discussion. It may be found at: https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/hipaa-online-tracking/index.html
A related News Release may be found at: https://www.hhs.gov/about/news/2022/12/01/hhs-office-for-civil-rights-issues-bulletin-on-requirements-under-hipaa-for-online-tracking-technologies.html
Employee Benefits-District Court Considers Validity Of A Final Rule Issued Under The No Surprises Act And Pertaining To The Arbitration Process For Resolving Certain Pay Disputes (Posted 2/17/2023)
In Tex Med Ass'n v. HHS, No. 22-372 (E.D. Tex. Feb. 6, 2023), the District Court says the following in a Memorandum Opinion:
In these consolidated cases, Plaintiff providers challenge portions of a final rule (the “Final Rule”) issued by the Defendant Departments under the No Surprises Act (the “Act”). The Final Rule governs the arbitration process for resolving payment disputes between certain out-of-network providers and group health plans and health insurance issuers.
In two prior cases, the Court addressed the Act and reviewed an interim final rule issued by the Departments governing the arbitration process. The Court first held that the Act unambiguously requires arbitrators to consider several factors when selecting the proper payment amount—and does not instruct arbitrators to weigh any one factor or circumstance more heavily than the others. The Court then concluded that the interim rule conflicted with the Act because it improperly restricted arbitrators’ discretion and directed them to consider one factor—the qualifying payment amount, or “QPA”—as more important than the others. Indeed, when drafting the interim rule, the Departments had publicly expressed concern that arbitrators would select higher payment amounts favored by providers, resulting in higher healthcare costs. The interim rule therefore imposed a “rebuttable presumption” that the offer closest to the QPA should be chosen. This, the Departments explained, would “have a downward impact on health care costs” by lowering payment amounts to providers.
Providers challenged the interim rule, and the Court vacated certain provisions, including the rebuttable presumption in favor of the QPA, after determining that the provisions conflicted with the Act. The Departments went back to the drawing board. In August 2022, they issued the Final Rule at issue here, replacing the provisions vacated in the prior cases with new requirements for arbitrators when considering the statutory factors. Plaintiffs now challenge these requirements and argue that they unlawfully conflict with the Act in the same manner as the vacated provisions in the interim rule—they improperly restrict arbitrators’ discretion and unlawfully tilt the arbitration process in favor of the QPA. The Court agrees. Accordingly, for the reasons discussed below, the Court concludes that the challenged portions of the Final Rule are unlawful and must be set aside under the Administrative Procedure Act (“APA”). The Court GRANTS Plaintiffs’ motions for summary judgment (Docket Nos. 41, 42) and DENIES the Departments’ crossmotions for summary judgment (Docket Nos. 63, 96).
The case may be found at: https://benefitslink.com/src/ctop/texas-medical-assn-v-hhs-edtex-02062023.pdf
In Tex Med Ass'n v. HHS, No. 22-372 (E.D. Tex. Feb. 6, 2023), the District Court says the following in a Memorandum Opinion:
In these consolidated cases, Plaintiff providers challenge portions of a final rule (the “Final Rule”) issued by the Defendant Departments under the No Surprises Act (the “Act”). The Final Rule governs the arbitration process for resolving payment disputes between certain out-of-network providers and group health plans and health insurance issuers.
In two prior cases, the Court addressed the Act and reviewed an interim final rule issued by the Departments governing the arbitration process. The Court first held that the Act unambiguously requires arbitrators to consider several factors when selecting the proper payment amount—and does not instruct arbitrators to weigh any one factor or circumstance more heavily than the others. The Court then concluded that the interim rule conflicted with the Act because it improperly restricted arbitrators’ discretion and directed them to consider one factor—the qualifying payment amount, or “QPA”—as more important than the others. Indeed, when drafting the interim rule, the Departments had publicly expressed concern that arbitrators would select higher payment amounts favored by providers, resulting in higher healthcare costs. The interim rule therefore imposed a “rebuttable presumption” that the offer closest to the QPA should be chosen. This, the Departments explained, would “have a downward impact on health care costs” by lowering payment amounts to providers.
Providers challenged the interim rule, and the Court vacated certain provisions, including the rebuttable presumption in favor of the QPA, after determining that the provisions conflicted with the Act. The Departments went back to the drawing board. In August 2022, they issued the Final Rule at issue here, replacing the provisions vacated in the prior cases with new requirements for arbitrators when considering the statutory factors. Plaintiffs now challenge these requirements and argue that they unlawfully conflict with the Act in the same manner as the vacated provisions in the interim rule—they improperly restrict arbitrators’ discretion and unlawfully tilt the arbitration process in favor of the QPA. The Court agrees. Accordingly, for the reasons discussed below, the Court concludes that the challenged portions of the Final Rule are unlawful and must be set aside under the Administrative Procedure Act (“APA”). The Court GRANTS Plaintiffs’ motions for summary judgment (Docket Nos. 41, 42) and DENIES the Departments’ crossmotions for summary judgment (Docket Nos. 63, 96).
The case may be found at: https://benefitslink.com/src/ctop/texas-medical-assn-v-hhs-edtex-02062023.pdf
Employee Benefits-Ninth Circuit Considers A Claim For Pilots Taking Short-Term Military Leaves Of Absence Of Up To Thirty Days (Posted 2/16/2023)
The case of Clarkson v. Alaska Airlines, Inc., No. 21-35473 (9th Cir. Feb. 1, 2023) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s grant of summary judgment in favor of defendants Alaska Airlines, Inc., and Horizon Air Industries, Inc., and remanded, in a class action brought under the Uniformed Services Employment and Reemployment Rights Act (USERRA) by Casey Clarkson, a commercial airline pilot and military reservist. Clarkson alleged that because the airlines provided paid leave for non-military leaves, including jury duty, bereavement, and sick leave, the airlines were also required to pay pilots during short-term military leaves of thirty days or less.
Under USERRA § 4316(b)(1), “a person who is absent from a position of employment by reason of service in the uniformed services” shall be “deemed to be on furlough or leave of absence” and shall be “entitled to such other rights and benefits not determined by seniority as are generally provided by the employer” to other employees on nonmilitary furloughs or leaves of absence. Under 20 C.F.R. § 1002.150, the “non-seniority rights and benefits to which an employee is entitled during a period of service are those that the employer provides to similarly situated employees.” If the benefits vary according to the type of leave, the employee must be given “the most favorable treatment accorded to any comparable form of leave when he or she performs service in the uniformed services.” To determine whether types of leave are comparable, the duration of the leave must be considered, as well as the purpose of the leave and the ability of the employee to choose when to take the leave.
The Panel held that the district court erred in concluding that no reasonable jury could find military leave comparable to non-military leave. In reaching this conclusion, the district court erred by comparing all military leaves, rather than just the short-term military leaves at issue here, with the comparator non-military leaves. The district court also erred by disregarding factual disputes about each of the three factors in the comparability analysis: duration, purpose, and control. The Panel held that because factual disputes existed, comparability was an issue for the jury. The Panel therefore reversed and remanded. It instructed that on remand, the district court should consider in the first instance the issue whether “pay during leave” was a standalone benefit that the airlines provided under their collective bargaining agreements to any employee on leave.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/02/01/21-35473.pdf
The case of Clarkson v. Alaska Airlines, Inc., No. 21-35473 (9th Cir. Feb. 1, 2023) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s grant of summary judgment in favor of defendants Alaska Airlines, Inc., and Horizon Air Industries, Inc., and remanded, in a class action brought under the Uniformed Services Employment and Reemployment Rights Act (USERRA) by Casey Clarkson, a commercial airline pilot and military reservist. Clarkson alleged that because the airlines provided paid leave for non-military leaves, including jury duty, bereavement, and sick leave, the airlines were also required to pay pilots during short-term military leaves of thirty days or less.
Under USERRA § 4316(b)(1), “a person who is absent from a position of employment by reason of service in the uniformed services” shall be “deemed to be on furlough or leave of absence” and shall be “entitled to such other rights and benefits not determined by seniority as are generally provided by the employer” to other employees on nonmilitary furloughs or leaves of absence. Under 20 C.F.R. § 1002.150, the “non-seniority rights and benefits to which an employee is entitled during a period of service are those that the employer provides to similarly situated employees.” If the benefits vary according to the type of leave, the employee must be given “the most favorable treatment accorded to any comparable form of leave when he or she performs service in the uniformed services.” To determine whether types of leave are comparable, the duration of the leave must be considered, as well as the purpose of the leave and the ability of the employee to choose when to take the leave.
The Panel held that the district court erred in concluding that no reasonable jury could find military leave comparable to non-military leave. In reaching this conclusion, the district court erred by comparing all military leaves, rather than just the short-term military leaves at issue here, with the comparator non-military leaves. The district court also erred by disregarding factual disputes about each of the three factors in the comparability analysis: duration, purpose, and control. The Panel held that because factual disputes existed, comparability was an issue for the jury. The Panel therefore reversed and remanded. It instructed that on remand, the district court should consider in the first instance the issue whether “pay during leave” was a standalone benefit that the airlines provided under their collective bargaining agreements to any employee on leave.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/02/01/21-35473.pdf
Employee Benefits-IRS Issues Third Six-Year Remedial Amendment Cycle for Pre-approved Defined Benefit Plans: Issuance of Opinion Letters, Plan Adoption Deadline, and Opening of Determination Letter Program (Posted 2/14/2023)
The IRS has issued Announcement 2023-6. The Announcement begins as follows:
The Internal Revenue Service (IRS) intends to issue opinion letters for pre-approved defined benefit plans that were updated for changes in plan qualification requirements listed in Notice 2020-14, 2020-13 I.R.B. 555 (the 2020 Cumulative List) and that were filed with the IRS during the third six-year remedial amendment cycle under the remedial amendment cycle system for pre-approved plans established under Rev. Proc. 2016-37, 2016-29 I.R.B. 136 (newly approved plans). The IRS expects to issue the letters on February 28, 2023, or, in some cases, as soon as possible thereafter. An employer intending to maintain a pre-approved plan for the third six-year remedial amendment cycle for defined benefit plans must adopt a newly approved plan on or before March 31, 2025. During the period beginning April 1, 2023, and ending March 31, 2025, the IRS will accept an application for an individual determination letter from an adopting employer eligible to submit a determination letter request under the third six-year remedial amendment cycle for defined benefit pre-approved plans.
See the Announcement for more details. It may be found at: irs.gov/pub/irs-drop/a-23-06.pdf
The IRS has issued Announcement 2023-6. The Announcement begins as follows:
The Internal Revenue Service (IRS) intends to issue opinion letters for pre-approved defined benefit plans that were updated for changes in plan qualification requirements listed in Notice 2020-14, 2020-13 I.R.B. 555 (the 2020 Cumulative List) and that were filed with the IRS during the third six-year remedial amendment cycle under the remedial amendment cycle system for pre-approved plans established under Rev. Proc. 2016-37, 2016-29 I.R.B. 136 (newly approved plans). The IRS expects to issue the letters on February 28, 2023, or, in some cases, as soon as possible thereafter. An employer intending to maintain a pre-approved plan for the third six-year remedial amendment cycle for defined benefit plans must adopt a newly approved plan on or before March 31, 2025. During the period beginning April 1, 2023, and ending March 31, 2025, the IRS will accept an application for an individual determination letter from an adopting employer eligible to submit a determination letter request under the third six-year remedial amendment cycle for defined benefit pre-approved plans.
See the Announcement for more details. It may be found at: irs.gov/pub/irs-drop/a-23-06.pdf
News-Whitehouse Issues Statement On Proposals To End Declarations Of National Emergency And Public Health Emergency Stemming From COVID-19 (Posted 2/13/2023)
The Statement pertains to the following proposals:
H.R. 382 – A bill to terminate the public health emergency declared with respect to COVID-19 (Rep. Guthrie, R-KY, and 19 cosponsors)
H.J. Res. 7 – A joint resolution relating to a national emergency declared by the President on March 13, 2020 (Rep. Gosar, R-AZ, and 51 cosponsors)
The Statement says the following:
The COVID-19 national emergency and public health emergency (PHE) were declared by the Trump Administration in 2020. They are currently set to expire on March 1 and April 11, respectively. At present, the Administration’s plan is to extend the emergency declarations to May 11, and then end both emergencies on that date. This wind-down would align with the Administration’s previous commitments to give at least 60 days’ notice prior to termination of the PHE.
To be clear, continuation of these emergency declarations until May 11 does not impose any restriction at all on individual conduct with regard to COVID-19. They do not impose mask mandates or vaccine mandates. They do not restrict school or business operations. They do not require the use of any medicines or tests in response to cases of COVID-19. However, ending these emergency declarations in the manner contemplated by H.R. 382 and H.J. Res. 7 would have two highly significant impacts on our nation’s health system and government operations. First, an abrupt end to the emergency declarations would create wide-ranging chaos and uncertainty throughout the health care system — for states, for hospitals and doctors’ offices, and, most importantly, for tens of millions of Americans. During the PHE, the Medicaid program has operated under special rules to provide extra funding to states to ensure that tens of millions of vulnerable Americans kept their Medicaid coverage during a global pandemic. In December, Congress enacted an orderly wind-down of these rules to ensure that patients did not lose access to care unpredictably and that state budgets don’t face a radical cliff. If the PHE were suddenly terminated, it would sow confusion and chaos into this critical wind-down.
Due to this uncertainty, tens of millions of Americans could be at risk of abruptly losing their health insurance, and states could be at risk of losing billions of dollars in funding. Additionally, hospitals and nursing homes that have relied on flexibilities enabled by the emergency declarations will be plunged into chaos without adequate time to retrain staff and establish new billing processes, likely leading to disruptions in care and payment delays, and many facilities around the country will experience revenue losses. Finally, millions of patients, including many of our nation’s veterans, who rely on telehealth would suddenly be unable to access critical clinical services and medications. The most acutely impacted would be individuals with behavioral health needs and rural patients. Second, the end of the public health emergency will end the Title 42 policy at the border. While the Administration has attempted to terminate the Title 42 policy and continues to support an orderly lifting of those restrictions, Title 42 remains in place because of orders issued by the Supreme Court and a district court in Louisiana. Enactment of H.R. 382 would lift Title 42 immediately, and result in a substantial additional inflow of migrants at the Southwest border. The number of migrants crossing the border has been cut in half, approximately, since the Administration put in place a plan in early January to deter irregular migration from Venezuela, Cuba, Nicaragua, and Haiti. The Administration supports an orderly, predictable wind-down of Title 42, with sufficient time to put alternative policies in place. But if H.R. 382 becomes law and the Title 42 restrictions end precipitously, Congress will effectively be requiring the Administration to allow thousands of migrants per day into the country immediately without the necessary policies in place.
The Administration strongly opposes enactment of H.R. 382 and H.J. Res. 7, which would be a grave disservice to the American people.
The Statement may be found at: https://www.whitehouse.gov/wp-content/uploads/2023/01/SAP-H.R.-382-H.J.-Res.-7.pdf
The Statement pertains to the following proposals:
H.R. 382 – A bill to terminate the public health emergency declared with respect to COVID-19 (Rep. Guthrie, R-KY, and 19 cosponsors)
H.J. Res. 7 – A joint resolution relating to a national emergency declared by the President on March 13, 2020 (Rep. Gosar, R-AZ, and 51 cosponsors)
The Statement says the following:
The COVID-19 national emergency and public health emergency (PHE) were declared by the Trump Administration in 2020. They are currently set to expire on March 1 and April 11, respectively. At present, the Administration’s plan is to extend the emergency declarations to May 11, and then end both emergencies on that date. This wind-down would align with the Administration’s previous commitments to give at least 60 days’ notice prior to termination of the PHE.
To be clear, continuation of these emergency declarations until May 11 does not impose any restriction at all on individual conduct with regard to COVID-19. They do not impose mask mandates or vaccine mandates. They do not restrict school or business operations. They do not require the use of any medicines or tests in response to cases of COVID-19. However, ending these emergency declarations in the manner contemplated by H.R. 382 and H.J. Res. 7 would have two highly significant impacts on our nation’s health system and government operations. First, an abrupt end to the emergency declarations would create wide-ranging chaos and uncertainty throughout the health care system — for states, for hospitals and doctors’ offices, and, most importantly, for tens of millions of Americans. During the PHE, the Medicaid program has operated under special rules to provide extra funding to states to ensure that tens of millions of vulnerable Americans kept their Medicaid coverage during a global pandemic. In December, Congress enacted an orderly wind-down of these rules to ensure that patients did not lose access to care unpredictably and that state budgets don’t face a radical cliff. If the PHE were suddenly terminated, it would sow confusion and chaos into this critical wind-down.
Due to this uncertainty, tens of millions of Americans could be at risk of abruptly losing their health insurance, and states could be at risk of losing billions of dollars in funding. Additionally, hospitals and nursing homes that have relied on flexibilities enabled by the emergency declarations will be plunged into chaos without adequate time to retrain staff and establish new billing processes, likely leading to disruptions in care and payment delays, and many facilities around the country will experience revenue losses. Finally, millions of patients, including many of our nation’s veterans, who rely on telehealth would suddenly be unable to access critical clinical services and medications. The most acutely impacted would be individuals with behavioral health needs and rural patients. Second, the end of the public health emergency will end the Title 42 policy at the border. While the Administration has attempted to terminate the Title 42 policy and continues to support an orderly lifting of those restrictions, Title 42 remains in place because of orders issued by the Supreme Court and a district court in Louisiana. Enactment of H.R. 382 would lift Title 42 immediately, and result in a substantial additional inflow of migrants at the Southwest border. The number of migrants crossing the border has been cut in half, approximately, since the Administration put in place a plan in early January to deter irregular migration from Venezuela, Cuba, Nicaragua, and Haiti. The Administration supports an orderly, predictable wind-down of Title 42, with sufficient time to put alternative policies in place. But if H.R. 382 becomes law and the Title 42 restrictions end precipitously, Congress will effectively be requiring the Administration to allow thousands of migrants per day into the country immediately without the necessary policies in place.
The Administration strongly opposes enactment of H.R. 382 and H.J. Res. 7, which would be a grave disservice to the American people.
The Statement may be found at: https://www.whitehouse.gov/wp-content/uploads/2023/01/SAP-H.R.-382-H.J.-Res.-7.pdf
Employee Benefits-IRS Issues Updated Operational Compliance List (Posted 2/10/2023)
The IRS says the following about the list:
Updated February 2023: The Operational Compliance List ("OC List”) is provided pursuant to Revenue Procedure 2022-40, Section 8, to help plan sponsors and practitioners achieve operational compliance by identifying changes in qualification requirements and Internal Revenue Code (IRC) Section 403(b) requirements effective during a calendar year. The OC List:
The OC list doesn't include annual, monthly, or other periodic changes that routinely occur (such as, cost-of-living increases, spot segment rates, and applicable mortality tables). You can find these items on the Employee Plans Recent Published Guidance webpage.
The IRS updates the OC List periodically to reflect new legislation and IRS guidance, and in 2020, began indicating the month that new items were added. Also, in 2020, the IRS stopped updating listings for prior years except to the extent new legislation or IRS guidance is retroactively effective. The OC List is not intended to be a comprehensive list of every item of IRS guidance or new legislation for a year that could affect a particular plan (and, because the OC List is updated periodically, items may not appear on it before they are effective). For a complete list of IRS guidance, see Recent Published Guidance.
Note: In order to meet the qualification requirements or the IRC Section 403(b) requirements, a plan must comply operationally with each relevant requirement, even if the requirement is not included on the OC List. A plan must be operated in compliance with a change in requirements from the effective date of the change.
See the updated List for more information. It may be found at: https://www.irs.gov/retirement-plans/operational-compliance-list
The IRS says the following about the list:
Updated February 2023: The Operational Compliance List ("OC List”) is provided pursuant to Revenue Procedure 2022-40, Section 8, to help plan sponsors and practitioners achieve operational compliance by identifying changes in qualification requirements and Internal Revenue Code (IRC) Section 403(b) requirements effective during a calendar year. The OC List:
- Identifies matters that may involve either mandatory or discretionary plan amendments depending on the particular plan.
- May reference other significant guidance that affects daily plan operations.
- Is available on this webpage only; it will not be published in the Internal Revenue Bulletin.
The OC list doesn't include annual, monthly, or other periodic changes that routinely occur (such as, cost-of-living increases, spot segment rates, and applicable mortality tables). You can find these items on the Employee Plans Recent Published Guidance webpage.
The IRS updates the OC List periodically to reflect new legislation and IRS guidance, and in 2020, began indicating the month that new items were added. Also, in 2020, the IRS stopped updating listings for prior years except to the extent new legislation or IRS guidance is retroactively effective. The OC List is not intended to be a comprehensive list of every item of IRS guidance or new legislation for a year that could affect a particular plan (and, because the OC List is updated periodically, items may not appear on it before they are effective). For a complete list of IRS guidance, see Recent Published Guidance.
Note: In order to meet the qualification requirements or the IRC Section 403(b) requirements, a plan must comply operationally with each relevant requirement, even if the requirement is not included on the OC List. A plan must be operated in compliance with a change in requirements from the effective date of the change.
See the updated List for more information. It may be found at: https://www.irs.gov/retirement-plans/operational-compliance-list
Employee Benefits-CMS Issues Proposed Regulations On Coverage Of Certain Preventive Services Under The Affordable Care Act (2/9/2023)
A Fact Sheet form the CMS begins as follows:
On January 30, 2023, the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively, the Departments) released proposed rules with comment period entitled “Coverage of Certain Preventive Services Under the Affordable Care Act.” These proposed rules would amend regulations regarding coverage of certain preventive services under the Affordable Care Act (ACA), which, consistent with guidelines supported by the Health Resources and Services Administration (HRSA), generally require non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage to cover certain contraceptive services without cost sharing. Current regulations include exemptions for group health plans, institutions of higher education arranging student health insurance coverage, health insurance issuers, and individuals with religious or moral objections from providing (or in the case of individuals, purchasing or enrolling in) coverage of contraceptive services. The current regulations also provide an optional accommodation for such group health plans and sponsors of student health insurance coverage that allows objecting employers and colleges and universities to remove themselves from providing birth control coverage while ensuring women and covered dependents enrolled in their plans can access contraceptive services at no additional charge.
The proposed rules would leave in place the existing religious exemption for entities and individuals with objections, as well as the optional accommodation for contraception, while also establishing a new pathway—referred to as an individual contraceptive arrangement—that individuals enrolled in plans or coverage sponsored, arranged, or provided by objecting entities that are not eligible for or have not opted for the existing accommodation may use to obtain contraceptive services at no cost directly from a willing provider or facility that furnishes contraceptive services. The individual contraceptive arrangement would not require any involvement on the part of an objecting entity. Under the HHS proposed rules, a provider or facility that furnishes contraceptive services in accordance with the individual contraceptive arrangement for eligible individuals would be able to be reimbursed for its costs by entering into an arrangement with an issuer on a Federally-facilitated Exchange (FFE) or State-based Exchange on the Federal platform (SBE-FP), which in turn would seek an Exchange user fee adjustment. These proposed rules also would rescind the moral exemption rule.
See the remainder of the Fact Sheet for more on the matter. It may be found at: https://www.cms.gov/newsroom/fact-sheets/coverage-certain-preventive-services-under-affordable-care-act-proposed-rules
The proposed regulations may be found at: https://www.federalregister.gov/public-inspection/2023-01981/coverage-of-certain-preventive-services-under-the-affordable-care-act
See a related News Release at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-proposes-new-rules-expand-access-birth-control-coverage-under-affordable
A Fact Sheet form the CMS begins as follows:
On January 30, 2023, the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively, the Departments) released proposed rules with comment period entitled “Coverage of Certain Preventive Services Under the Affordable Care Act.” These proposed rules would amend regulations regarding coverage of certain preventive services under the Affordable Care Act (ACA), which, consistent with guidelines supported by the Health Resources and Services Administration (HRSA), generally require non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage to cover certain contraceptive services without cost sharing. Current regulations include exemptions for group health plans, institutions of higher education arranging student health insurance coverage, health insurance issuers, and individuals with religious or moral objections from providing (or in the case of individuals, purchasing or enrolling in) coverage of contraceptive services. The current regulations also provide an optional accommodation for such group health plans and sponsors of student health insurance coverage that allows objecting employers and colleges and universities to remove themselves from providing birth control coverage while ensuring women and covered dependents enrolled in their plans can access contraceptive services at no additional charge.
The proposed rules would leave in place the existing religious exemption for entities and individuals with objections, as well as the optional accommodation for contraception, while also establishing a new pathway—referred to as an individual contraceptive arrangement—that individuals enrolled in plans or coverage sponsored, arranged, or provided by objecting entities that are not eligible for or have not opted for the existing accommodation may use to obtain contraceptive services at no cost directly from a willing provider or facility that furnishes contraceptive services. The individual contraceptive arrangement would not require any involvement on the part of an objecting entity. Under the HHS proposed rules, a provider or facility that furnishes contraceptive services in accordance with the individual contraceptive arrangement for eligible individuals would be able to be reimbursed for its costs by entering into an arrangement with an issuer on a Federally-facilitated Exchange (FFE) or State-based Exchange on the Federal platform (SBE-FP), which in turn would seek an Exchange user fee adjustment. These proposed rules also would rescind the moral exemption rule.
See the remainder of the Fact Sheet for more on the matter. It may be found at: https://www.cms.gov/newsroom/fact-sheets/coverage-certain-preventive-services-under-affordable-care-act-proposed-rules
The proposed regulations may be found at: https://www.federalregister.gov/public-inspection/2023-01981/coverage-of-certain-preventive-services-under-the-affordable-care-act
See a related News Release at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-proposes-new-rules-expand-access-birth-control-coverage-under-affordable
ERISA-DOL Fact Sheet: EBSA Restores Over $1.4 Billion to Employee Benefit Plans, Participants, and Beneficiaries (Posted 2/7/2023)
The Fact Sheet begins by saying the following:
Through its enforcement of the Employee Retirement Income Security Act (ERISA), the Employee Benefits Security Administration (EBSA) is responsible for ensuring the integrity of the private employee benefit plan system in the United States. EBSA oversees approximately 747,000 retirement plans, 2.5 million health plans, and 673,000 other welfare benefit plans. These plans cover 152 million workers, retirees, and dependents and the pension plans alone hold an estimated $12 trillion in assets.
In FY 2022, EBSA recovered over $1.4 billion for plans, participants, and beneficiaries.
See the Fact Sheet for additional details. It may be found here: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/ebsa-monetary-results.pdf
The Fact Sheet begins by saying the following:
Through its enforcement of the Employee Retirement Income Security Act (ERISA), the Employee Benefits Security Administration (EBSA) is responsible for ensuring the integrity of the private employee benefit plan system in the United States. EBSA oversees approximately 747,000 retirement plans, 2.5 million health plans, and 673,000 other welfare benefit plans. These plans cover 152 million workers, retirees, and dependents and the pension plans alone hold an estimated $12 trillion in assets.
In FY 2022, EBSA recovered over $1.4 billion for plans, participants, and beneficiaries.
See the Fact Sheet for additional details. It may be found here: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/ebsa-monetary-results.pdf
ERISA-District Court Finds That Plaintiff Has A Plausible ERISA Claim For Breach Of Fiduciary Duty By Denying Life Insurance Benefits (Posted 2/6/2023)
In Erban v. Tufts Medical Center Physicians Org., Inc., No. 22-11193 (D. Mass Jan. 23, 2023), the Distriact Court says the following:
Dr. John Erban worked more than thirty years at Tufts Medical Center as a physician specializing in oncology and hematology. In August 2019, Dr. Erban was diagnosed with glioblastoma, a terminal malignant tumor, which left him cognitively impaired. He passed away in September 2020. His widow, Plaintiff Lisa Erban, applied for life insurance benefits as the beneficiary, but was denied basic life and supplemental life insurance benefits. She alleges that Defendants breached their fiduciary duty in violation of the Employee Retirement Income Security Act (“ERISA”) of 1974, 29 U.S.C. § 1132(a)(3) when they denied her benefits.
Her primary arguments are that (1) Tufts failed to inform her that she could continue her husband’s life insurance benefits by continuing to pay premiums and (2) they did not completely and adequately inform her about the deadline for converting her husband’s plan. Tufts asserts she was no longer a beneficiary under the policy on the date of her husband’s death because the insurance lapsed when she and her husband failed to timely convert the group policy to an individual policy and that it did not violate any provisions in the plan.
Defendants filed a motion to dismiss under Rule 12(b)(6). After hearing, the Court DENIES the motion to dismiss on the grounds Plaintiff Lisa Erban has stated a plausible claim that Defendants breached their fiduciary duty in light of their knowledge of Dr. Erban’s impaired cognitive ability and that Nicolas Martin, an employee and Human Resources Director, acted as a fiduciary.
The case may be found here: https://benefitslink.com/src/ctop/erban-v-tufts-dmass-01232023.pdf
In Erban v. Tufts Medical Center Physicians Org., Inc., No. 22-11193 (D. Mass Jan. 23, 2023), the Distriact Court says the following:
Dr. John Erban worked more than thirty years at Tufts Medical Center as a physician specializing in oncology and hematology. In August 2019, Dr. Erban was diagnosed with glioblastoma, a terminal malignant tumor, which left him cognitively impaired. He passed away in September 2020. His widow, Plaintiff Lisa Erban, applied for life insurance benefits as the beneficiary, but was denied basic life and supplemental life insurance benefits. She alleges that Defendants breached their fiduciary duty in violation of the Employee Retirement Income Security Act (“ERISA”) of 1974, 29 U.S.C. § 1132(a)(3) when they denied her benefits.
Her primary arguments are that (1) Tufts failed to inform her that she could continue her husband’s life insurance benefits by continuing to pay premiums and (2) they did not completely and adequately inform her about the deadline for converting her husband’s plan. Tufts asserts she was no longer a beneficiary under the policy on the date of her husband’s death because the insurance lapsed when she and her husband failed to timely convert the group policy to an individual policy and that it did not violate any provisions in the plan.
Defendants filed a motion to dismiss under Rule 12(b)(6). After hearing, the Court DENIES the motion to dismiss on the grounds Plaintiff Lisa Erban has stated a plausible claim that Defendants breached their fiduciary duty in light of their knowledge of Dr. Erban’s impaired cognitive ability and that Nicolas Martin, an employee and Human Resources Director, acted as a fiduciary.
The case may be found here: https://benefitslink.com/src/ctop/erban-v-tufts-dmass-01232023.pdf
Employee Benefits-IRS Issues Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans For Use In Preparing 2022 Returns (Posted 2/3/2023)
According to the IRS, here is What’s New:
Telehealth and other remote care services. Public Law 117-328, December 29, 2022, amended section 223 to provide that an HDHP may have a $0 deductible for telehealth and other remote care services for plan years beginning before 2022; months beginning after March 2022 and before 2023; and plan years beginning after 2022 and before 2025. Also, an “eligible individual” remains eligible to make contributions to its HSA even if the individual has coverage outside of the HDHP during these periods for telehealth and other remote care services.
Health FSA contribution and carryover for 2023. Revenue Procedure 2022-38, October 18, 2022, provides that for tax years beginning in 2023, the dollar limitation under section 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,050. If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $610.
Insulin products. Public Law 117-169, August 16, 2022, amended section 223 to provide that an HDHP may have a $0 deductible for selected insulin products. The amendment applies to plan years beginning after 2022. Health FSA contribution and carryover for 2022. Revenue Procedure 2021-45, November 10, 2021, provides that for tax years beginning in 2022, the dollar limitation under section 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $2,850. If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $570.
Home testing for COVID-19 and personal protective equipment for preventing spread of COVID-19. News Release IR-2021-181, September 10, 2021, reminds that the cost of home testing for COVID-19 and the costs of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs, or Archer MSAs.
Surprise billing for emergency services or air ambulance services. Public Law 116-260, December 27, 2020, amended section 223 to provide that an HDHP may provide benefits under federal and state anti-“surprise billing” laws with a $0 deductible. Also, an “eligible individual” remains eligible to make contributions to its HSA even if the individual receives anti-“surprise billing” benefits outside of the HDHP. The amendment applies to plan years beginning after 2021.
Note. Anti-“surprise billing” laws generally protect individuals from “surprise billing” for items like emergency medical services, some non-emergency medical services, and air ambulance services.
Publication 969 may be found here: https://www.irs.gov/pub/irs-prior/p969--2022.pdf
According to the IRS, here is What’s New:
Telehealth and other remote care services. Public Law 117-328, December 29, 2022, amended section 223 to provide that an HDHP may have a $0 deductible for telehealth and other remote care services for plan years beginning before 2022; months beginning after March 2022 and before 2023; and plan years beginning after 2022 and before 2025. Also, an “eligible individual” remains eligible to make contributions to its HSA even if the individual has coverage outside of the HDHP during these periods for telehealth and other remote care services.
Health FSA contribution and carryover for 2023. Revenue Procedure 2022-38, October 18, 2022, provides that for tax years beginning in 2023, the dollar limitation under section 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,050. If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $610.
Insulin products. Public Law 117-169, August 16, 2022, amended section 223 to provide that an HDHP may have a $0 deductible for selected insulin products. The amendment applies to plan years beginning after 2022. Health FSA contribution and carryover for 2022. Revenue Procedure 2021-45, November 10, 2021, provides that for tax years beginning in 2022, the dollar limitation under section 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $2,850. If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $570.
Home testing for COVID-19 and personal protective equipment for preventing spread of COVID-19. News Release IR-2021-181, September 10, 2021, reminds that the cost of home testing for COVID-19 and the costs of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs, or Archer MSAs.
Surprise billing for emergency services or air ambulance services. Public Law 116-260, December 27, 2020, amended section 223 to provide that an HDHP may provide benefits under federal and state anti-“surprise billing” laws with a $0 deductible. Also, an “eligible individual” remains eligible to make contributions to its HSA even if the individual receives anti-“surprise billing” benefits outside of the HDHP. The amendment applies to plan years beginning after 2021.
Note. Anti-“surprise billing” laws generally protect individuals from “surprise billing” for items like emergency medical services, some non-emergency medical services, and air ambulance services.
Publication 969 may be found here: https://www.irs.gov/pub/irs-prior/p969--2022.pdf
ERISA-District Court Rules That Claim Of Equitable Estoppel Fails (Posted 2/2/2023)
In Kenefsky v. Ford Motor Co. Gen.Ret. Plan, No. 22-10548 (E.D. Mich. Jan. 13, 2023), the District Court said the following:
This is an ERISA equitable estoppel case. Plaintiffs, Peter Kanefsky (“Kanefsky”) and Jennifer Kanefsky, seek to estop Defendant, Ford Motor Company General Retirement Plan (the “Plan”), from permanently reducing their monthly annuity payments and from recouping $53,411.16 in overpayments allegedly sent to them.
This case is before the Court on Ford’s Motion to Dismiss for Failure to State a Claim. Pursuant to E.D. Mich. LR 7.1 (f)(2), the Court finds this Motion has been adequately briefed and will rule without hearing. For the reasons set forth below, the Court GRANTS Defendant’s Motion. The Court finds that Plaintiffs have failed to plead sufficient facts to make a plausible claim that Ford intended Kanefsky to act based on its representations, which is a required element of an equitable estoppel claim.
The case may be found at: https://benefitslink.com/src/ctop/kanefsky-edmich-01132023.pdf
In Kenefsky v. Ford Motor Co. Gen.Ret. Plan, No. 22-10548 (E.D. Mich. Jan. 13, 2023), the District Court said the following:
This is an ERISA equitable estoppel case. Plaintiffs, Peter Kanefsky (“Kanefsky”) and Jennifer Kanefsky, seek to estop Defendant, Ford Motor Company General Retirement Plan (the “Plan”), from permanently reducing their monthly annuity payments and from recouping $53,411.16 in overpayments allegedly sent to them.
This case is before the Court on Ford’s Motion to Dismiss for Failure to State a Claim. Pursuant to E.D. Mich. LR 7.1 (f)(2), the Court finds this Motion has been adequately briefed and will rule without hearing. For the reasons set forth below, the Court GRANTS Defendant’s Motion. The Court finds that Plaintiffs have failed to plead sufficient facts to make a plausible claim that Ford intended Kanefsky to act based on its representations, which is a required element of an equitable estoppel claim.
The case may be found at: https://benefitslink.com/src/ctop/kanefsky-edmich-01132023.pdf
ERISA-Ninth Circuit Rules On Claims For Benefits Made Under ERISA (Posted 2/1/2023)
The case of David Wit, et al v./ United Behavioral Health, No. 20-17363 (9th Cir. 1/26/2023) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed in part and reversed in part the district court’s judgment finding United Behavioral Health (“UBH”) liable, and awarding declaratory and injunctive relief, to classes of plaintiffs who were beneficiaries of ERISA-governed health benefit plans for which UBH was the claims administrator.
Plaintiffs submitted health plan coverage requests, which UBH denied. Plaintiffs brought claims under ERISA for breach of fiduciary duty and improper denial of benefits, based on a theory that UBH improperly developed and relied on internal guidelines that were inconsistent with the terms of the class members’ plans and with state-mandated criteria. The parties stipulated to a sample class, from which they submitted a sample of health insurance plans. Plaintiffs alleged that the plans provided coverage for treatment consistent with generally accepted standards of case or were governed by state laws specifying certain criteria for making coverage or medical necessity determinations. Plaintiffs alleged that UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making these determinations were more restrictive than GASC and were also more restrictive than state-mandated criteria.
The district court certified three classes, conducted a bench trial, and entered judgment in plaintiffs’ favor, concluding that UBH breached its fiduciary duties and wrongfully denied benefits because UBH’s Guidelines impermissibly deviated from GASC and state-mandated criteria. The district court issued declaratory and injunctive relief, directed the implementation of court-determined claims processing guidelines, ordered “reprocessing” of all class members’ claims in accordance with the new guidelines, and appointed a special master to oversee compliance for ten years. The Panel held that plaintiffs had Article III standing to bring their claims. The Panel held that plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged fiduciary violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits.
Plaintiffs also alleged a concrete injury as to the denied of benefits claim because they alleged a harm—the arbitrary and capricious adjudication of benefits claims—that presented a material risk to their interest in fair adjudication of their entitlement to their contractual benefits. Further, plaintiffs alleged a particularized injury as to both claims because the Guidelines materially affected each plaintiff. Finally, plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct.
The Panel reversed the part of the district court’s class certification order certifying plaintiffs’ denial of benefits claims as class actions. The Panel held that plaintiffs’ “reprocessing” theory, seeking reprocessing of their benefits claims under proper guidelines, was a use of the class action procedure to expand or modify substantive rights provided by ERISA, in violation of Fed. R. Civ. P. 23 and the Rules Enabling Act, 28 U.S.C. § 2072(b).UBH did not appeal the portion of the district court’s judgment finding that the UBH Guidelines were impermissibly inconsistent with state-mandated criteria, and that portion of the district court’s decision therefore remained intact. UBH did argue on appeal that the district court erred in concluding that the Guidelines improperly deviated from GASC and that the district court did not apply an appropriate level of deference to UBH’s interpretation of the ERISA plans. The Panel concluded that the district court did not clearly err in finding that UBH had a structural conflict of interest in serving a dual role as plan administrator and insurer, and that UBH also had a financial conflict because it was incentivized to keep benefit expenses down. The Panel held, however, that these findings did not excuse the district court from reviewing UBH’s interpretation of the plans for an abuse of discretion. The Panel held that, even assuming the conflicts of interest found by the district court warranted heavy skepticism against UBH’s interpretation, UBH’s interpretation did not conflict with the plain language of the plans. Accordingly, the district court erred by substituting its interpretation of the plans for UBH’s interpretation. The Panel reversed the district court’s judgment that UBH wrongfully denied benefits to the named plaintiffs based upon the court’s finding that the Guidelines
impermissibly deviated from GASC.
The Panel held that the district court also erred in its judgment on plaintiffs’ breach of duty claim, which also relied heavily on the district court’s conclusion that the Guidelines impermissibly deviated from GASC. Finally, the Panel held that the district court erred when it excused unnamed class members from demonstrating compliance with the plans’ administrative exhaustion requirement. The panel held that when an ERISA plan does not merely provide for administrative review but, as here, explicitly mandates exhaustion of such procedures before bringing suit in federal court and, importantly, provides no exceptions, application of judicially created exhaustion exceptions would conflict with the written terms of the plan. Accordingly, to the extent that any absent class members’ plans required exhaustion, the district court erred in excusing the failure to satisfy such a contractual requirement. In sum, the Panel held that plaintiffs had Article III standing to bring their breach of fiduciary duty and improper denial of benefits claims pursuant to 29 U.S.C. §§ 112(a)(1)(B) and (a)(3). And the district court did not err in certifying three classes to pursue the fiduciary duty claim. However, because plaintiffs expressly declined to make any showing, or seek a determination of, their entitlement to benefits, permitting plaintiffs to proceed with their denial of benefits claim under the guise of a “reprocessing” remedy on a class-wide basis violated the Rules Enabling Act. Accordingly, the Panel affirmed in part and reversed in part the district court’s class certification order.
On the merits, the Panel held that the district court erred in excusing absent class members’ failure to exhaust administrative remedies as required under the plans. The district court also erred in determining that the Guidelines improperly deviated from GASC based on its interpretation that the plans mandated coverage that was coextensive with GASC. Therefore, the Panel reversed the judgment on plaintiffs’ denial of benefits claim. To the extent the judgment on plaintiffs’ breach of fiduciary duty claim was based on the district court’s erroneous interpretation of the plans, it was also reversed. The Panel affirmed in part, reversed in part, and remanded for further proceedings.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca9/20-17363/20-17363-2023-01-26-0.pdf?ts=1674756192
The case of David Wit, et al v./ United Behavioral Health, No. 20-17363 (9th Cir. 1/26/2023) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed in part and reversed in part the district court’s judgment finding United Behavioral Health (“UBH”) liable, and awarding declaratory and injunctive relief, to classes of plaintiffs who were beneficiaries of ERISA-governed health benefit plans for which UBH was the claims administrator.
Plaintiffs submitted health plan coverage requests, which UBH denied. Plaintiffs brought claims under ERISA for breach of fiduciary duty and improper denial of benefits, based on a theory that UBH improperly developed and relied on internal guidelines that were inconsistent with the terms of the class members’ plans and with state-mandated criteria. The parties stipulated to a sample class, from which they submitted a sample of health insurance plans. Plaintiffs alleged that the plans provided coverage for treatment consistent with generally accepted standards of case or were governed by state laws specifying certain criteria for making coverage or medical necessity determinations. Plaintiffs alleged that UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making these determinations were more restrictive than GASC and were also more restrictive than state-mandated criteria.
The district court certified three classes, conducted a bench trial, and entered judgment in plaintiffs’ favor, concluding that UBH breached its fiduciary duties and wrongfully denied benefits because UBH’s Guidelines impermissibly deviated from GASC and state-mandated criteria. The district court issued declaratory and injunctive relief, directed the implementation of court-determined claims processing guidelines, ordered “reprocessing” of all class members’ claims in accordance with the new guidelines, and appointed a special master to oversee compliance for ten years. The Panel held that plaintiffs had Article III standing to bring their claims. The Panel held that plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged fiduciary violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits.
Plaintiffs also alleged a concrete injury as to the denied of benefits claim because they alleged a harm—the arbitrary and capricious adjudication of benefits claims—that presented a material risk to their interest in fair adjudication of their entitlement to their contractual benefits. Further, plaintiffs alleged a particularized injury as to both claims because the Guidelines materially affected each plaintiff. Finally, plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct.
The Panel reversed the part of the district court’s class certification order certifying plaintiffs’ denial of benefits claims as class actions. The Panel held that plaintiffs’ “reprocessing” theory, seeking reprocessing of their benefits claims under proper guidelines, was a use of the class action procedure to expand or modify substantive rights provided by ERISA, in violation of Fed. R. Civ. P. 23 and the Rules Enabling Act, 28 U.S.C. § 2072(b).UBH did not appeal the portion of the district court’s judgment finding that the UBH Guidelines were impermissibly inconsistent with state-mandated criteria, and that portion of the district court’s decision therefore remained intact. UBH did argue on appeal that the district court erred in concluding that the Guidelines improperly deviated from GASC and that the district court did not apply an appropriate level of deference to UBH’s interpretation of the ERISA plans. The Panel concluded that the district court did not clearly err in finding that UBH had a structural conflict of interest in serving a dual role as plan administrator and insurer, and that UBH also had a financial conflict because it was incentivized to keep benefit expenses down. The Panel held, however, that these findings did not excuse the district court from reviewing UBH’s interpretation of the plans for an abuse of discretion. The Panel held that, even assuming the conflicts of interest found by the district court warranted heavy skepticism against UBH’s interpretation, UBH’s interpretation did not conflict with the plain language of the plans. Accordingly, the district court erred by substituting its interpretation of the plans for UBH’s interpretation. The Panel reversed the district court’s judgment that UBH wrongfully denied benefits to the named plaintiffs based upon the court’s finding that the Guidelines
impermissibly deviated from GASC.
The Panel held that the district court also erred in its judgment on plaintiffs’ breach of duty claim, which also relied heavily on the district court’s conclusion that the Guidelines impermissibly deviated from GASC. Finally, the Panel held that the district court erred when it excused unnamed class members from demonstrating compliance with the plans’ administrative exhaustion requirement. The panel held that when an ERISA plan does not merely provide for administrative review but, as here, explicitly mandates exhaustion of such procedures before bringing suit in federal court and, importantly, provides no exceptions, application of judicially created exhaustion exceptions would conflict with the written terms of the plan. Accordingly, to the extent that any absent class members’ plans required exhaustion, the district court erred in excusing the failure to satisfy such a contractual requirement. In sum, the Panel held that plaintiffs had Article III standing to bring their breach of fiduciary duty and improper denial of benefits claims pursuant to 29 U.S.C. §§ 112(a)(1)(B) and (a)(3). And the district court did not err in certifying three classes to pursue the fiduciary duty claim. However, because plaintiffs expressly declined to make any showing, or seek a determination of, their entitlement to benefits, permitting plaintiffs to proceed with their denial of benefits claim under the guise of a “reprocessing” remedy on a class-wide basis violated the Rules Enabling Act. Accordingly, the Panel affirmed in part and reversed in part the district court’s class certification order.
On the merits, the Panel held that the district court erred in excusing absent class members’ failure to exhaust administrative remedies as required under the plans. The district court also erred in determining that the Guidelines improperly deviated from GASC based on its interpretation that the plans mandated coverage that was coextensive with GASC. Therefore, the Panel reversed the judgment on plaintiffs’ denial of benefits claim. To the extent the judgment on plaintiffs’ breach of fiduciary duty claim was based on the district court’s erroneous interpretation of the plans, it was also reversed. The Panel affirmed in part, reversed in part, and remanded for further proceedings.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca9/20-17363/20-17363-2023-01-26-0.pdf?ts=1674756192
Employee Benefits-IRS Issues 2023 Deduction Limits and Inclusion Amounts For Passenger Car Depreciation Deductions and Lessee Income Inclusion (Posted 1/31/2023)
The deduction limits and inclusion amounts are contained in Rev. Proc. 2023-14 (Jan. 18, 2023). According to the IRS, the Rev. Proc. has the following purpose:
This revenue procedure provides: (1) two tables of limitations on depreciation deductions for owners of passenger automobiles placed in service by the taxpayer during calendar year 2023; and (2) a table of dollar amounts that must be used to determine income inclusions by lessees of passenger automobiles with a lease term beginning in calendar year 2023. These tables reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. For purposes of this revenue procedure, the term “passenger automobiles” includes trucks and vans.
See the Rev. Proc. for details. It may be found at: https://www.irs.gov/pub/irs-drop/rp-23-14.pdf
The deduction limits and inclusion amounts are contained in Rev. Proc. 2023-14 (Jan. 18, 2023). According to the IRS, the Rev. Proc. has the following purpose:
This revenue procedure provides: (1) two tables of limitations on depreciation deductions for owners of passenger automobiles placed in service by the taxpayer during calendar year 2023; and (2) a table of dollar amounts that must be used to determine income inclusions by lessees of passenger automobiles with a lease term beginning in calendar year 2023. These tables reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. For purposes of this revenue procedure, the term “passenger automobiles” includes trucks and vans.
See the Rev. Proc. for details. It may be found at: https://www.irs.gov/pub/irs-drop/rp-23-14.pdf
Employee Benefits-DOL Issues Guidance On FMLA And Workplace Protections (Posted 1/30/2023)
See: How to Talk to Your Employer About Taking Time Off for Family and Medical Reasons, found at: https://www.dol.gov/agencies/whd/fmla/how-to-talk-to-your-employer-about-leave
See: Family and Medical Leave Act Certification of a Serious Health Condition, found at: https://www.dol.gov/agencies/whd/fmla/certification-of-a-serious-health-condition
See: Workplace Protections for Individuals Impacted by Cancer, found at: https://www.dol.gov/agencies/whd/fmla/workplace-protections-for-individuals-cancer
See: How to Talk to Your Employer About Taking Time Off for Family and Medical Reasons, found at: https://www.dol.gov/agencies/whd/fmla/how-to-talk-to-your-employer-about-leave
See: Family and Medical Leave Act Certification of a Serious Health Condition, found at: https://www.dol.gov/agencies/whd/fmla/certification-of-a-serious-health-condition
See: Workplace Protections for Individuals Impacted by Cancer, found at: https://www.dol.gov/agencies/whd/fmla/workplace-protections-for-individuals-cancer
ERISA-Seventh Circuit Reverses Summary Judgement of District Court Upholding Termination Of Disability Benefits (Posted 1/27/2023)
In Zall v. Standard Insurance Co., No. 22-1096 (7th Cir. 1/19/2023), the Seventh Circuit Court of Appeals says the following:
Plaintiff-appellant Eric Zall worked more than twenty years as a dentist, but chronic pain and numbness in his neck and right arm made it impossible for him to keep working. In 2013, Zall filed a claim for long-term disability benefits under an insurance policy with defendant-appellee Standard Insurance Company. Standard approved his claim and began paying benefits. Six years later, Standard terminated Zall’s benefits.
Standard concluded that Zall’s spinal condition and associated symptoms did not satisfy policy requirements for paying disability benefits for such conditions for more than two years without additional medical findings. Zall filed this suit under ERISA, the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., which governs his policy with Standard. Zall contends that Standard’s termination of his benefits was arbitrary and capricious on the merits. He also contends that Standard violated ERISA’s procedural requirements by failing to afford him “a full and fair review ... of the decision denying the claim.” 29 U.S.C. § 1133. The district court granted summary judgment for Standard.
Zall has appealed. We agree with Zall on the procedural issue, reverse summary judgment, and remand for further proceedings. The decisive legal issue here is which version of an amended procedural regulation issued under § 1133 applies to Standard’s internal administrative review of its termination of Zall’s benefits. The plain language of the 2018 amendments to the regulation shows that the amended version applies, and Standard failed to comply with it.
The case may be found at: https://caselaw.findlaw.com/us-7th-circuit/2177700.html
In Zall v. Standard Insurance Co., No. 22-1096 (7th Cir. 1/19/2023), the Seventh Circuit Court of Appeals says the following:
Plaintiff-appellant Eric Zall worked more than twenty years as a dentist, but chronic pain and numbness in his neck and right arm made it impossible for him to keep working. In 2013, Zall filed a claim for long-term disability benefits under an insurance policy with defendant-appellee Standard Insurance Company. Standard approved his claim and began paying benefits. Six years later, Standard terminated Zall’s benefits.
Standard concluded that Zall’s spinal condition and associated symptoms did not satisfy policy requirements for paying disability benefits for such conditions for more than two years without additional medical findings. Zall filed this suit under ERISA, the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., which governs his policy with Standard. Zall contends that Standard’s termination of his benefits was arbitrary and capricious on the merits. He also contends that Standard violated ERISA’s procedural requirements by failing to afford him “a full and fair review ... of the decision denying the claim.” 29 U.S.C. § 1133. The district court granted summary judgment for Standard.
Zall has appealed. We agree with Zall on the procedural issue, reverse summary judgment, and remand for further proceedings. The decisive legal issue here is which version of an amended procedural regulation issued under § 1133 applies to Standard’s internal administrative review of its termination of Zall’s benefits. The plain language of the 2018 amendments to the regulation shows that the amended version applies, and Standard failed to comply with it.
The case may be found at: https://caselaw.findlaw.com/us-7th-circuit/2177700.html
Employee Benefits-DOL Issues Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2023 (Posted 1/26/2023)
The DOL says the following about the Adjustments:
SUMMARY: The U.S. Department of Labor (Department) is publishing this final rule to adjust for inflation the civil monetary penalties assessed or enforced by the Department, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act). The Inflation Adjustment Act requires the Department to annually adjust its civil money penalty levels for inflation no later than January 15 of each year. The Inflation Adjustment Act provides that agencies shall adjust civil monetary penalties notwithstanding Section 553 of the Administrative Procedure Act (APA). Additionally, the Inflation Adjustment Act provides a cost-of-living formula for adjustment of the civil penalties. Accordingly, this final rule sets forth the Department’s 2023 annual adjustments for inflation to its civil monetary penalties.
DATES: This final rule is effective on January 15, 2023. As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after January 15, 2023.
See the Adjustments for details. They may be found here: https://www.govinfo.gov/content/pkg/FR-2023-01-13/pdf/2023-00271.pdf
The DOL says the following about the Adjustments:
SUMMARY: The U.S. Department of Labor (Department) is publishing this final rule to adjust for inflation the civil monetary penalties assessed or enforced by the Department, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act). The Inflation Adjustment Act requires the Department to annually adjust its civil money penalty levels for inflation no later than January 15 of each year. The Inflation Adjustment Act provides that agencies shall adjust civil monetary penalties notwithstanding Section 553 of the Administrative Procedure Act (APA). Additionally, the Inflation Adjustment Act provides a cost-of-living formula for adjustment of the civil penalties. Accordingly, this final rule sets forth the Department’s 2023 annual adjustments for inflation to its civil monetary penalties.
DATES: This final rule is effective on January 15, 2023. As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after January 15, 2023.
See the Adjustments for details. They may be found here: https://www.govinfo.gov/content/pkg/FR-2023-01-13/pdf/2023-00271.pdf
Employee Benefits-IRS Issues Instructions For 2022 Form 8915-D Qualified 2018 Disaster Retirement Plan Distributions and Repayments (Posted 1/25/2023)
According to the IRS, here is What’s New:
Repayments. The repayment period for a qualified 2019 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2019 disaster distribution was received in 2019. Repayments reported on 2022 Form 8915-D can be used to reduce the income reportable on your 2019, 2020, 2021, or 2022 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
Coronavirus-Related Distributions. Did you repay coronavirus-related distributions for 2022? If you did, do not use 2022 Form 8915-D to report those repayments. Use Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments, instead. We have retired Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which you used to report coronavirus-related distributions and repayments in 2020.
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8915d--2022.pdf
According to the IRS, here is What’s New:
Repayments. The repayment period for a qualified 2019 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2019 disaster distribution was received in 2019. Repayments reported on 2022 Form 8915-D can be used to reduce the income reportable on your 2019, 2020, 2021, or 2022 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
Coronavirus-Related Distributions. Did you repay coronavirus-related distributions for 2022? If you did, do not use 2022 Form 8915-D to report those repayments. Use Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments, instead. We have retired Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which you used to report coronavirus-related distributions and repayments in 2020.
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8915d--2022.pdf
Employee Benefits-IRS Issues Instructions For 2022 Form 8915-C Qualified 2018 Disaster Retirement Plan Distributions and Repayments (Posted 1/24/2023)
According to the IRS, here is What’s New:
Repayments. The repayment period for a qualified 2018 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2018 disaster distribution was received in 2019. Repayments reported on 2022 Form 8915-C can be used to reduce the income reportable on your 2019, 2020, 2021, or 2022 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
Coronavirus-Related Distributions. Did you repay coronavirus-related distributions for 2022? If you did, do not use 2022 Form 8915-C to report those repayments. Use Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments, instead. We have retired Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which you used to report coronavirus-related distributions and repayments in 2020.
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8915c--2022.pdf
According to the IRS, here is What’s New:
Repayments. The repayment period for a qualified 2018 disaster distribution ends 3 years and 1 day after the distribution was received. This is particularly important if your qualified 2018 disaster distribution was received in 2019. Repayments reported on 2022 Form 8915-C can be used to reduce the income reportable on your 2019, 2020, 2021, or 2022 tax return, as applicable; if you have already filed your tax return for the year in question, you will need to amend that return.
Coronavirus-Related Distributions. Did you repay coronavirus-related distributions for 2022? If you did, do not use 2022 Form 8915-C to report those repayments. Use Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments, instead. We have retired Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which you used to report coronavirus-related distributions and repayments in 2020.
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i8915c--2022.pdf
Employee Benefits-CMS Issues Amendment to the Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process Under the No Surprises Act: Change In Administrative Fee (Posted 1/23/2023)
Here is what the CMS says about the amendment:
Summary of Major Updates: This guidance amends the previous “Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act” released on October 31, 2022 (prior 2023 guidance).1 The Departments of Health and Human Services (HHS), Labor, and the Treasury (collectively, the Departments) are amending the prior 2023 guidance to increase the administrative fee for the Federal independent dispute resolution (IDR) process from $50 to $350 per party for disputes initiated during the calendar year beginning January 1, 2023, due to supplemental data analysis and increasing expenditures in carrying out the Federal IDR process since the development of the prior 2023 guidance. These changes are described further in Section II of this guidance. No changes have been made to the 2023 certified IDR entity fee ranges for single or batched determinations.
See the CMS’s 12/23/2022 guidance on the amendment for details. It may be found at: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cy23-federal-idr-process-fee-guidance-amended-to508.pdf
Here is what the CMS says about the amendment:
Summary of Major Updates: This guidance amends the previous “Calendar Year 2023 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act” released on October 31, 2022 (prior 2023 guidance).1 The Departments of Health and Human Services (HHS), Labor, and the Treasury (collectively, the Departments) are amending the prior 2023 guidance to increase the administrative fee for the Federal independent dispute resolution (IDR) process from $50 to $350 per party for disputes initiated during the calendar year beginning January 1, 2023, due to supplemental data analysis and increasing expenditures in carrying out the Federal IDR process since the development of the prior 2023 guidance. These changes are described further in Section II of this guidance. No changes have been made to the 2023 certified IDR entity fee ranges for single or batched determinations.
See the CMS’s 12/23/2022 guidance on the amendment for details. It may be found at: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cy23-federal-idr-process-fee-guidance-amended-to508.pdf
Employee Benefits-IRS Issues 2022 Instructions For Form 5500-EZ (Posted 1/21/2023)
The Instructions may be found at: https://www.irs.gov/pub/irs-prior/i5500ez--2022.pdf
Employee Benefits-IRS Issues New Items Pertaining To Employee Benefits (Posted 1/20/2023)
These new items are:
Rev. Proc. 2023-4, Employee Plans Determination Letters and Private Letter Rulings, found at: https://www.irs.gov/irb/2023-01_IRB#REV-PROC-2023-4
2022 Instructions for Form 8889, Health Savings Accounts (HSAs), found at: https://www.irs.gov/pub/irs-prior/i8889--2022.pdf
Instructions for Form 5330 (Rev. December 2022), Return of Excise Taxes Related to Employee Benefit Plans, found at: https://benefitslink.com/src/irs/i5330-2022.pdf
Form W-4R 2023 Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions, found at: https://www.irs.gov/pub/irs-prior/fw4r--2023.pdf
Form W-4P 2023 Withholding Certificate for Periodic Pension or Annuity Payments, found at: https://www.irs.gov/pub/irs-prior/fw4p--2023.pdf
The Instructions may be found at: https://www.irs.gov/pub/irs-prior/i5500ez--2022.pdf
Employee Benefits-IRS Issues New Items Pertaining To Employee Benefits (Posted 1/20/2023)
These new items are:
Rev. Proc. 2023-4, Employee Plans Determination Letters and Private Letter Rulings, found at: https://www.irs.gov/irb/2023-01_IRB#REV-PROC-2023-4
2022 Instructions for Form 8889, Health Savings Accounts (HSAs), found at: https://www.irs.gov/pub/irs-prior/i8889--2022.pdf
Instructions for Form 5330 (Rev. December 2022), Return of Excise Taxes Related to Employee Benefit Plans, found at: https://benefitslink.com/src/irs/i5330-2022.pdf
Form W-4R 2023 Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions, found at: https://www.irs.gov/pub/irs-prior/fw4r--2023.pdf
Form W-4P 2023 Withholding Certificate for Periodic Pension or Annuity Payments, found at: https://www.irs.gov/pub/irs-prior/fw4p--2023.pdf
Employee Benefits-Government Issues FAQs (Part 56) Pertaining To The Affordable Care Act And Consolidated Appropriations Act, 2021 (Posted 1/19/2023)
The FAQs and Introductions are as follows:
December 23, 2022
Set out below is a Frequently Asked Question (FAQ) regarding implementation of certain provisions of Title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (CAA). This FAQ has been prepared jointly by the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), this FAQ answers questions from stakeholders to help people understand the law and promote compliance.
Reporting on Prescription Drug and Health Care Spending
Internal Revenue Code section 9825, Employee Retirement Income Security Act section 725, and Public Health Service Act section 2799A-10, as added by section 204 of Title II of Division BB of the CAA, require group health plans (plans)1 and health insurance issuers (issuers) to report to the Departments certain information related to prescription drug and other health care expenditures. This information includes, among other things, general information regarding the plan or coverage; the 50 most frequently dispensed brand prescription drugs, the 50 most costly prescription drugs by total annual spending, and the 50 prescription drugs with the greatest increase in plan expenditures over the preceding plan year; total spending by the plan or coverage broken down by the type of costs; and the average monthly premiums paid by participants, beneficiaries, and enrollees and paid by employers.
Plans and issuers must also report the impact on premiums of rebates, fees, and any other remuneration paid by drug manufacturers to the plan or coverage or its administrators or service providers, including the amount paid with respect to each therapeutic class of drugs and for each of the 25 drugs that yielded the highest amount of rebates and other remuneration under the plan or coverage from drug manufacturers during the plan year.
The Departments and the Office of Personnel Management (OPM) issued interim final rules on November 23, 2021 to implement these provisions (November 2021 interim final rules).2 In response to concerns expressed by the stakeholders, the November 2021 interim final rules indicated that the Departments would not initiate enforcement action against a plan or issuer that does not report the required information by the first statutory deadline for reporting (December 27, 2021) or the second statutory deadline for reporting (June 1, 2022), and that instead submits the required information for the 2020 and 2021 reference years by December 27, 2022.
Q1: Will the Departments take enforcement action against any plan or issuer that makes a good faith effort to comply with the prescription drug and health care spending reporting requirements for 2020 and 2021 data?
The Departments recognize the significant operational challenges that plans and issuers may have encountered in complying with these reporting requirements, including arranging and coordinating submission of a plan’s or issuer’s data across multiple reporting entities, and accurately classifying, compiling, and validating the required data. In particular, stakeholders have expressed concern that, given the novelty and complexity of the requirements, there may be errors or other issues with the first round of data submissions, despite good faith efforts by plans and issuers.
Accordingly, for the 2020 and 2021 data submissions that are due by December 27, 2022, the Departments will not take enforcement action with respect to any plan or issuer that uses a good faith, reasonable interpretation of the regulations and the Prescription Drug Data Collection (RxDC) Reporting Instructions in making its submission. The Departments are also providing a submission grace period through January 31, 2023, and will not consider a plan or issuer to be out of compliance with these requirements provided that a good faith submission of 2020 and 2021 data is made on or before that date.
In addition, to facilitate the submission process, the Departments are providing the following clarifications and flexibilities with respect to reporting requirements (including operational requirements within the Health Insurance Oversight System (HIOS) reporting system) for the 2020 and 2021 data:3
See the FAQs for the footnotes. The FAQs may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-56
The FAQs and Introductions are as follows:
December 23, 2022
Set out below is a Frequently Asked Question (FAQ) regarding implementation of certain provisions of Title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (CAA). This FAQ has been prepared jointly by the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments). Like previously issued FAQs (available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs and https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), this FAQ answers questions from stakeholders to help people understand the law and promote compliance.
Reporting on Prescription Drug and Health Care Spending
Internal Revenue Code section 9825, Employee Retirement Income Security Act section 725, and Public Health Service Act section 2799A-10, as added by section 204 of Title II of Division BB of the CAA, require group health plans (plans)1 and health insurance issuers (issuers) to report to the Departments certain information related to prescription drug and other health care expenditures. This information includes, among other things, general information regarding the plan or coverage; the 50 most frequently dispensed brand prescription drugs, the 50 most costly prescription drugs by total annual spending, and the 50 prescription drugs with the greatest increase in plan expenditures over the preceding plan year; total spending by the plan or coverage broken down by the type of costs; and the average monthly premiums paid by participants, beneficiaries, and enrollees and paid by employers.
Plans and issuers must also report the impact on premiums of rebates, fees, and any other remuneration paid by drug manufacturers to the plan or coverage or its administrators or service providers, including the amount paid with respect to each therapeutic class of drugs and for each of the 25 drugs that yielded the highest amount of rebates and other remuneration under the plan or coverage from drug manufacturers during the plan year.
The Departments and the Office of Personnel Management (OPM) issued interim final rules on November 23, 2021 to implement these provisions (November 2021 interim final rules).2 In response to concerns expressed by the stakeholders, the November 2021 interim final rules indicated that the Departments would not initiate enforcement action against a plan or issuer that does not report the required information by the first statutory deadline for reporting (December 27, 2021) or the second statutory deadline for reporting (June 1, 2022), and that instead submits the required information for the 2020 and 2021 reference years by December 27, 2022.
Q1: Will the Departments take enforcement action against any plan or issuer that makes a good faith effort to comply with the prescription drug and health care spending reporting requirements for 2020 and 2021 data?
The Departments recognize the significant operational challenges that plans and issuers may have encountered in complying with these reporting requirements, including arranging and coordinating submission of a plan’s or issuer’s data across multiple reporting entities, and accurately classifying, compiling, and validating the required data. In particular, stakeholders have expressed concern that, given the novelty and complexity of the requirements, there may be errors or other issues with the first round of data submissions, despite good faith efforts by plans and issuers.
Accordingly, for the 2020 and 2021 data submissions that are due by December 27, 2022, the Departments will not take enforcement action with respect to any plan or issuer that uses a good faith, reasonable interpretation of the regulations and the Prescription Drug Data Collection (RxDC) Reporting Instructions in making its submission. The Departments are also providing a submission grace period through January 31, 2023, and will not consider a plan or issuer to be out of compliance with these requirements provided that a good faith submission of 2020 and 2021 data is made on or before that date.
In addition, to facilitate the submission process, the Departments are providing the following clarifications and flexibilities with respect to reporting requirements (including operational requirements within the Health Insurance Oversight System (HIOS) reporting system) for the 2020 and 2021 data:3
- Multiple Submissions by the Same Reporting Entity Allowed
While the interim final rules implemented provisions to prevent unnecessary duplication,4 and a reporting entity generally should create only one submission in HIOS,5 the Departments clarify that when a reporting entity submits on behalf of more than one plan or issuer for a reference year, the reporting entity may create more than one submission for that reference year, instead of including the data of all clients within a single set of plan lists and data files for the year. These multiple submissions will be considered valid and not duplicate submissions. - Submissions by Multiple Reporting Entities Allowed
More than one reporting entity may submit the same data file type on behalf of the same plan or issuer, instead of working together to consolidate all of the plan’s or issuer’s data into a single data file for each type of data. - Aggregation Restriction Suspended
Under 26 CFR 54.9825-5T(b)(2), 29 CFR 2590.725-3(b)(2), and 45 CFR 149.730(b)(2), if multiple reporting entities submit the required data on behalf of one or more plans or issuers in a state and market segment, the data submitted by each of these reporting entities must be aggregated to at least the aggregation level used by the reporting entity that submits data on the total annual spending on health care services on behalf of those plans or issuers. For 2020 and 2021 data only, a reporting entity submitting the required data may, within each state and market segment, aggregate at a less granular level than that used by the reporting entity that is submitting the total annual spending data. - Submission of Premium and Life-Years Data by Email Available for Certain Group Health Plans6
Plans and issuers were instructed to submit information using the HIOS RxDC module.7 However, if a group health plan or its reporting entity is submitting only the plan list, premium and life-years data, and narrative response and is not submitting any other data, it may submit the file by email to RxDCsubmissions@cms.hhs.gov instead of submitting in HIOS. The emailed submission must include the plan list file, premium and life-years data (data file D1), and a narrative response. The submission may include optional supplemental documents. The name of each file should include the reference year of the submission, the plan list or data file type (e.g. P2, D1), and the name of the group health plan sponsor. - Reporting on Vaccines Optional
Plans and issuers were instructed to report information on drug names and codes using the CMS drug and therapeutic class crosswalk.8 The CMS drug name and therapeutic class crosswalk was updated on October 3, 2022, to include National Drug Codes (NDCs) for vaccines. Reporting entities may, but are not required to, incorporate these vaccine NDCs in their data files. - Reporting Amounts Not Applied to the Deductible or Out-of-Pocket Maximum Optional
Reporting entities do not have to report a value for “Amounts not applied to the deductible or out-of-pocket maximum” and the “Rx Amounts not applied to the deductible or out-of-pocket maximum.” A reporting entity should not remove these columns from data files D2 and D6 but may leave blank the data fields in these columns.
See the FAQs for the footnotes. The FAQs may be found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-56
ERISA-District Court Rules That Long-Term Disability Benefits Were Improperly Terminated By The Insurer (Posted 1/18/2023)
In Proctor v. Unum Life Insurance Co. of America, No. 20-2472 (D. Minn. Sep. 29, 2022), the District Court says the following:
Plaintiff Tracy Proctor brings this action against Defendant Unum Life Insurance Company of America (“Unum”), pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., alleging that Unum improperly terminated her long-term disability benefits after she was injured in a car accident. Through her employer, Proctor was covered by a disability policy governed by ERISA and administered by Unum. The parties filed cross Motions for Judgment on the Administrative Record. Proctor seeks an order reinstating her benefits, and Unum seeks an order affirming its decision.
After carefully considering the entire record and arguments presented in written submissions and at a hearing on the Motions, taking into account the credibility of the evidence, and examining applicable law, the Court will find that Unum improperly terminated Proctor's benefits. Accordingly, the Court will order Unum to reinstate Proctor's benefits retroactively to the date of termination, resume paying Proctor ongoing benefits, and award Proctor reasonable attorney fees and costs and prejudgment interest. The Court, however, does not resolve whether Proctor is disabled under an “any gainful occupation” standard and so remands to Unum to resolve this question. Before ordering a specific amount of fees or prejudgment interest, the Court, however, will require Proctor to file an affidavit providing evidence supporting her request for fees and costs and will order additional briefing from the parties on the proper amount of prejudgment interest.
The case may be found at: https://casetext.com/case/proctor-v-unum-life-ins-co-of-am
In Proctor v. Unum Life Insurance Co. of America, No. 20-2472 (D. Minn. Sep. 29, 2022), the District Court says the following:
Plaintiff Tracy Proctor brings this action against Defendant Unum Life Insurance Company of America (“Unum”), pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., alleging that Unum improperly terminated her long-term disability benefits after she was injured in a car accident. Through her employer, Proctor was covered by a disability policy governed by ERISA and administered by Unum. The parties filed cross Motions for Judgment on the Administrative Record. Proctor seeks an order reinstating her benefits, and Unum seeks an order affirming its decision.
After carefully considering the entire record and arguments presented in written submissions and at a hearing on the Motions, taking into account the credibility of the evidence, and examining applicable law, the Court will find that Unum improperly terminated Proctor's benefits. Accordingly, the Court will order Unum to reinstate Proctor's benefits retroactively to the date of termination, resume paying Proctor ongoing benefits, and award Proctor reasonable attorney fees and costs and prejudgment interest. The Court, however, does not resolve whether Proctor is disabled under an “any gainful occupation” standard and so remands to Unum to resolve this question. Before ordering a specific amount of fees or prejudgment interest, the Court, however, will require Proctor to file an affidavit providing evidence supporting her request for fees and costs and will order additional briefing from the parties on the proper amount of prejudgment interest.
The case may be found at: https://casetext.com/case/proctor-v-unum-life-ins-co-of-am
Employee Benefits-IRS Issues Notice 2023-03, 2023 Standard Mileage Rates (Posted 1/17/2023)
The Notice states the following as its purpose:
This notice provides the optional 2023 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan. Additionally, this notice provides the maximum fair market value (FMV) of employer provided automobiles first made available to employees for personal use in calendar year 2023 for which employers may use the fleet-average valuation rule in § 1.61- 21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e).
See the Notice for details. It may be found at: https://benefitslink.com/src/irs/n-23-03.pdf
The Notice states the following as its purpose:
This notice provides the optional 2023 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan. Additionally, this notice provides the maximum fair market value (FMV) of employer provided automobiles first made available to employees for personal use in calendar year 2023 for which employers may use the fleet-average valuation rule in § 1.61- 21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e).
See the Notice for details. It may be found at: https://benefitslink.com/src/irs/n-23-03.pdf
Employee Benefits-IRS Issues Text of and instructions for Form 15315, Annual Certification for Multiemployer Defined Benefit Plans (Posted 1/14/2023)
According to the instructions, the purpose of Form 15315 and the person who files it are the following:
The Form 15315, Annual Certification for Multiemployer Defined Benefit Plans, is used to report the actuarial certification of a multiemployer plan’s status. The plan actuary must file this form annually with the IRS to satisfy the reporting requirements of IRC Section 432(b)(3).
The Pension Protection Act of 2006 (PPA), Pub. L. 109-280, added IRC Section 432 to the Internal Revenue Code. IRC Section 432(b) generally provides for a determination by the enrolled actuary for a multiemployer plan as to whether the plan is in endangered status or in critical status for a plan year. IRC Section 432(b)(3) requires the plan actuary to submit a certification each plan year to the Secretary of the Treasury and to the plan sponsor. The plan actuary must certify whether the plan is in endangered status for the plan year (or would be in endangered status for the plan year but for the application of the special rule under IRC Section 432(b)(5)); whether the plan is or will be in critical status for the plan year or for any of the succeeding five plan years; and whether the plan is in critical and declining status for the plan year. The certification should include a statement as to whether the plan is making the scheduled progress in meeting the requirements of its funding improvement or rehabilitation plan. The actuarial projections, statements, and exhibits that are relevant to the determination of the plan status can be attached to this form.
The enrolled actuary of a multiemployer plan must annually certify the plan’s status and file this form with the IRS.
The Text may be found here: https://www.irs.gov/pub/irs-pdf/f15315.pdf
According to the instructions, the purpose of Form 15315 and the person who files it are the following:
The Form 15315, Annual Certification for Multiemployer Defined Benefit Plans, is used to report the actuarial certification of a multiemployer plan’s status. The plan actuary must file this form annually with the IRS to satisfy the reporting requirements of IRC Section 432(b)(3).
The Pension Protection Act of 2006 (PPA), Pub. L. 109-280, added IRC Section 432 to the Internal Revenue Code. IRC Section 432(b) generally provides for a determination by the enrolled actuary for a multiemployer plan as to whether the plan is in endangered status or in critical status for a plan year. IRC Section 432(b)(3) requires the plan actuary to submit a certification each plan year to the Secretary of the Treasury and to the plan sponsor. The plan actuary must certify whether the plan is in endangered status for the plan year (or would be in endangered status for the plan year but for the application of the special rule under IRC Section 432(b)(5)); whether the plan is or will be in critical status for the plan year or for any of the succeeding five plan years; and whether the plan is in critical and declining status for the plan year. The certification should include a statement as to whether the plan is making the scheduled progress in meeting the requirements of its funding improvement or rehabilitation plan. The actuarial projections, statements, and exhibits that are relevant to the determination of the plan status can be attached to this form.
The enrolled actuary of a multiemployer plan must annually certify the plan’s status and file this form with the IRS.
The Text may be found here: https://www.irs.gov/pub/irs-pdf/f15315.pdf
Employee Benefits-IRS Issues Text of Form 5330, Return of Excise Taxes Related to Employee Benefit Plans (Posted 1/13/2023)
The Text may be found here: https://www.irs.gov/pub/irs-prior/f5330--2022.pdf
The Text may be found here: https://www.irs.gov/pub/irs-prior/f5330--2022.pdf
ERISA-Seventh Circuit Rules That Existing Collective Bargaining Agreements Have Not Been Terminated (posted 1/12/2023)
In Central States Southeast & Southwest Areas Pension Fund v. Zenith Logistics, Inc., No. 20-3438 (7th Cir. 12/22/2022), the Seventh Circuit Court of Appeals says the following:
Defendants Transervice Logistics, Inc. and Zenith Logistics, Inc. (“the employers”) agreed that for the entire duration of two collective bargaining agreements, they would make pension contributions on behalf of covered employees to plaintiff Central States, Southeast and Southwest Areas Pension Fund. Both collective bargaining agreements contained so-called “evergreen clauses” that extended them a year at a time until either party provided timely written notice expressing an “intention to terminate” the agreements.
Both agreements were set to expire on January 31, 2019. After the window for timely notice of intention to terminate on that date had passed, the employers and the union signed new collective bargaining agreements requiring pension contributions to a different fund beginning February 1, 2019. The employers notified the plaintiff fund that they were ceasing contributions, relying on letters the union sent them back in November 2018. The question in these consolidated appeals is whether those letters expressed the union’s intent to terminate the existing collective bargaining agreements, so as to satisfy the termination procedure in the evergreen clauses and end the employers’ obligations to contribute to the plaintiff fund on January 31, 2019.
Our answer is no. The supposed termination letters did not mention termination. They noted the date that the collective bargaining agreements would expire and expressed a desire to meet to negotiate new agreements. But neither of these points communicated an intent to terminate the existing agreements. In the context of an evergreen clause, expiration and termination are distinct concepts. A desire to negotiate a new contract is quite consistent with a desire to leave the existing agreement in place unless and until a new deal is reached. The old agreements thus renewed under the evergreen clauses, and the defendant employers remained obligated to contribute to the plaintiff fund for one more year. We therefore reverse the district court’s dismissals for failure to state a claim for relief.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca7/20-3438/20-3438-2022-12-22.pdf?ts=1671741133
In Central States Southeast & Southwest Areas Pension Fund v. Zenith Logistics, Inc., No. 20-3438 (7th Cir. 12/22/2022), the Seventh Circuit Court of Appeals says the following:
Defendants Transervice Logistics, Inc. and Zenith Logistics, Inc. (“the employers”) agreed that for the entire duration of two collective bargaining agreements, they would make pension contributions on behalf of covered employees to plaintiff Central States, Southeast and Southwest Areas Pension Fund. Both collective bargaining agreements contained so-called “evergreen clauses” that extended them a year at a time until either party provided timely written notice expressing an “intention to terminate” the agreements.
Both agreements were set to expire on January 31, 2019. After the window for timely notice of intention to terminate on that date had passed, the employers and the union signed new collective bargaining agreements requiring pension contributions to a different fund beginning February 1, 2019. The employers notified the plaintiff fund that they were ceasing contributions, relying on letters the union sent them back in November 2018. The question in these consolidated appeals is whether those letters expressed the union’s intent to terminate the existing collective bargaining agreements, so as to satisfy the termination procedure in the evergreen clauses and end the employers’ obligations to contribute to the plaintiff fund on January 31, 2019.
Our answer is no. The supposed termination letters did not mention termination. They noted the date that the collective bargaining agreements would expire and expressed a desire to meet to negotiate new agreements. But neither of these points communicated an intent to terminate the existing agreements. In the context of an evergreen clause, expiration and termination are distinct concepts. A desire to negotiate a new contract is quite consistent with a desire to leave the existing agreement in place unless and until a new deal is reached. The old agreements thus renewed under the evergreen clauses, and the defendant employers remained obligated to contribute to the plaintiff fund for one more year. We therefore reverse the district court’s dismissals for failure to state a claim for relief.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca7/20-3438/20-3438-2022-12-22.pdf?ts=1671741133
ERISA-Fourth Circuit Finds That Plaintiff Is Entitled To Long-Term Disability Benefits (Posted 1/11/2023)
In Anita Tekmen v. Reliance Standard Life Ins., No. 20-1510 (4th Cir. 23/16/2022), the Fourth Circuit Court of Appeals says the following:
Reliance Standard Life Insurance Company denied Anita Tekmen’s claim for long-term disability benefits after concluding that she was not “Totally Disabled” as defined by her disability insurance plan. Tekmen brought this action under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), arguing that the denial of benefits violated that Act. After conducting a bench trial under Federal Rule of Civil Procedure 52, the district court awarded judgment to Tekmen. Reliance appeals. On appeal, we affirm that the district court appropriately resolved the matter under Rule 52 and did not clearly err in its factual findings. We also affirm that Tekmen was entitled to long-term disability benefits under the terms of the plan.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/20-1510/20-1510-2022-12-16.pdf?ts=1671220851
In Anita Tekmen v. Reliance Standard Life Ins., No. 20-1510 (4th Cir. 23/16/2022), the Fourth Circuit Court of Appeals says the following:
Reliance Standard Life Insurance Company denied Anita Tekmen’s claim for long-term disability benefits after concluding that she was not “Totally Disabled” as defined by her disability insurance plan. Tekmen brought this action under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), arguing that the denial of benefits violated that Act. After conducting a bench trial under Federal Rule of Civil Procedure 52, the district court awarded judgment to Tekmen. Reliance appeals. On appeal, we affirm that the district court appropriately resolved the matter under Rule 52 and did not clearly err in its factual findings. We also affirm that Tekmen was entitled to long-term disability benefits under the terms of the plan.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca4/20-1510/20-1510-2022-12-16.pdf?ts=1671220851
ERISA-Ninth Circuit Rules In Favor Of Plan On An ERISA Claim To Recover And Enforce Benefit Payments (Posted 1/10/2023)
The case of Mull v. Motion Picture Industry Health Plan, No. 20-56315 (9th Cir. Jul. 25, 2022) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s summary judgment in favor of plaintiffs in an action against the Motion Picture Industry Health Plan and the Plan’s Board of Directors, alleging violation of the Employee Retirement Income Security Act of 1974, and remanded with instructions for the district court to enter summary judgment in favor of the Plan.
Plaintiff Norman Mull was a participant in the Plan. After his daughter, a covered dependent, was injured in a car accident, the Plan paid benefits to cover a portion of her medical expenses. Under the Plan’s terms, Mull was liable to the Plan for the reimbursement of these benefits if the daughter recovered money from the third party who caused her injuries. Although the daughter obtained such a recovery, she dissipated her settlement funds without reimbursing the Plan, and Mull did not pay the reimbursement amount himself. Invoking a self-help provision in the Plan’s terms, the Plan stopped making benefit payments to Mull and his covered dependents to recoup its unreimbursed payments.
Plaintiffs brought this action to recover the benefits withheld by the Plan and to force the Plan to make benefit payments for covered services in the future. The district court granted summary judgment in favor of plaintiffs, concluding that the Plan could not enforce its self-help remedy. Reversing, the Panel concluded that contractual defenses could not defeat the clear and unambiguous terms setting forth the Plan’s self-help remedy. Assuming without deciding that plaintiffs could invoke the equitable doctrines of illegality, impossibility of performance, and unconscionability, the Panel concluded that these defenses could not override the terms of the Plan under the facts in this case.
The Panel held the requirements for establishing a fiduciary’s claim for equitable relief under ERISA § 502(a)(3), including the existence of an identifiable fund in the possession and control of the person from whom recovery is sought, did not bar the Plan from exercising its self-help remedy as an alternative means of recouping its overpaid benefits. The Panel explained that the Plan was not prosecuting an action for equitable relief under § 502(a)(3), but rather was a defendant in an action that plaintiffs themselves had brought to recover benefits and was using a self-help remedy that required no judicial enforcement. Agreeing with other courts, the Panel held that the Plan’s self-help remedy did not undermine ERISA’s civil enforcement scheme. Rather, ERISA plan fiduciaries may bargain for and implement self-help remedies that do not require judicial enforcement. Finally, the Panel held that res judicata did not bar the Plan’s use of its self-help remedy.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2022/07/25/20-56315.pdf
The case of Mull v. Motion Picture Industry Health Plan, No. 20-56315 (9th Cir. Jul. 25, 2022) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s summary judgment in favor of plaintiffs in an action against the Motion Picture Industry Health Plan and the Plan’s Board of Directors, alleging violation of the Employee Retirement Income Security Act of 1974, and remanded with instructions for the district court to enter summary judgment in favor of the Plan.
Plaintiff Norman Mull was a participant in the Plan. After his daughter, a covered dependent, was injured in a car accident, the Plan paid benefits to cover a portion of her medical expenses. Under the Plan’s terms, Mull was liable to the Plan for the reimbursement of these benefits if the daughter recovered money from the third party who caused her injuries. Although the daughter obtained such a recovery, she dissipated her settlement funds without reimbursing the Plan, and Mull did not pay the reimbursement amount himself. Invoking a self-help provision in the Plan’s terms, the Plan stopped making benefit payments to Mull and his covered dependents to recoup its unreimbursed payments.
Plaintiffs brought this action to recover the benefits withheld by the Plan and to force the Plan to make benefit payments for covered services in the future. The district court granted summary judgment in favor of plaintiffs, concluding that the Plan could not enforce its self-help remedy. Reversing, the Panel concluded that contractual defenses could not defeat the clear and unambiguous terms setting forth the Plan’s self-help remedy. Assuming without deciding that plaintiffs could invoke the equitable doctrines of illegality, impossibility of performance, and unconscionability, the Panel concluded that these defenses could not override the terms of the Plan under the facts in this case.
The Panel held the requirements for establishing a fiduciary’s claim for equitable relief under ERISA § 502(a)(3), including the existence of an identifiable fund in the possession and control of the person from whom recovery is sought, did not bar the Plan from exercising its self-help remedy as an alternative means of recouping its overpaid benefits. The Panel explained that the Plan was not prosecuting an action for equitable relief under § 502(a)(3), but rather was a defendant in an action that plaintiffs themselves had brought to recover benefits and was using a self-help remedy that required no judicial enforcement. Agreeing with other courts, the Panel held that the Plan’s self-help remedy did not undermine ERISA’s civil enforcement scheme. Rather, ERISA plan fiduciaries may bargain for and implement self-help remedies that do not require judicial enforcement. Finally, the Panel held that res judicata did not bar the Plan’s use of its self-help remedy.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2022/07/25/20-56315.pdf
ERISA-Third Circuit Affirms Award of Life Insurance Benefits (Posted 1/9/2023)
In Rizzo v. First Reliance Standard Life Ins. Co., No. 20-1144 (3d Cir. Dec. 16, 2022), the Third Circuit Court of Appeals says the following:
First Reliance Standard Life Insurance Company appeals the District Court’s judgment in favor of Jody Rizzo on her claim for the wrongful denial of benefits from her husband’s life insurance policy under the Employee Retirement Income Security Act of 1974. We will affirm.
The case may be found at: https://www2.ca3.uscourts.gov/opinarch/201144np.pdf
In Rizzo v. First Reliance Standard Life Ins. Co., No. 20-1144 (3d Cir. Dec. 16, 2022), the Third Circuit Court of Appeals says the following:
First Reliance Standard Life Insurance Company appeals the District Court’s judgment in favor of Jody Rizzo on her claim for the wrongful denial of benefits from her husband’s life insurance policy under the Employee Retirement Income Security Act of 1974. We will affirm.
The case may be found at: https://www2.ca3.uscourts.gov/opinarch/201144np.pdf
ERISA-Sixth Circuit Reverses Dismissal Of Claim For Benefit Underpayment (Posted 1/7/2023)
In Gragg v. UPS Pension Plan, No. 22-3379 (6th Cir. Dec. 16, 2022), the Sixth Circuit Court of Appeals says the following:
The limitations period for an ERISA claim “to recover benefits due” under a plan does not expire before the alleged underpayment on which the claim is based. Here, UPS driver Ralph Gragg received from each of two pension plans a letter particulars contradicted each plan’s more general description of the monthly payments that he would receive after turning 65. Eight years later Gragg received his first such payments, which were much lower than he expected. Gragg brought this suit, which the district court held was time-barred because, the court held, Gragg’s claim had accrued when he received the plans’ letters eight years before. But the letters did not cause the injury upon which Gragg sued; the underpayments did. And before that injury his claim had not accrued. We reverse the district court’s dismissal of Gragg’s claim.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0269p-06.pdf
In Gragg v. UPS Pension Plan, No. 22-3379 (6th Cir. Dec. 16, 2022), the Sixth Circuit Court of Appeals says the following:
The limitations period for an ERISA claim “to recover benefits due” under a plan does not expire before the alleged underpayment on which the claim is based. Here, UPS driver Ralph Gragg received from each of two pension plans a letter particulars contradicted each plan’s more general description of the monthly payments that he would receive after turning 65. Eight years later Gragg received his first such payments, which were much lower than he expected. Gragg brought this suit, which the district court held was time-barred because, the court held, Gragg’s claim had accrued when he received the plans’ letters eight years before. But the letters did not cause the injury upon which Gragg sued; the underpayments did. And before that injury his claim had not accrued. We reverse the district court’s dismissal of Gragg’s claim.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0269p-06.pdf
Employee Benefits-IRS Issues Final Regulations Providing An Extension Of Time For Filing To Providers Of Essential Health Coverage (Posted 1/6/2023)
The IRS Summarizes the Final Regulations as follows:
This document includes final regulations under the Internal Revenue Code that provide an automatic extension of time for providers of minimum essential coverage (including health insurance issuers, self-insured employers, and government agencies) to furnish individual statements regarding such coverage and an alternative method for furnishing individual statements when the individual shared responsibility payment amount is zero.
The final regulations also provide an automatic extension of time for ‘‘applicable large employers’’ (generally employers with 50 or more full-time employees, including full-time equivalent employees) to furnish statements relating to health insurance that the applicable large employers offer to their full-time employees. Additionally, the final regulations provide that ‘‘minimum essential coverage,’’ as that term is used in health insurance-related tax laws, does not include Medicaid coverage limited to COVID–19 testing and diagnostic services provided under the Families First Coronavirus Response Act.
The final regulations affect some taxpayers who claim the premium tax credit; health insurance issuers, self-insured employers, government agencies, and other persons that provide minimum essential coverage to individuals; and applicable large employers.
Effective date: These regulations are effective on December 15, 2022.
Applicability date: The regulations under § 1.5000A–2 apply for months beginning after September 28, 2020. The regulations under §§ 1.6055–1 and 301.6056–1 apply for calendar years beginning after December 31, 2021.
The Final Regulations may be found at: https://www.govinfo.gov/content/pkg/FR-2022-12-15/pdf/2022-27212.pdf
The IRS Summarizes the Final Regulations as follows:
This document includes final regulations under the Internal Revenue Code that provide an automatic extension of time for providers of minimum essential coverage (including health insurance issuers, self-insured employers, and government agencies) to furnish individual statements regarding such coverage and an alternative method for furnishing individual statements when the individual shared responsibility payment amount is zero.
The final regulations also provide an automatic extension of time for ‘‘applicable large employers’’ (generally employers with 50 or more full-time employees, including full-time equivalent employees) to furnish statements relating to health insurance that the applicable large employers offer to their full-time employees. Additionally, the final regulations provide that ‘‘minimum essential coverage,’’ as that term is used in health insurance-related tax laws, does not include Medicaid coverage limited to COVID–19 testing and diagnostic services provided under the Families First Coronavirus Response Act.
The final regulations affect some taxpayers who claim the premium tax credit; health insurance issuers, self-insured employers, government agencies, and other persons that provide minimum essential coverage to individuals; and applicable large employers.
Effective date: These regulations are effective on December 15, 2022.
Applicability date: The regulations under § 1.5000A–2 apply for months beginning after September 28, 2020. The regulations under §§ 1.6055–1 and 301.6056–1 apply for calendar years beginning after December 31, 2021.
The Final Regulations may be found at: https://www.govinfo.gov/content/pkg/FR-2022-12-15/pdf/2022-27212.pdf
Employee Benefits-EBSA Issues News Release On The Release Of The Updated Form 5500 Series (Posted 1/5/2023)
Here is what the News Release says:
US DEPARTMENT OF LABOR RELEASES INFORMATIONAL COPIES OF 2022 FORM 5500 SERIES ANNUAL RETURN/REPORT
WASHINGTON – The U.S. Department of Labor’s Employee Benefits Security Administration, the IRS, and the Pension Benefit Guaranty Corp. today released informational copies of the 2022 Form 5500, Form 5500-SF and their related instructions. Informational copies of the IRS 2022 Form 5500-EZ and its instructions will be separately released on the IRS website after Jan. 1, 2023.
Pension and welfare benefit plans required to file an annual return/report regarding their financial condition, investments and operations generally file the necessary Form 5500 series return/report form along with required schedules and attachments.
The Changes to Note section of the 2022 instructions for each of the forms highlights important modifications to the forms, schedules and instructions. The Form 5500 and Form 5500-SF Changes to Note sections include changes related to:
Informational copies cannot be used to file a 2022 Form 5500 Series Annual Return/Report. Filers should monitor efast.dol.gov for information on when the official electronic versions are available and can be filed using software from EFAST2-approved vendors or directly through the EFAST2 website. Assistance with EFAST2 is available online or by calling the EFAST2 Help Desk at 866-463-3278.
In addition, EBSA is modernizing the EFAST2 website authentication process. The existing EFAST2-issued User ID and password log-in process is being phased out and will be replaced by the unified Login.gov single sign-on solution for U.S. government websites. Login.gov enables users to securely log in to many government agencies’ services with a single username and password.
Beginning Jan. 1, 2023, all new EFAST2 website accounts will be created using the Login.gov process. Existing filers may use their EFAST2-issued User ID and password to log in to the EFAST2 website until Sept. 1, 2023. This eight-month grace period provides a gradual transition for filers. However, existing filers may change to a Login.gov account as early as Jan. 1, 2023.
Logging into the EFAST2 website is required to obtain new electronic signature credentials for the Form 5500 Series. It is also required to file the Form PR or to use IFILE, the government’s free Form 5500 Series filing application. Logging into the EFAST2 website is generally not necessary for existing Form 5500 Series filers using approved private software.
See the News Release for links to the updated Form 5500s. The News Release may be found at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500
Here is what the News Release says:
US DEPARTMENT OF LABOR RELEASES INFORMATIONAL COPIES OF 2022 FORM 5500 SERIES ANNUAL RETURN/REPORT
WASHINGTON – The U.S. Department of Labor’s Employee Benefits Security Administration, the IRS, and the Pension Benefit Guaranty Corp. today released informational copies of the 2022 Form 5500, Form 5500-SF and their related instructions. Informational copies of the IRS 2022 Form 5500-EZ and its instructions will be separately released on the IRS website after Jan. 1, 2023.
Pension and welfare benefit plans required to file an annual return/report regarding their financial condition, investments and operations generally file the necessary Form 5500 series return/report form along with required schedules and attachments.
The Changes to Note section of the 2022 instructions for each of the forms highlights important modifications to the forms, schedules and instructions. The Form 5500 and Form 5500-SF Changes to Note sections include changes related to:
- Multiple-employer plans.
- Administrative penalties.
- Schedule MB for multiemployer defined benefit plan and certain money purchase plan actuarial information.
- Schedule R for retirement plan information.
- Schedule SB for single employer defined benefit plan actuarial information.
Informational copies cannot be used to file a 2022 Form 5500 Series Annual Return/Report. Filers should monitor efast.dol.gov for information on when the official electronic versions are available and can be filed using software from EFAST2-approved vendors or directly through the EFAST2 website. Assistance with EFAST2 is available online or by calling the EFAST2 Help Desk at 866-463-3278.
In addition, EBSA is modernizing the EFAST2 website authentication process. The existing EFAST2-issued User ID and password log-in process is being phased out and will be replaced by the unified Login.gov single sign-on solution for U.S. government websites. Login.gov enables users to securely log in to many government agencies’ services with a single username and password.
Beginning Jan. 1, 2023, all new EFAST2 website accounts will be created using the Login.gov process. Existing filers may use their EFAST2-issued User ID and password to log in to the EFAST2 website until Sept. 1, 2023. This eight-month grace period provides a gradual transition for filers. However, existing filers may change to a Login.gov account as early as Jan. 1, 2023.
Logging into the EFAST2 website is required to obtain new electronic signature credentials for the Form 5500 Series. It is also required to file the Form PR or to use IFILE, the government’s free Form 5500 Series filing application. Logging into the EFAST2 website is generally not necessary for existing Form 5500 Series filers using approved private software.
See the News Release for links to the updated Form 5500s. The News Release may be found at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500
Employee Benefits-IRS Issues 2022 Instructions for Forms 1094-C and 1095-C and for Forms 1094-B and 1095-C (Posted 1/4/2023)
The Instructions for Forms 1094-C and 1095-C may be found at: https://www.irs.gov/pub/irs-prior/i109495c--2022.pdf
The Instructions for Forms 1094-B and 1095-B may be found at: https://www.irs.gov/pub/irs-prior/i109495b--2022.pdf
2022 Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) may be found at: https://www.irs.gov/pub/irs-prior/f1094c--2022.pdf
2022 Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) may be found at: https://www.irs.gov/pub/irs-prior/f1095c--2022.pdf
2022 Form 1094-B (Transmittal of Health Coverage Information Returns) may be found at: https://www.irs.gov/pub/irs-prior/f1094b--2022.pdf
2022 Form 1095-B (Health Coverage) may be found at: https://www.irs.gov/pub/irs-prior/f1095b--2022.pdf
The Instructions for Forms 1094-C and 1095-C may be found at: https://www.irs.gov/pub/irs-prior/i109495c--2022.pdf
The Instructions for Forms 1094-B and 1095-B may be found at: https://www.irs.gov/pub/irs-prior/i109495b--2022.pdf
2022 Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) may be found at: https://www.irs.gov/pub/irs-prior/f1094c--2022.pdf
2022 Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) may be found at: https://www.irs.gov/pub/irs-prior/f1095c--2022.pdf
2022 Form 1094-B (Transmittal of Health Coverage Information Returns) may be found at: https://www.irs.gov/pub/irs-prior/f1094b--2022.pdf
2022 Form 1095-B (Health Coverage) may be found at: https://www.irs.gov/pub/irs-prior/f1095b--2022.pdf
Employee Benefits-Sixth Circuit Reverses Dismissal Of FMLA Claims (Posted 1/3/2023)
In Render v. FCA US LLC, No. 21-2851 (6th Cir. Nov. 16, 2022), the Sixth Circuit Court of Appeals says the following:
Plaintiff Edward Render (“Render”) sued his former employer, FCA US, LLC (“FCA”), under the Family Medical Leave Act (“FMLA”), 29 U.S.C. §§ 2601, et seq., alleging that FCA wrongfully denied him FMLA medical leave in violation of 29 U.S.C. § 2615(a)(1), and that FCA retaliated against him for requesting FMLA leave in violation of 29 U.S.C. § 2615(a)(2). FCA moved for summary judgment on both claims, which the district court granted. Render v. FCA US LLC, No. 19-12984, 2021 WL 3085401, at *9 (E.D. Mich. July 20, 2021). For the reasons set forth below, we REVERSE the district court’s order and REMAND for further proceedings.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0241p-06.pdf
In Render v. FCA US LLC, No. 21-2851 (6th Cir. Nov. 16, 2022), the Sixth Circuit Court of Appeals says the following:
Plaintiff Edward Render (“Render”) sued his former employer, FCA US, LLC (“FCA”), under the Family Medical Leave Act (“FMLA”), 29 U.S.C. §§ 2601, et seq., alleging that FCA wrongfully denied him FMLA medical leave in violation of 29 U.S.C. § 2615(a)(1), and that FCA retaliated against him for requesting FMLA leave in violation of 29 U.S.C. § 2615(a)(2). FCA moved for summary judgment on both claims, which the district court granted. Render v. FCA US LLC, No. 19-12984, 2021 WL 3085401, at *9 (E.D. Mich. July 20, 2021). For the reasons set forth below, we REVERSE the district court’s order and REMAND for further proceedings.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0241p-06.pdf
Employee Benefits-IRS Issues Final Regulations On Information Reporting of Health Insurance Coverage and Other Issues under Sections 5000A, 6055, and 6056 (Posted 1/2/2023)
The IRS says the following in summary of the Final Regulations:
This document includes final regulations under the Internal Revenue Code that provide an automatic extension of time for providers of minimum essential coverage (including health insurance issuers, self-insured employers, and government agencies) to furnish individual statements regarding such coverage and an alternative method for furnishing individual statements when the individual shared responsibility payment amount is zero.
The final regulations also provide an automatic extension of time for “applicable large employers” (generally employers with 50 or more full-time employees, including full-time equivalent employees) to furnish statements relating to health insurance that the applicable large employers offer to their full-time employees. Additionally, the final regulations provide that “minimum essential coverage,” as that term is used in health insurance-related tax laws, does not include Medicaid coverage limited to COVID-19 testing and diagnostic services provided under the Families First Coronavirus Response Act.
The final regulations affect some taxpayers who claim the premium tax credit; health insurance issuers, self-insured employers, government agencies, and other persons that provide minimum essential coverage to individuals; and applicable large employers.
Effective date: These regulations are effective on the date of publication in the Federal Register (which is 12/15/2022).
The Final Regulations may be found at: https://public-inspection.federalregister.gov/2022-27212.pdf
The IRS says the following in summary of the Final Regulations:
This document includes final regulations under the Internal Revenue Code that provide an automatic extension of time for providers of minimum essential coverage (including health insurance issuers, self-insured employers, and government agencies) to furnish individual statements regarding such coverage and an alternative method for furnishing individual statements when the individual shared responsibility payment amount is zero.
The final regulations also provide an automatic extension of time for “applicable large employers” (generally employers with 50 or more full-time employees, including full-time equivalent employees) to furnish statements relating to health insurance that the applicable large employers offer to their full-time employees. Additionally, the final regulations provide that “minimum essential coverage,” as that term is used in health insurance-related tax laws, does not include Medicaid coverage limited to COVID-19 testing and diagnostic services provided under the Families First Coronavirus Response Act.
The final regulations affect some taxpayers who claim the premium tax credit; health insurance issuers, self-insured employers, government agencies, and other persons that provide minimum essential coverage to individuals; and applicable large employers.
Effective date: These regulations are effective on the date of publication in the Federal Register (which is 12/15/2022).
The Final Regulations may be found at: https://public-inspection.federalregister.gov/2022-27212.pdf
ERISA-Eighth Circuit Rules That Employer Contributions Are Due Only For Construction And Highway Work (Posted 12/31/2020)
In Cons. Laborers Welfare Fund v. RoadSafe Traffic Systems, Inc., No. 22-1050 (8th Cir. 12/9/2022), the Eighth Circuit Court of Appeals says the following:
A collective bargaining agreement (“CBA”) required RoadSafe Traffic Systems, Inc. to contribute to four employee benefits Funds. The Funds sued for unpaid contributions, alleging that the CBA unambiguously requires contributions for all hours worked by covered employees, regardless of the type of work performed. RoadSafe countered that the CBA unambiguously requires contributions only for construction and highway work. The district court1 granted summary judgment to RoadSafe. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca8/22-1050/22-1050-2022-12-09.pdf?ts=1670601697
In Cons. Laborers Welfare Fund v. RoadSafe Traffic Systems, Inc., No. 22-1050 (8th Cir. 12/9/2022), the Eighth Circuit Court of Appeals says the following:
A collective bargaining agreement (“CBA”) required RoadSafe Traffic Systems, Inc. to contribute to four employee benefits Funds. The Funds sued for unpaid contributions, alleging that the CBA unambiguously requires contributions for all hours worked by covered employees, regardless of the type of work performed. RoadSafe countered that the CBA unambiguously requires contributions only for construction and highway work. The district court1 granted summary judgment to RoadSafe. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca8/22-1050/22-1050-2022-12-09.pdf?ts=1670601697
Employee Benefits-IRS Issues 2022 Instructions For Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (Posted 12/30/2022)
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i5329--2022.pdf
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/i5329--2022.pdf
Employee Benefits-IRS Corrects Notice 2022-41 Pertaining To Cafeteria Plans (Posted 12/29/2022)
The correction is in Announcement 2022-22. In the Announcement, the IRS says the following:
Notice 2022-41, 2022-43 I.R.B. 304 (Oct. 24, 2022), contains a typographical error in the first sentence of the “GUIDANCE” section on page 306. The sentence refers to a non-calendar year cafeteria plan allowing an employee to revoke an election but should instead refer to any cafeteria plan. The sentence is amended to delete “non-calendar year.” The sentence now reads, in part, as follows:
In addition to the situations described in Notice 2014-55, a cafeteria plan may allow an employee to revoke prospectively an election of family coverage under a group health plan that is not a health FSA and that provides minimum essential coverage (as defined in section 5000A(f)(1)) provided the following conditions are satisfied:
The Announcement may be found at: https://www.irs.gov/pub/irs-irbs/irb22-47.pdf
The correction is in Announcement 2022-22. In the Announcement, the IRS says the following:
Notice 2022-41, 2022-43 I.R.B. 304 (Oct. 24, 2022), contains a typographical error in the first sentence of the “GUIDANCE” section on page 306. The sentence refers to a non-calendar year cafeteria plan allowing an employee to revoke an election but should instead refer to any cafeteria plan. The sentence is amended to delete “non-calendar year.” The sentence now reads, in part, as follows:
In addition to the situations described in Notice 2014-55, a cafeteria plan may allow an employee to revoke prospectively an election of family coverage under a group health plan that is not a health FSA and that provides minimum essential coverage (as defined in section 5000A(f)(1)) provided the following conditions are satisfied:
The Announcement may be found at: https://www.irs.gov/pub/irs-irbs/irb22-47.pdf
Employee Benefits-IRS Issues 2023 Table of Covered Compensation(Posted 12/28/2022)
The IRS Has issued Rev. Rul. 2022-24. According to the IRS, this revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, for the 2023 plan year.
See the Revenue Ruling for details. It may be found here: https://www.irs.gov/pub/irs-drop/rr-22-24.pdf
The IRS Has issued Rev. Rul. 2022-24. According to the IRS, this revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, for the 2023 plan year.
See the Revenue Ruling for details. It may be found here: https://www.irs.gov/pub/irs-drop/rr-22-24.pdf
Employee Benefits-IRS Issues 2022 Form 8941, Credit for Small Employer Health Insurance Premiums (Posted 12/27/2022)
The Form may be found at: https://www.irs.gov/pub/irs-prior/f8941--2022.pdf
The Form may be found at: https://www.irs.gov/pub/irs-prior/f8941--2022.pdf
Employee Benefits-PBGC Issues Final Regs On Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age (Posted 12/26/2022)
The PBGC says the following in summary of the Final Regs:
This rule amends the Pension Benefit Guaranty Corporation’s regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2023. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. This rule is effective January 1, 2023 and will be published in the Federal register on December 7, 2022.
See the Final Regs for details. A copy of the Final Regs may be found at: https://public-inspection.federalregister.gov/2022-26597.pdf
The PBGC says the following in summary of the Final Regs:
This rule amends the Pension Benefit Guaranty Corporation’s regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2023. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. This rule is effective January 1, 2023 and will be published in the Federal register on December 7, 2022.
See the Final Regs for details. A copy of the Final Regs may be found at: https://public-inspection.federalregister.gov/2022-26597.pdf
Employee Benefits-IRS Issues 2023 Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.(Posted 12/24/2022)
The Form may be found here: https://www.irs.gov/pub/irs-prior/f1099r--2023.pdf
The Form may be found here: https://www.irs.gov/pub/irs-prior/f1099r--2023.pdf
Taxes-IRS Issues Notice For Calculating The Qualifying Payment Amounts In 2023 (Posted 12/23/2022)
The IRS says that the following is the purpose and scope of Notice 2023-4:
Pursuant to Treas. Reg. § 54.9816-6T(c), 29 CFR 2590.716-6(c), and 45 CFR 149.140(c), this notice provides the percentage increase for calculating the qualifying payment amounts for items and services furnished during 2023 for purposes of sections 9816 and 9817 of the Internal Revenue Code (Code), sections 716 and 717 of the Employee Retirement Income Security Act of 1974 (ERISA), and sections 2799A-1 and 2799A-2 of the Public Health Service Act (PHS Act). This notice was drafted in consultation with the Departments of Labor and Health and Human Services. Similar guidance for items and services furnished during 2022 was published in Revenue Procedure 2022-11, 2022-3 IRB 449, and Notice 2022-11, 2022-14 IRB 939. Percentage increases for calculating the qualifying payment amounts for items and services furnished in future years may be published in the annual revenue procedure containing inflation-adjusted items for the following tax year.
See Notice 2023-4 for details. The Notice may be found at: https://benefitslink.com/src/irs/n-23-04.pdf
The IRS says that the following is the purpose and scope of Notice 2023-4:
Pursuant to Treas. Reg. § 54.9816-6T(c), 29 CFR 2590.716-6(c), and 45 CFR 149.140(c), this notice provides the percentage increase for calculating the qualifying payment amounts for items and services furnished during 2023 for purposes of sections 9816 and 9817 of the Internal Revenue Code (Code), sections 716 and 717 of the Employee Retirement Income Security Act of 1974 (ERISA), and sections 2799A-1 and 2799A-2 of the Public Health Service Act (PHS Act). This notice was drafted in consultation with the Departments of Labor and Health and Human Services. Similar guidance for items and services furnished during 2022 was published in Revenue Procedure 2022-11, 2022-3 IRB 449, and Notice 2022-11, 2022-14 IRB 939. Percentage increases for calculating the qualifying payment amounts for items and services furnished in future years may be published in the annual revenue procedure containing inflation-adjusted items for the following tax year.
See Notice 2023-4 for details. The Notice may be found at: https://benefitslink.com/src/irs/n-23-04.pdf
Employee Benefits-IRS Issues Publication 4810 Specifications For Electronic Filing Of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits (Posted 12/22/2020)
At the start of the Publication, the IRS says the following:
Sec. 1 Introduction
Rev. Proc. 2015-47, 2015-39 I.R.B. 419 sets forth procedures for plan administrators and plan sponsors that are required to file electronically Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, to request a waiver of the electronic filing requirement due to economic hardship. This publication outlines the communication procedures, record format, validation criteria, and errors associated with the electronic filing of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits.
The file specifications and record layouts should be used in conjunction with the following:
• Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits
• Instructions for Form 8955-SSA
Sec. 2 Purpose
The purpose of this publication is to provide the specifications for electronically filing Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, with the Internal Revenue Service. This publication must be used to prepare current and prior year Form 8955-SSAs.
See the Publication for details. It may be found at: https://www.irs.gov/pub/irs-pdf/p4810.pdf
At the start of the Publication, the IRS says the following:
Sec. 1 Introduction
Rev. Proc. 2015-47, 2015-39 I.R.B. 419 sets forth procedures for plan administrators and plan sponsors that are required to file electronically Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, to request a waiver of the electronic filing requirement due to economic hardship. This publication outlines the communication procedures, record format, validation criteria, and errors associated with the electronic filing of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits.
The file specifications and record layouts should be used in conjunction with the following:
• Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits
• Instructions for Form 8955-SSA
Sec. 2 Purpose
The purpose of this publication is to provide the specifications for electronically filing Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, with the Internal Revenue Service. This publication must be used to prepare current and prior year Form 8955-SSAs.
See the Publication for details. It may be found at: https://www.irs.gov/pub/irs-pdf/p4810.pdf
Employee Benefits-DOL Adopts Amendments To Investment Duties Regulation Under ERISA (Posted 12/21/2020)
The DOL summarizes its actions as follows. The Department of Labor (Department) is adopting amendments to the Investment Duties regulation under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The amendments clarify the application of ERISA’s fiduciary duties of prudence and loyalty to selecting investments and investment courses of action, including selecting qualified default investment alternatives, exercising shareholder rights, such as proxy voting, and the use of written proxy voting policies and guidelines. The amendments reverse and modify certain amendments to the Investment Duties regulation adopted in 2020. The amendments are effective on January 30, 2023 (the 60th day after publication in the Federal Register).
See the Amendments for details. They may be found at: https://www.dol.gov/sites/dolgov/files/ebsa/temporary-postings/prudence-and-loyalty-in-selecting-plan-investments-and-exercising-shareholder-rights-final-rule.pdf
The DOL has issued a corresponding Fact Sheet, entitled “ Final Rule on Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights”.
The Fact Sheet may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rule-on-prudence-and-loyalty-in-selecting-plan-investments-and-exercising-shareholder-rights
The DOL summarizes its actions as follows. The Department of Labor (Department) is adopting amendments to the Investment Duties regulation under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The amendments clarify the application of ERISA’s fiduciary duties of prudence and loyalty to selecting investments and investment courses of action, including selecting qualified default investment alternatives, exercising shareholder rights, such as proxy voting, and the use of written proxy voting policies and guidelines. The amendments reverse and modify certain amendments to the Investment Duties regulation adopted in 2020. The amendments are effective on January 30, 2023 (the 60th day after publication in the Federal Register).
See the Amendments for details. They may be found at: https://www.dol.gov/sites/dolgov/files/ebsa/temporary-postings/prudence-and-loyalty-in-selecting-plan-investments-and-exercising-shareholder-rights-final-rule.pdf
The DOL has issued a corresponding Fact Sheet, entitled “ Final Rule on Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights”.
The Fact Sheet may be found here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rule-on-prudence-and-loyalty-in-selecting-plan-investments-and-exercising-shareholder-rights
ERISA-Second Circuit Upholds Defendant’s Argument Against Class Certification In A Case Claiming A Prohibited Transaction Had Occured (Posted 12/20/2020)
In Haley v. TIAA, No. 21-805 (2d Cir. 12/1/2022), the Second Circuit Court of Appeals says the following:
Melissa Haley alleges that a participant loan program that Teachers Insurance and Annuity Association of America (TIAA) offered to her retirement plan is a prohibited transaction under the Employee Retirement Income Security Act of 1974 (ERISA). After ruling that Haley’s suit could proceed against TIAA as a non-fiduciary under ERISA, the district court certified a class of employee benefit plans whose fiduciaries contracted with TIAA to offer loans that were secured by a participant’s retirement savings.
In this interlocutory appeal challenging the certification decision, TIAA argues that the district court erred when it found that common issues predominated over individual ones without addressing the effect of ERISA’s statutory exemptions on liability class wide and without making any factual findings as to the similarities of the loans. We agree. Because the predominance inquiry of Federal Rule of Civil Procedure 23(b)(3) requires that a district court analyze defenses, and the court did not do so here, we VACATE the district court’s decision and REMAND for proceedings consistent with this opinion.
The case may be found at: https://law.justia.com/cases/federal/appellate-courts/ca2/21-805/21-805-2022-12-01.html?utm_source=summary-newsletters&utm_medium=email&utm_campaign=2022-12-02-erisa-eee9b4bd44&utm_content=text-case-read-more-1
In Haley v. TIAA, No. 21-805 (2d Cir. 12/1/2022), the Second Circuit Court of Appeals says the following:
Melissa Haley alleges that a participant loan program that Teachers Insurance and Annuity Association of America (TIAA) offered to her retirement plan is a prohibited transaction under the Employee Retirement Income Security Act of 1974 (ERISA). After ruling that Haley’s suit could proceed against TIAA as a non-fiduciary under ERISA, the district court certified a class of employee benefit plans whose fiduciaries contracted with TIAA to offer loans that were secured by a participant’s retirement savings.
In this interlocutory appeal challenging the certification decision, TIAA argues that the district court erred when it found that common issues predominated over individual ones without addressing the effect of ERISA’s statutory exemptions on liability class wide and without making any factual findings as to the similarities of the loans. We agree. Because the predominance inquiry of Federal Rule of Civil Procedure 23(b)(3) requires that a district court analyze defenses, and the court did not do so here, we VACATE the district court’s decision and REMAND for proceedings consistent with this opinion.
The case may be found at: https://law.justia.com/cases/federal/appellate-courts/ca2/21-805/21-805-2022-12-01.html?utm_source=summary-newsletters&utm_medium=email&utm_campaign=2022-12-02-erisa-eee9b4bd44&utm_content=text-case-read-more-1
Employee Benefits-IRS Issues 2022 Required Amendments List for Individually Designed Qualified and Section 403(b) Plans (Posted 12/19/2022)
The List is found in Notice 2022-62. The IRS says that the Notice has the following purpose:
This notice sets forth the 2022 Required Amendments List (2022 RA List). The Required Amendments List (RA List) applies to both individually designed plans qualified under section 401(a) of the Internal Revenue Code (Code) (qualified individually designed plans) and individually designed plans that satisfy the requirements of section 403(b) (section 403(b) individually designed plans).
Section 5 of Rev. Proc. 2022-40, 2022-47 IRB 487, provides generally that, except as otherwise provided by statute or in regulations or other guidance published in the Internal Revenue Bulletin (IRB), in the case of an individually designed qualified or section 403(b) plan that is not a governmental plan within the meaning of section 414(d), the remedial amendment period for (1) a disqualifying provision or (2) a form defect first occurring after June 30, 2020, that arises as a result of a change in qualification requirements or section 403(b) requirements, as applicable, expires on the last day of the second calendar year that begins after the issuance of the RA List on which the change in qualification requirements or section 403(b) requirements appears.
Pursuant to section 5.03(1)(c) and section 6.01 of Rev. Proc. 2022-40, December 31, 2024, generally is both the last day of the remedial amendment period and the plan amendment deadline with respect to (1) a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2022 RA List, and (2) a form defect arising as a result of a change in section 403(b) requirements that appears on the 2022 RA List. Later dates may apply to a governmental plan within the meaning of section 414(d) pursuant to section 5.03(2)(c) of Rev. Proc. 2022-40. References to qualification requirements and to section 403(b) requirements in Parts III and IV of this notice are referred to, separately and collectively, as “requirements.”
See the Notice for details. It may be found at: https://www.irs.gov/pub/irs-drop/n-22-62.pdf
The List is found in Notice 2022-62. The IRS says that the Notice has the following purpose:
This notice sets forth the 2022 Required Amendments List (2022 RA List). The Required Amendments List (RA List) applies to both individually designed plans qualified under section 401(a) of the Internal Revenue Code (Code) (qualified individually designed plans) and individually designed plans that satisfy the requirements of section 403(b) (section 403(b) individually designed plans).
Section 5 of Rev. Proc. 2022-40, 2022-47 IRB 487, provides generally that, except as otherwise provided by statute or in regulations or other guidance published in the Internal Revenue Bulletin (IRB), in the case of an individually designed qualified or section 403(b) plan that is not a governmental plan within the meaning of section 414(d), the remedial amendment period for (1) a disqualifying provision or (2) a form defect first occurring after June 30, 2020, that arises as a result of a change in qualification requirements or section 403(b) requirements, as applicable, expires on the last day of the second calendar year that begins after the issuance of the RA List on which the change in qualification requirements or section 403(b) requirements appears.
Pursuant to section 5.03(1)(c) and section 6.01 of Rev. Proc. 2022-40, December 31, 2024, generally is both the last day of the remedial amendment period and the plan amendment deadline with respect to (1) a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2022 RA List, and (2) a form defect arising as a result of a change in section 403(b) requirements that appears on the 2022 RA List. Later dates may apply to a governmental plan within the meaning of section 414(d) pursuant to section 5.03(2)(c) of Rev. Proc. 2022-40. References to qualification requirements and to section 403(b) requirements in Parts III and IV of this notice are referred to, separately and collectively, as “requirements.”
See the Notice for details. It may be found at: https://www.irs.gov/pub/irs-drop/n-22-62.pdf
Employee Benefits-Ninth Circuit Remands Claim For Long-Term Disability Benefits, Disagreeing With The District Court’s De Novo Review Of The Claim Posted 12/17/2022)
The case of Collier v. Lincoln Life Assurance Company of Boston, No. 21-55465 (9th Cir. Nov. 21, 2022) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s judgment in favor of Lincoln Life Assurance Company of Boston and remanded in an ERISA action brought by Vicki Collier. Collier challenged Lincoln’s denial of her claim for long-term disability benefits.
On de novo review, the district court affirmed Lincoln’s denial of Collier’s claim, but it adopted new rationales that the ERISA plan administrator did not rely on during the administrative process. Specifically, the district court found for the first time that Collier was not credible and that she had failed to supply objective evidence to support her claim.
The Panel held that when a district court reviews de novo a plan administrator’s denial of benefits, it examines the administrative record without deference to the administrator’s conclusions to determine whether the administrator erred in denying benefits. The district court’s task is to determine whether the plan administrator’s decision is supported by the record, not to engage in a new determination of whether the claimant is disabled. Accordingly, the district court must examine only the rationales the plan administrator relied on in denying benefits and cannot adopt new rationales that the claimant had no opportunity to respond to during the administrative process.
The Panel held that the district court erred because it relied on new rationales to affirm the denial of benefits. As Lincoln did not present these rationales during the administrative process, Collier was afforded no opportunity to respond to them, and was denied her statutory right to “full and fair review” of the denial of her claim. The Panel reversed and remanded for the district court to reconsider Collier’s claim de novo, with no deference to the administrator’s decision, and to determine whether the record evidence supports the reasons on which Lincoln relied to deny benefits.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2022/11/21/21-55465.pdf
The case of Collier v. Lincoln Life Assurance Company of Boston, No. 21-55465 (9th Cir. Nov. 21, 2022) may be summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) reversed the district court’s judgment in favor of Lincoln Life Assurance Company of Boston and remanded in an ERISA action brought by Vicki Collier. Collier challenged Lincoln’s denial of her claim for long-term disability benefits.
On de novo review, the district court affirmed Lincoln’s denial of Collier’s claim, but it adopted new rationales that the ERISA plan administrator did not rely on during the administrative process. Specifically, the district court found for the first time that Collier was not credible and that she had failed to supply objective evidence to support her claim.
The Panel held that when a district court reviews de novo a plan administrator’s denial of benefits, it examines the administrative record without deference to the administrator’s conclusions to determine whether the administrator erred in denying benefits. The district court’s task is to determine whether the plan administrator’s decision is supported by the record, not to engage in a new determination of whether the claimant is disabled. Accordingly, the district court must examine only the rationales the plan administrator relied on in denying benefits and cannot adopt new rationales that the claimant had no opportunity to respond to during the administrative process.
The Panel held that the district court erred because it relied on new rationales to affirm the denial of benefits. As Lincoln did not present these rationales during the administrative process, Collier was afforded no opportunity to respond to them, and was denied her statutory right to “full and fair review” of the denial of her claim. The Panel reversed and remanded for the district court to reconsider Collier’s claim de novo, with no deference to the administrator’s decision, and to determine whether the record evidence supports the reasons on which Lincoln relied to deny benefits.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2022/11/21/21-55465.pdf
Employee Benefits-PBGC Updates Section 4044/4045 Mortality Tables (Posted 12/16/2022)
Here is what the PBGC says:
ERISA Section 4044 Mortality Table – This table is used to determine liabilities when a single-employer plan terminates in an involuntary or distress termination (per 29 CFR 4044). It is also used when a multiemployer plan incurs a mass withdrawal (per 29 CFR 4281).
ERISA Section 4050 Mortality Table – This table is a unisex version of the ERISA Section 4044 Table. It is used in specified situations to determine the benefit transfer amount under the Missing Participants Program (per 29 CFR 4050).
The Tables were updated as of 11/18/2022. They may be found at: https://www.pbgc.gov/prac/mortality-retirement-and-pv-max-guarantee/erisa-mortality-tables
Here is what the PBGC says:
ERISA Section 4044 Mortality Table – This table is used to determine liabilities when a single-employer plan terminates in an involuntary or distress termination (per 29 CFR 4044). It is also used when a multiemployer plan incurs a mass withdrawal (per 29 CFR 4281).
ERISA Section 4050 Mortality Table – This table is a unisex version of the ERISA Section 4044 Table. It is used in specified situations to determine the benefit transfer amount under the Missing Participants Program (per 29 CFR 4050).
The Tables were updated as of 11/18/2022. They may be found at: https://www.pbgc.gov/prac/mortality-retirement-and-pv-max-guarantee/erisa-mortality-tables
Employee Benefits-IRS Issues Additional Permitted Election Changes for Health Coverage Under Section 125 Cafeteria Plans Posted 12/15/2022)
The IRS has issued Notice 2022-41. It states that the purpose of the Notice is the following:
This notice expands the application of the permitted change-in-status rules for health coverage under a section 125 cafeteria plan (cafeteria plan). In particular, this notice addresses the situation in which, during a period of coverage (typically a plan year), a cafeteria plan participant may wish to revoke the employee’s election under the cafeteria plan for other than-self-only (family) coverage under a group health plan (other than a flexible spending arrangement (FSA)) in order to allow one or more family members to enroll in a Qualified Health Plan (QHP) through a Health Insurance Exchange (Exchange) in the individual market.
Under this notice, the employee will be able to elect out of family coverage and into self-only coverage (or family coverage including one or more already-covered related individuals) under that health plan prospectively during a period of coverage, provided specific conditions are satisfied. The Department of the Treasury and the Internal Revenue Service intend to modify the Income Tax Regulations under section 125 of the Internal Revenue Code (Code) consistent with the provisions of this notice.
Taxpayers may rely on the guidance in this notice for plan amendments allowing elections effective on or after January 1, 2023. This notice is being issued in conjunction with regulations under section 36B, which provide that the affordability of an offer of group health plan coverage for a related individual is based on the employee’s cost to cover the employee and the employee’s related individuals. See § 1.36B2(c)(3)(v)(A)(2); 87 FR 61979 (Oct. 13, 2022).
See the Notice for details on the new rules. The Notice may be found at: https://www.irs.gov/pub/irs-drop/n-22-41.pdf
The IRS has issued Notice 2022-41. It states that the purpose of the Notice is the following:
This notice expands the application of the permitted change-in-status rules for health coverage under a section 125 cafeteria plan (cafeteria plan). In particular, this notice addresses the situation in which, during a period of coverage (typically a plan year), a cafeteria plan participant may wish to revoke the employee’s election under the cafeteria plan for other than-self-only (family) coverage under a group health plan (other than a flexible spending arrangement (FSA)) in order to allow one or more family members to enroll in a Qualified Health Plan (QHP) through a Health Insurance Exchange (Exchange) in the individual market.
Under this notice, the employee will be able to elect out of family coverage and into self-only coverage (or family coverage including one or more already-covered related individuals) under that health plan prospectively during a period of coverage, provided specific conditions are satisfied. The Department of the Treasury and the Internal Revenue Service intend to modify the Income Tax Regulations under section 125 of the Internal Revenue Code (Code) consistent with the provisions of this notice.
Taxpayers may rely on the guidance in this notice for plan amendments allowing elections effective on or after January 1, 2023. This notice is being issued in conjunction with regulations under section 36B, which provide that the affordability of an offer of group health plan coverage for a related individual is based on the employee’s cost to cover the employee and the employee’s related individuals. See § 1.36B2(c)(3)(v)(A)(2); 87 FR 61979 (Oct. 13, 2022).
See the Notice for details on the new rules. The Notice may be found at: https://www.irs.gov/pub/irs-drop/n-22-41.pdf
Employee Benefits-PBGC Issues Comprehensive Premium Filing Instructions for 2023 Plan Years (Posted 12/14/2022)
The Introduction and What’s New are the following:
Introduction
Payment of premiums to the Pension Benefit Guaranty Corporation (PBGC) is required by sections 4006 and 4007 of the Employee Retirement Income Security Act of 1974 (ERISA), and PBGC’s Premium Regulations (29 CFR Parts 4006 and 4007). There are two kinds of annual premiums: Flat-rate Premium, which applies to all plans, and Variable-rate Premium (VRP), which applies only to Single-employer Plans. Every covered plan under ERISA section 4021 must make a premium filing each year. The due dates are described in the “When to File” section. Electronic filing is mandatory for all plans.
My Plan Administration Account (My PAA) is a secure web-based application that enables pension plan professionals to electronically submit premium filings to PBGC in accordance with PBGC’s regulations. Electronic filings may be prepared using My PAA’s data entry screens or with compatible private-sector software. See “How to File” section for more information. For more information on e-filing options, see Appendix 3.
This document provides information for plans paying premiums for plan years beginning in 2023, including instructions for each data element that must be reported. Plan years beginning before 2023 If you are filing for a previous year or amending a filing for a previous year, you must follow the instructions for that year (available from the “Premium Filing” web page). However, because contact information and information about electronic funds transfers change periodically, the most recent information should be used instead of the information included in an instruction booklet for a prior plan year.
Defined terms Appendix 1 provides definitions for terminology used in this document. In general, the defined terms are capitalized to signal the reader to refer to Appendix 1 for more information. The convention of capitalizing the defined terms is not followed for a few defined terms such as “participant,” “we,” “you,” and “your.” In addition, this convention is not followed on the illustrative form (i.e., in the “Data to be Submitted” section).
What’s New
The filing requirements for 2023 are almost identical to the filing requirements for 2022. Here are the key changes to note for 2023:
§ Changes in premium rates:
– Single-employer plans other than CSEC plans: The Flat-rate Premium is $96 per-participant, up from $88. The Variable-rate Premium is $52 per $1,000 of unfunded vested benefits capped at $652 times the number of Participants, up from $48 per $1,000 of unfunded vested benefits capped at $598 times the number of Participants.
– Multiemployer Plans: The Flat-rate Premium is $35 per-participant, up from $32. Multiemployer plans do not pay Variable-rate Premiums. Premium rates for CSEC plans are not indexed, and thus those rates have not changed.
§ The Premium Customer Service email address has changed from premiums@pbgc.gov to pbgc_premiums@custhelp.com. Emails sent to the old address will be forwarded to the new mailbox.
See the Instructions for details. They Instructions may be found at: https://www.pbgc.gov/sites/default/files/documents/2023-premium-payment-instructions.pdf
The Introduction and What’s New are the following:
Introduction
Payment of premiums to the Pension Benefit Guaranty Corporation (PBGC) is required by sections 4006 and 4007 of the Employee Retirement Income Security Act of 1974 (ERISA), and PBGC’s Premium Regulations (29 CFR Parts 4006 and 4007). There are two kinds of annual premiums: Flat-rate Premium, which applies to all plans, and Variable-rate Premium (VRP), which applies only to Single-employer Plans. Every covered plan under ERISA section 4021 must make a premium filing each year. The due dates are described in the “When to File” section. Electronic filing is mandatory for all plans.
My Plan Administration Account (My PAA) is a secure web-based application that enables pension plan professionals to electronically submit premium filings to PBGC in accordance with PBGC’s regulations. Electronic filings may be prepared using My PAA’s data entry screens or with compatible private-sector software. See “How to File” section for more information. For more information on e-filing options, see Appendix 3.
This document provides information for plans paying premiums for plan years beginning in 2023, including instructions for each data element that must be reported. Plan years beginning before 2023 If you are filing for a previous year or amending a filing for a previous year, you must follow the instructions for that year (available from the “Premium Filing” web page). However, because contact information and information about electronic funds transfers change periodically, the most recent information should be used instead of the information included in an instruction booklet for a prior plan year.
Defined terms Appendix 1 provides definitions for terminology used in this document. In general, the defined terms are capitalized to signal the reader to refer to Appendix 1 for more information. The convention of capitalizing the defined terms is not followed for a few defined terms such as “participant,” “we,” “you,” and “your.” In addition, this convention is not followed on the illustrative form (i.e., in the “Data to be Submitted” section).
What’s New
The filing requirements for 2023 are almost identical to the filing requirements for 2022. Here are the key changes to note for 2023:
§ Changes in premium rates:
– Single-employer plans other than CSEC plans: The Flat-rate Premium is $96 per-participant, up from $88. The Variable-rate Premium is $52 per $1,000 of unfunded vested benefits capped at $652 times the number of Participants, up from $48 per $1,000 of unfunded vested benefits capped at $598 times the number of Participants.
– Multiemployer Plans: The Flat-rate Premium is $35 per-participant, up from $32. Multiemployer plans do not pay Variable-rate Premiums. Premium rates for CSEC plans are not indexed, and thus those rates have not changed.
§ The Premium Customer Service email address has changed from premiums@pbgc.gov to pbgc_premiums@custhelp.com. Emails sent to the old address will be forwarded to the new mailbox.
See the Instructions for details. They Instructions may be found at: https://www.pbgc.gov/sites/default/files/documents/2023-premium-payment-instructions.pdf
Employee Benefits- IRS Issues Notice for The Insured and Self-Insured Health Plans Adjusted Applicable Dollar Amount for Fee Imposed by Sections 4375 and 4376 (Posted 12/13/2022)
The IRS says the following is the purpose of Notice 2022-59:
This notice provides the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of calculating the fee imposed by sections 4375 and 4376 of the Internal Revenue Code for policy years and plan years that end on or after October 1, 2022, and before October 1, 2023.
See the Notice for details. It may be found at: https://www.irs.gov/pub/irs-drop/n-22-59.pdf
The IRS says the following is the purpose of Notice 2022-59:
This notice provides the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of calculating the fee imposed by sections 4375 and 4376 of the Internal Revenue Code for policy years and plan years that end on or after October 1, 2022, and before October 1, 2023.
See the Notice for details. It may be found at: https://www.irs.gov/pub/irs-drop/n-22-59.pdf
Employee Benefits-First Circuit Denies Claim For Benefits But Remands Case To Allow Plaintiff To Present Her Claim For Breach Of ERISA Fiduciary Duty (Posted 12/12/2022)
In Shields v. United of Omaha Life Insurance Co., No. 21-1290 (1st Cir. 10/4/2022), the First Circuit Court of Appeals says the following:
In 2019, Lorna Shields, the beneficiary of the life insurance policy that her late husband, Myron Shields, acquired through his employer, Duramax Marine, LLC ("Duramax"), filed suit in the U.S. District Court for the District of Maine against United of Omaha Life Insurance Company ("United"). Her complaint sets forth one claim for recovery of plan benefits under 29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement and Investment Security Act ("ERISA") and one claim for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3) of that same statute. The District Court granted summary judgment for United on both claims and denied Lorna's motion for summary judgment on those same claims. She now appeals. We affirm the District Court's summary judgment rulings with respect to the recovery-of-plan-benefits claim. But, as to the breach-of-fiduciary-duty claim, we vacate the District Court's denial of Lorna's motion for summary judgment as well as its grant of United's motion for summary judgment and remand for further proceedings.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca1/21-1290/21-1290-2022-10-04.pdf?ts=1667423830
In Shields v. United of Omaha Life Insurance Co., No. 21-1290 (1st Cir. 10/4/2022), the First Circuit Court of Appeals says the following:
In 2019, Lorna Shields, the beneficiary of the life insurance policy that her late husband, Myron Shields, acquired through his employer, Duramax Marine, LLC ("Duramax"), filed suit in the U.S. District Court for the District of Maine against United of Omaha Life Insurance Company ("United"). Her complaint sets forth one claim for recovery of plan benefits under 29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement and Investment Security Act ("ERISA") and one claim for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3) of that same statute. The District Court granted summary judgment for United on both claims and denied Lorna's motion for summary judgment on those same claims. She now appeals. We affirm the District Court's summary judgment rulings with respect to the recovery-of-plan-benefits claim. But, as to the breach-of-fiduciary-duty claim, we vacate the District Court's denial of Lorna's motion for summary judgment as well as its grant of United's motion for summary judgment and remand for further proceedings.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca1/21-1290/21-1290-2022-10-04.pdf?ts=1667423830
Employee Benefits-Ninth Circuit Rules On Calculation Of Withdrawal Liability (Posted 12/10/2022)
The case of GCIU-Employer Retirement Fund v. MNG Enterprises, Nos.21-55864 and 21-55923 (9th Cir. 10/28/2022) is summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed in part and vacated in part the district court’s order affirming, except for a typographical error, an arbitrator’s award regarding the withdrawal liability, under the Multiemployer Pension Plan Amendments Act of 1980, of MNG Enterprises, following MNG’s complete withdrawal from GCIU-Employer Retirement Fund, a multiemployer pension plan.
GCIU’s actuary calculated MNG’s withdrawal liability using an interest rate published by the Pension Benefit Guaranty Corporation (PBGC). The actuary also accounted for the contribution histories of two newspapers that MNG had acquired several years before its complete withdrawal. On MNG’s challenge, the arbitrator found (1) that MNG could not be assessed partial withdrawal liability following a complete withdrawal, (2) that it had shown the interest rate used was not the best estimate of the plan’s experience, and (3) that GCIU properly considered the newspapers’ contribution histories because MNG was a successor to them.
Under the MPPAA, withdrawal liability covers the employer’s proportionate share of the plan’s unfunded vested benefits, calculated as the difference between the present value of the vested benefits and the current value of the plan’s assets. When an employer sells its assets and withdraws from the pension plan, it ordinarily incurs liability for a complete withdrawal. The obligation to pay that liability usually remains with the selling employer, but courts have equitable discretion to hold the purchaser responsible. If a dispute arises as to the amount of withdrawal liability, arbitration is required. MNG included two smaller controlled groups, MediaNews Group and California Newspaper Partnership Controlled Group. In 2013, California Newspaper completely withdrew from GCIU.
In 2014, MediaNews did the same, ending MNG’s contributions to GCIU. In 2018, GCIU assessed against MediaNews a 2014 complete withdrawal and two subsequent partial withdrawals for 2014 and 2015. In 2006 and 2007, MediaNews and California Newspaper had acquired the assets of two newspapers, the Torrance Daily Breeze and the Santa Cruz Sentinel, which had participated in GCIU but stopped contributing before MNG acquired them. Nothing in the record suggested that GCIU assessed withdrawal liability against the newspapers when they withdrew.
Affirming in part, the Panel held that, under the unambiguous text of the MPPAA, a partial withdrawal cannot occur after a complete withdrawal when the employer has not otherwise resumed operations or contributions. Thus, GCIU could not assess MNG for two partial withdrawals following its complete withdrawal. The Panel held that the MPPAA directs the plan actuary to determine withdrawal liability based on “actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” The Panel held that the GCIU actuary’s use of the PBGC rate, without considering the “experience of the plan and reasonable expectations,” did not satisfy the “best estimate” standard.
Vacating in part as to the inclusion of the newspapers’ contribution histories, the Panel held that if a purchaser is a successor and has notice of the withdrawal liability, then a court may use its equitable discretion to hold the purchaser liable. The district court concluded that MediaNews and California Newspaper were successors to the Daily Breeze and the Sentinel and that both had notice of the potential liability. The Panel held that the district court abused its discretion by not considering MNG’s possible successor liability as of the asset sale dates in 2006 and 2007. The Panel vacated and remanded for the district court to determine in the first instance whether MNG had successor liability and if GCIU correctly applied the newspapers’ contribution histories at the time of the asset sales.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2022/10/28/21-55864.pdf
The case of GCIU-Employer Retirement Fund v. MNG Enterprises, Nos.21-55864 and 21-55923 (9th Cir. 10/28/2022) is summarized as follows:
A panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed in part and vacated in part the district court’s order affirming, except for a typographical error, an arbitrator’s award regarding the withdrawal liability, under the Multiemployer Pension Plan Amendments Act of 1980, of MNG Enterprises, following MNG’s complete withdrawal from GCIU-Employer Retirement Fund, a multiemployer pension plan.
GCIU’s actuary calculated MNG’s withdrawal liability using an interest rate published by the Pension Benefit Guaranty Corporation (PBGC). The actuary also accounted for the contribution histories of two newspapers that MNG had acquired several years before its complete withdrawal. On MNG’s challenge, the arbitrator found (1) that MNG could not be assessed partial withdrawal liability following a complete withdrawal, (2) that it had shown the interest rate used was not the best estimate of the plan’s experience, and (3) that GCIU properly considered the newspapers’ contribution histories because MNG was a successor to them.
Under the MPPAA, withdrawal liability covers the employer’s proportionate share of the plan’s unfunded vested benefits, calculated as the difference between the present value of the vested benefits and the current value of the plan’s assets. When an employer sells its assets and withdraws from the pension plan, it ordinarily incurs liability for a complete withdrawal. The obligation to pay that liability usually remains with the selling employer, but courts have equitable discretion to hold the purchaser responsible. If a dispute arises as to the amount of withdrawal liability, arbitration is required. MNG included two smaller controlled groups, MediaNews Group and California Newspaper Partnership Controlled Group. In 2013, California Newspaper completely withdrew from GCIU.
In 2014, MediaNews did the same, ending MNG’s contributions to GCIU. In 2018, GCIU assessed against MediaNews a 2014 complete withdrawal and two subsequent partial withdrawals for 2014 and 2015. In 2006 and 2007, MediaNews and California Newspaper had acquired the assets of two newspapers, the Torrance Daily Breeze and the Santa Cruz Sentinel, which had participated in GCIU but stopped contributing before MNG acquired them. Nothing in the record suggested that GCIU assessed withdrawal liability against the newspapers when they withdrew.
Affirming in part, the Panel held that, under the unambiguous text of the MPPAA, a partial withdrawal cannot occur after a complete withdrawal when the employer has not otherwise resumed operations or contributions. Thus, GCIU could not assess MNG for two partial withdrawals following its complete withdrawal. The Panel held that the MPPAA directs the plan actuary to determine withdrawal liability based on “actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” The Panel held that the GCIU actuary’s use of the PBGC rate, without considering the “experience of the plan and reasonable expectations,” did not satisfy the “best estimate” standard.
Vacating in part as to the inclusion of the newspapers’ contribution histories, the Panel held that if a purchaser is a successor and has notice of the withdrawal liability, then a court may use its equitable discretion to hold the purchaser liable. The district court concluded that MediaNews and California Newspaper were successors to the Daily Breeze and the Sentinel and that both had notice of the potential liability. The Panel held that the district court abused its discretion by not considering MNG’s possible successor liability as of the asset sale dates in 2006 and 2007. The Panel vacated and remanded for the district court to determine in the first instance whether MNG had successor liability and if GCIU correctly applied the newspapers’ contribution histories at the time of the asset sales.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/opinions/2022/10/28/21-55864.pdf
Employee Benefits-Eighth Circuit Upholds Insurer’s Denial Of Disability Benefits Based On A Policy Exclusion For Voluntary Ingestion Of A Prescribed Substance (Posted 12/9/2022)
In Richmond v. Life Ins. Co. of N. Am., No. 21-3929 (8th Cir. Oct. 18, 2022), the Eighth Circuit Court of Appeals says the following:
Jay Richmond sought accidental death benefits under an employee benefit plan governed by the Employee Retirement Income and Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., after his wife, Marie Richmond, died from injecting herself with a cocktail of unprescribed narcotics.
The district court upheld the Life Insurance Company of North America’s (LINA) decision to deny benefits based on a policy exclusion for the “voluntary ingestion of any narcotic, drug, poison, gas or fumes, unless prescribed or taken under the direction of a Physician.” Richmond appeals, contending that the district court erred because LINA’s decision was unreasonable and not supported by substantial evidence. Having jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/10/213929P.pdf
In Richmond v. Life Ins. Co. of N. Am., No. 21-3929 (8th Cir. Oct. 18, 2022), the Eighth Circuit Court of Appeals says the following:
Jay Richmond sought accidental death benefits under an employee benefit plan governed by the Employee Retirement Income and Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., after his wife, Marie Richmond, died from injecting herself with a cocktail of unprescribed narcotics.
The district court upheld the Life Insurance Company of North America’s (LINA) decision to deny benefits based on a policy exclusion for the “voluntary ingestion of any narcotic, drug, poison, gas or fumes, unless prescribed or taken under the direction of a Physician.” Richmond appeals, contending that the district court erred because LINA’s decision was unreasonable and not supported by substantial evidence. Having jurisdiction under 28 U.S.C. § 1291, we affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/10/213929P.pdf
ERISA-Tenth Circuit Finds That Retaliation In Violation Of The FMLA Did Not Occur Against Plaintiff (Posted 12/8/2022)
In Parker v. United Airlines, Inc., No. 21-4093 (10th Cir. 9/26/2022), the Tenth Circuit Court of Appeals says the following:
This case involves provisions of the Family and Medical Leave Act (FMLA), 29 U.S.C. §§ 2601–54. This statute prohibits employers from retaliating against employees for taking FMLA leave. 29 U.S.C. § 2615(a)(2). We may assume for the sake of argument that the prohibition would ordinarily apply when an employer adopts an immediate supervisor’s recommendation to fire an employee for taking FMLA leave. With that assumption, we must decide whether the prohibition would apply when the employee obtains consideration by independent decisionmakers.
We answer no. Retaliation entails a causal link between an employee’s use of FMLA leave and the firing. That causal link is broken when an independent decisionmaker conducts her own investigation and decides to fire the employee.
The case may be found at: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110744428.pdf
In Parker v. United Airlines, Inc., No. 21-4093 (10th Cir. 9/26/2022), the Tenth Circuit Court of Appeals says the following:
This case involves provisions of the Family and Medical Leave Act (FMLA), 29 U.S.C. §§ 2601–54. This statute prohibits employers from retaliating against employees for taking FMLA leave. 29 U.S.C. § 2615(a)(2). We may assume for the sake of argument that the prohibition would ordinarily apply when an employer adopts an immediate supervisor’s recommendation to fire an employee for taking FMLA leave. With that assumption, we must decide whether the prohibition would apply when the employee obtains consideration by independent decisionmakers.
We answer no. Retaliation entails a causal link between an employee’s use of FMLA leave and the firing. That causal link is broken when an independent decisionmaker conducts her own investigation and decides to fire the employee.
The case may be found at: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110744428.pdf
ERISA-Eighth Circuit Finds That Plaintiffs Did Not State Better Investment Alternatives Than Those Complained Of (Posted 12/7/2022)
In Matousek v. MidAmerican Energy Co., No. 21-2749 (8th Cir. 10/12/2022), the Eighth Circuit Court of Appeals says the following:
Like many companies, MidAmerican offers a retirement plan to its employees. Some thought it saddled them with unreasonably high costs and low quality investments. In their complaint, however, they failed to identify better alternatives, so we affirm the district court’s decision to dismiss.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/10/212749P.pdf
In Matousek v. MidAmerican Energy Co., No. 21-2749 (8th Cir. 10/12/2022), the Eighth Circuit Court of Appeals says the following:
Like many companies, MidAmerican offers a retirement plan to its employees. Some thought it saddled them with unreasonably high costs and low quality investments. In their complaint, however, they failed to identify better alternatives, so we affirm the district court’s decision to dismiss.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/10/212749P.pdf
Employee Benefits-IRS Issues Revised (October, 2022) Publication 5137, Fringe Benefit Guide (Posted 12/6/2022)
The Revised Publication 5137 may be found at: https://www.irs.gov/pub/irs-pdf/p5137.pdf
The Revised Publication 5137 may be found at: https://www.irs.gov/pub/irs-pdf/p5137.pdf
Employee Benefits-IRS Issues Text Of 2022 IRS Forms 1095-B (Health Coverage) and 1095-C (Employer-Provided Health Insurance Offer and Coverage) (Posted 12/5/2022)
Text of 2022 Form 1095 may be found at: https://www.irs.gov/pub/irs-prior/f1095b--2022.pdf
Text of 2022 Form 1095-C may be found at: https://www.irs.gov/pub/irs-prior/f1095b--2022.pdf
Text of 2022 Form 1095 may be found at: https://www.irs.gov/pub/irs-prior/f1095b--2022.pdf
Text of 2022 Form 1095-C may be found at: https://www.irs.gov/pub/irs-prior/f1095b--2022.pdf
ERISA-Eight Circuit Upholds Dismissal Of ERISA Cases When Plaintiff’s Failed To Identify Better Fee Alternatives In Their Complaint (Posted 12/3/2022)
In Daniel Matousek v. MidAmerican Energy Company, No. 21-2749 (8th Cir. 10/12/2022), the Eighth Circuit Court of Appeals says the following:
Like many companies, MidAmerican offers a retirement plan to its employees. Some thought it saddled them with unreasonably high costs and low quality investments. In their complaint, however, they failed to identify better alternatives, so we affirm the district court’s decision to dismiss.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca8/21-2749/21-2749-2022-10-12.pdf?ts=1665588645
In Daniel Matousek v. MidAmerican Energy Company, No. 21-2749 (8th Cir. 10/12/2022), the Eighth Circuit Court of Appeals says the following:
Like many companies, MidAmerican offers a retirement plan to its employees. Some thought it saddled them with unreasonably high costs and low quality investments. In their complaint, however, they failed to identify better alternatives, so we affirm the district court’s decision to dismiss.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca8/21-2749/21-2749-2022-10-12.pdf?ts=1665588645
ERISA-Sixth Circuit Rule That Plaintiff Is Not Entitled To Long-Term Disability Benefits (Posted 12/2/2022)
In Eberle v. Am. Elec. Power Sys. Long-Term Disability Plan, No. 21-4224 (6th Cir. Oct. 7, 2022), the Sixth Circuit Court of Appeals says the following:
Plaintiff Diane Eberle contends she was wrongfully denied long-term disability benefits to which she was entitled, in violation of ERISA. The Plan’s claims administrator, Prudential Insurance Company of America, denied Eberle benefits because she did not offer the necessary objective medical evidence demonstrating that her lower-back pain rendered her unable to perform “any occupation.” The district court granted judgment in the Plan’s favor, holding Prudential’s decision was not arbitrary and capricious. We affirm.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0398n-06.pdf
In Eberle v. Am. Elec. Power Sys. Long-Term Disability Plan, No. 21-4224 (6th Cir. Oct. 7, 2022), the Sixth Circuit Court of Appeals says the following:
Plaintiff Diane Eberle contends she was wrongfully denied long-term disability benefits to which she was entitled, in violation of ERISA. The Plan’s claims administrator, Prudential Insurance Company of America, denied Eberle benefits because she did not offer the necessary objective medical evidence demonstrating that her lower-back pain rendered her unable to perform “any occupation.” The district court granted judgment in the Plan’s favor, holding Prudential’s decision was not arbitrary and capricious. We affirm.
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0398n-06.pdf
Employee Benefits-First Circuit Dismisses Claim For Plan Benefits But Remands Claim Of ERISA Breach-Of-Fiduciary Duty (Posted 12/1/2022)
In Shields v. United of Omaha Life Ins. Co., No. 21-1290 (1st Cir. Oct. 4, 2022), the First Circuit Court of Appeals says the following:
In 2019, Lorna Shields, the beneficiary of the life insurance policy that her late husband, Myron Shields, acquired through his employer, Duramax Marine, LLC ("Duramax"), filed suit in the U.S. District Court for the District of Maine against United of Omaha Life Insurance Company ("United"). Her complaint sets forth one claim for recovery of plan benefits under 29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement and Investment Security Act ("ERISA") and one claim for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3) of that same statute. The District Court granted summary judgment for United on both claims and denied Lorna's motion for summary judgment on those same claims. She now appeals.
We affirm the District Court's summary judgment rulings with respect to the recovery-of-plan-benefits claim. But, as to the breach-of-fiduciary-duty claim, we vacate the District Court's denial of Lorna's motion for summary judgment as well as its grant of United's motion for summary judgment and remand for further proceedings.
The case may be found at: http://media.ca1.uscourts.gov/pdf.opinions/21-1290P-01A.pdf
In Shields v. United of Omaha Life Ins. Co., No. 21-1290 (1st Cir. Oct. 4, 2022), the First Circuit Court of Appeals says the following:
In 2019, Lorna Shields, the beneficiary of the life insurance policy that her late husband, Myron Shields, acquired through his employer, Duramax Marine, LLC ("Duramax"), filed suit in the U.S. District Court for the District of Maine against United of Omaha Life Insurance Company ("United"). Her complaint sets forth one claim for recovery of plan benefits under 29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement and Investment Security Act ("ERISA") and one claim for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3) of that same statute. The District Court granted summary judgment for United on both claims and denied Lorna's motion for summary judgment on those same claims. She now appeals.
We affirm the District Court's summary judgment rulings with respect to the recovery-of-plan-benefits claim. But, as to the breach-of-fiduciary-duty claim, we vacate the District Court's denial of Lorna's motion for summary judgment as well as its grant of United's motion for summary judgment and remand for further proceedings.
The case may be found at: http://media.ca1.uscourts.gov/pdf.opinions/21-1290P-01A.pdf
Employee Benefits-IRS Issues 2023 Form 5498, IRA Contribution Information (Posted 11/30/2022)
The Form may be found at: https://www.irs.gov/pub/irs-prior/f5498--2023.pdf
The Form may be found at: https://www.irs.gov/pub/irs-prior/f5498--2023.pdf
Employee Benefits-IRS Issues 2023 Form 5498-SA And 2023 Instructions For Forms 1099-SA And 5498-SA (Posted 11/29/2022)
The Form 5498-SA may be found here: https://www.irs.gov/pub/irs-prior/f5498sa--2023.pdf
The above Instructions may be found here: https://www.irs.gov/pub/irs-prior/i1099sa--2023.pdf
The Forms 5498-SA and 1099-SA are used for reporting distributions from an HSA, Archer MSA, or Medicare Advantage MSA, and for reporting other information on an HSA, Archer MSA, or Medicare Advantage MSA
The Form 5498-SA may be found here: https://www.irs.gov/pub/irs-prior/f5498sa--2023.pdf
The above Instructions may be found here: https://www.irs.gov/pub/irs-prior/i1099sa--2023.pdf
The Forms 5498-SA and 1099-SA are used for reporting distributions from an HSA, Archer MSA, or Medicare Advantage MSA, and for reporting other information on an HSA, Archer MSA, or Medicare Advantage MSA
Employee Benefits-Tenth Circuit Affirms Termination of Long Term Disability Benefits (Posted 11/28/2022)
In Gielissen v. Reliance Standard Life Ins. Co., No. 21-1377 (10th Cir. Oct. 7, 2022), the Tenth Circuit Court of Appeals says the following:
Reliance Standard Life Insurance Company, acting through its claims administrator, Matrix Absence Management, Inc., terminated Dana Gielissen’s longterm disability benefits after concluding that she no longer qualified for them. Gielissen’s disability benefits are governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001–1461, so she filed suit in federal district court challenging that termination, see id. § 1132(a)(1)(B). The district court entered judgment in favor of Reliance Standard, and Gielissen now appeals. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
The case may be found at: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110750325.pdf
In Gielissen v. Reliance Standard Life Ins. Co., No. 21-1377 (10th Cir. Oct. 7, 2022), the Tenth Circuit Court of Appeals says the following:
Reliance Standard Life Insurance Company, acting through its claims administrator, Matrix Absence Management, Inc., terminated Dana Gielissen’s longterm disability benefits after concluding that she no longer qualified for them. Gielissen’s disability benefits are governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001–1461, so she filed suit in federal district court challenging that termination, see id. § 1132(a)(1)(B). The district court entered judgment in favor of Reliance Standard, and Gielissen now appeals. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
The case may be found at: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010110750325.pdf
Employment-Fourth Circuit Rules On Retaliatory-Discharge FMLA And Common Law Claims (Posted 11/26/2022)
In Roberts v. Gestamp West Virginia, LLC, No. 20-2202 (4th Cir. Aug. 15, 2022), the Fourth Circuit Court of Appeals says the following:
Kasey Roberts appeals the district court’s grant of summary judgment to his former employer, Gestamp West Virginia, LLC, on his Family & Medical Leave Act (“FMLA”) and common law retaliatory-discharge claims. Gestamp fired Roberts after he missed work due to a recurring infection from an emergency appendectomy. The district court granted Gestamp’s summary judgment motion because Roberts, it said, didn’t comply with the company’s “usual and customary” absentee notice procedures, as the FMLA requires. 29 C.F.R. § 825.303(c). And Roberts’s common law claims failed because he hadn’t shown an FMLA violation.
On appeal, Roberts contends the district court erred because, through his dealings with Gestamp, the company’s “usual and customary” notice procedures for leaves of absence expanded beyond those in its written policy. And Roberts argues that he complied with his FMLA obligations by notifying Gestamp of his absences over Facebook Messenger, which the company had previously accepted. We agree with Roberts’s reading of the FMLA regulations and find that he’s raised a jury question on whether using Facebook Messenger satisfied the Act’s requirements. But Gestamp counters that even if Roberts’s initial notice were adequate, he neglected his FMLA obligation to update the company on the duration of his absence, defeating his FMLA-interference claim. On this too, Roberts has raised a material factual dispute to survive summary judgment. So we vacate the district court’s judgment on his interference claim and remand.
The case may be found at: https://www.ca4.uscourts.gov/opinions/202202.p.pdf
In Roberts v. Gestamp West Virginia, LLC, No. 20-2202 (4th Cir. Aug. 15, 2022), the Fourth Circuit Court of Appeals says the following:
Kasey Roberts appeals the district court’s grant of summary judgment to his former employer, Gestamp West Virginia, LLC, on his Family & Medical Leave Act (“FMLA”) and common law retaliatory-discharge claims. Gestamp fired Roberts after he missed work due to a recurring infection from an emergency appendectomy. The district court granted Gestamp’s summary judgment motion because Roberts, it said, didn’t comply with the company’s “usual and customary” absentee notice procedures, as the FMLA requires. 29 C.F.R. § 825.303(c). And Roberts’s common law claims failed because he hadn’t shown an FMLA violation.
On appeal, Roberts contends the district court erred because, through his dealings with Gestamp, the company’s “usual and customary” notice procedures for leaves of absence expanded beyond those in its written policy. And Roberts argues that he complied with his FMLA obligations by notifying Gestamp of his absences over Facebook Messenger, which the company had previously accepted. We agree with Roberts’s reading of the FMLA regulations and find that he’s raised a jury question on whether using Facebook Messenger satisfied the Act’s requirements. But Gestamp counters that even if Roberts’s initial notice were adequate, he neglected his FMLA obligation to update the company on the duration of his absence, defeating his FMLA-interference claim. On this too, Roberts has raised a material factual dispute to survive summary judgment. So we vacate the district court’s judgment on his interference claim and remand.
The case may be found at: https://www.ca4.uscourts.gov/opinions/202202.p.pdf
ERISA-Seventh Circuit Upholds Dismissal Of ERISA Stock Drop Case (Posted 11/25/2022)
In Burke v. The Boeing Company, No. 19-2203 (7th Cir. Aug. 1, 2022), the Seventh Circuit Court of Appeals says the following:
This appeal presents new variations on issues that often arise when the value of employer stock held by an employee stock ownership plan drops substantially. The Employee Retirement Income Security Act (ERISA) allows company insiders to serve as fiduciaries of employee benefit plans, so that they owe fiduciary duties both to plan participants and to the company. See Pub. L. No. 93- 406, 88 Stat. 829 (1974) (codified in various sections of 29 U.S.C.); see also 29 U.S.C. § 1108(c)(3); Halperin v. Richards, 7 F.4th 534, 542 (7th Cir. 2021). Such insiders also have obligations to all shareholders under securities laws.
For decades, employees unhappy about dropping stock values in employee stock ownership plans have tried to use ERISA to obtain relief from the ERISA fiduciaries and their employers. At the foundation of the early efforts was a theory that when an employer’s business ran into serious trouble that would cause the stock value to drop, company insiders with fiduciary duties under ERISA were obliged to use inside information about those troubles for the benefit of employee shareholders at the (implicit) expense of other shareholders. That theory would conflict directly with federal securities laws. The Supreme Court made clear in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014), that ERISA does not require fiduciaries to violate securities laws on insider trading. In trying to reconcile ERISA and federal securities laws, however, Dudenhoeffer left open at least a theoretical possibility for employees to seek relief under ERISA on a theory that plan fiduciaries had a duty to disclose bad news to everyone. Yet as part of the balance between ERISA and securities law, Dudenhoeffer imposed demanding pleading standards for such claims, requiring plaintiffs to plausibly allege an alternative action the defendant could have taken that would have been consistent with securities law and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the employee stock ownership fund than to help it. 573 U.S. at 428.
Since Dudenhoeffer, plaintiffs in ERISA stock-drop cases have been trying to satisfy, limit, or avoid those pleading standards. This court and others have long responded to ERISA fiduciaries’ sometimes-conflicting interests by suggesting that the conflicted fiduciaries step aside in favor of new, independent fiduciaries who can focus exclusively on the interests of ERISA plan participants and beneficiaries. E.g., Leigh v. Engle, 727 F.2d 113, 125 (7th Cir. 1984); Donovan v. Bierwirth, 680 F.2d 263, 271−72 (2d Cir. 1982). Many years ago, The Boeing Company adopted that approach for its employee stock ownership plan, also known as an “ESOP.” Boeing plan fiduciaries delegated to an independent outside fiduciary the selection and management of investment options for the ESOP. The central question here is whether the delegation of those investment responsibilities protects the company and company insiders from liability for the plan’s continued offering of Boeing stock as an investment option for employees before and during a time when the value of Boeing stock dropped significantly. The drop occurred after two fatal crashes of new Boeing 737 MAX airliners led to a worldwide grounding of those planes and a halt to production. We agree with the district court that the delegation of investment decisions to an independent fiduciary means that neither Boeing nor the other defendants acted in an ERISA fiduciary capacity in connection with the continued investments in Boeing stock. We affirm the district court’s dismissal of the action.
The case may be found at: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2022/D08-01/C:20-3389:J:Hamilton:aut:T:fnOp:N:2911081:S:0
In Burke v. The Boeing Company, No. 19-2203 (7th Cir. Aug. 1, 2022), the Seventh Circuit Court of Appeals says the following:
This appeal presents new variations on issues that often arise when the value of employer stock held by an employee stock ownership plan drops substantially. The Employee Retirement Income Security Act (ERISA) allows company insiders to serve as fiduciaries of employee benefit plans, so that they owe fiduciary duties both to plan participants and to the company. See Pub. L. No. 93- 406, 88 Stat. 829 (1974) (codified in various sections of 29 U.S.C.); see also 29 U.S.C. § 1108(c)(3); Halperin v. Richards, 7 F.4th 534, 542 (7th Cir. 2021). Such insiders also have obligations to all shareholders under securities laws.
For decades, employees unhappy about dropping stock values in employee stock ownership plans have tried to use ERISA to obtain relief from the ERISA fiduciaries and their employers. At the foundation of the early efforts was a theory that when an employer’s business ran into serious trouble that would cause the stock value to drop, company insiders with fiduciary duties under ERISA were obliged to use inside information about those troubles for the benefit of employee shareholders at the (implicit) expense of other shareholders. That theory would conflict directly with federal securities laws. The Supreme Court made clear in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014), that ERISA does not require fiduciaries to violate securities laws on insider trading. In trying to reconcile ERISA and federal securities laws, however, Dudenhoeffer left open at least a theoretical possibility for employees to seek relief under ERISA on a theory that plan fiduciaries had a duty to disclose bad news to everyone. Yet as part of the balance between ERISA and securities law, Dudenhoeffer imposed demanding pleading standards for such claims, requiring plaintiffs to plausibly allege an alternative action the defendant could have taken that would have been consistent with securities law and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the employee stock ownership fund than to help it. 573 U.S. at 428.
Since Dudenhoeffer, plaintiffs in ERISA stock-drop cases have been trying to satisfy, limit, or avoid those pleading standards. This court and others have long responded to ERISA fiduciaries’ sometimes-conflicting interests by suggesting that the conflicted fiduciaries step aside in favor of new, independent fiduciaries who can focus exclusively on the interests of ERISA plan participants and beneficiaries. E.g., Leigh v. Engle, 727 F.2d 113, 125 (7th Cir. 1984); Donovan v. Bierwirth, 680 F.2d 263, 271−72 (2d Cir. 1982). Many years ago, The Boeing Company adopted that approach for its employee stock ownership plan, also known as an “ESOP.” Boeing plan fiduciaries delegated to an independent outside fiduciary the selection and management of investment options for the ESOP. The central question here is whether the delegation of those investment responsibilities protects the company and company insiders from liability for the plan’s continued offering of Boeing stock as an investment option for employees before and during a time when the value of Boeing stock dropped significantly. The drop occurred after two fatal crashes of new Boeing 737 MAX airliners led to a worldwide grounding of those planes and a halt to production. We agree with the district court that the delegation of investment decisions to an independent fiduciary means that neither Boeing nor the other defendants acted in an ERISA fiduciary capacity in connection with the continued investments in Boeing stock. We affirm the district court’s dismissal of the action.
The case may be found at: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2022/D08-01/C:20-3389:J:Hamilton:aut:T:fnOp:N:2911081:S:0
Employee Benefits-IRS Issues Text Of Instructions For The 2022 Form 1095-A- Health Insurance Marketplace Statement (Posted 11/23/2022)
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/f1095a--2022.pdf
The Instructions may be found here: https://www.irs.gov/pub/irs-prior/f1095a--2022.pdf
Employee Benefits-IRS Issues New Employee Plans News (Posted 11/22/2022)
The Employee Plans News, dated 9/29/2022, contains, among other things, the following:
Chat Questions: We received several questions in the chat feature in the booth and during the presentation. Following are answers to some of the most common questions.
1) The plan sponsor is responsible for all things having to do with the plan, from determining when employees enter the plan, to distributions, to filing the Form 5500 series returns.
If you purchase or set up a plan with a financial institution or hire an advisor to help with your plan, make sure you understand exactly what they're going to do for you. In the end, the plan sponsor is responsible for administering the plan.
2) SEP, SIMPLE, and SARSEP IRA-based plans do not file a Form 5500 series return.
3) A one-participant 401(k) plan can allow for both pre-tax salary deferrals and after-tax Roth salary deferrals, but the plan document must include language for both.
4) Contributions made to a Roth IRA are not affected by amounts contributed to a Roth 401(k) plan.
5) In a SEP IRA plan, all eligible employees (including the owner) must receive the same percentage of any contribution made to the SEP.
6) Deductions for contributions to your traditional IRA may be limited if you or your spouse is covered by a workplace retirement plan. Contributions to your IRA don't affect (and are not affected by) contributions in a workplace retirement plan.
The Employee Plans News may be found at: https://benefitslink.com/src/irs/irs-employee-plans-news-september-2022.html
The Employee Plans News, dated 9/29/2022, contains, among other things, the following:
Chat Questions: We received several questions in the chat feature in the booth and during the presentation. Following are answers to some of the most common questions.
1) The plan sponsor is responsible for all things having to do with the plan, from determining when employees enter the plan, to distributions, to filing the Form 5500 series returns.
If you purchase or set up a plan with a financial institution or hire an advisor to help with your plan, make sure you understand exactly what they're going to do for you. In the end, the plan sponsor is responsible for administering the plan.
2) SEP, SIMPLE, and SARSEP IRA-based plans do not file a Form 5500 series return.
3) A one-participant 401(k) plan can allow for both pre-tax salary deferrals and after-tax Roth salary deferrals, but the plan document must include language for both.
4) Contributions made to a Roth IRA are not affected by amounts contributed to a Roth 401(k) plan.
- Contributions you make to a Roth IRA are limited based on your filing status and income. Roth 401(k) deferrals do not affect amounts you can contribute to a Roth IRA. Limits for 2022:
- $6,000
- Plus $1,000 age 50 catch-up
- Amounts an individual contributes in a Roth 401(k) plan are limited by IRC 402(g). Roth IRA contributions do not affect amounts you can defer in a Roth 401(k) plan. Limits for 2022:
- $20,500
- Plus $6,500 age 50 catch-up
5) In a SEP IRA plan, all eligible employees (including the owner) must receive the same percentage of any contribution made to the SEP.
6) Deductions for contributions to your traditional IRA may be limited if you or your spouse is covered by a workplace retirement plan. Contributions to your IRA don't affect (and are not affected by) contributions in a workplace retirement plan.
The Employee Plans News may be found at: https://benefitslink.com/src/irs/irs-employee-plans-news-september-2022.html
ERISA-Ninth Circuit Overturns District Court’s Approval Of Insurer’s Termination Of Long Term Disability Benefits (Posted 11/21/2022)
In Kay v. Hartford Life and Accident Ins. Co., No. 21-55463 (9th Cir. Sept. 21, 2022) (Unpublished), the Ninth Circuit Court of Appeals says the following:
Appellant Anne Kay (“Kay”) was employed as a Clinical Specialist for Candela Corporation, a cosmetic dermatology practice in San Diego, California. Through Candela, Kay was covered for long-term disability under an ERISA-backed policy administered by Appellee Hartford Life and Accident Insurance Company. (“Hartford”). Kay stopped working in August 2015 due to escalating back pain. Subsequently, she applied for and received disability benefits under Candela’s long term disability plan (the “Hartford Plan”). Hartford terminated her benefits in July 2016 and upheld its termination in an administrative appeal. Kay now appeals a district court decision upholding Hartford’s termination of her benefits and the district court’s denial of her motion to augment the administrative record. We have jurisdiction under 28 U.S.C. § 1291, and we reverse and remand.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/memoranda/2022/09/21/21-55463.pdf
In Kay v. Hartford Life and Accident Ins. Co., No. 21-55463 (9th Cir. Sept. 21, 2022) (Unpublished), the Ninth Circuit Court of Appeals says the following:
Appellant Anne Kay (“Kay”) was employed as a Clinical Specialist for Candela Corporation, a cosmetic dermatology practice in San Diego, California. Through Candela, Kay was covered for long-term disability under an ERISA-backed policy administered by Appellee Hartford Life and Accident Insurance Company. (“Hartford”). Kay stopped working in August 2015 due to escalating back pain. Subsequently, she applied for and received disability benefits under Candela’s long term disability plan (the “Hartford Plan”). Hartford terminated her benefits in July 2016 and upheld its termination in an administrative appeal. Kay now appeals a district court decision upholding Hartford’s termination of her benefits and the district court’s denial of her motion to augment the administrative record. We have jurisdiction under 28 U.S.C. § 1291, and we reverse and remand.
The case may be found at: https://cdn.ca9.uscourts.gov/datastore/memoranda/2022/09/21/21-55463.pdf
ERISA-Seventh Circuit Upholds The Subpoena Power Of The DOL (Posted 11/19/2022)
In Walsh v. Alight Solutions LLC, No. 21-3290 (7th Cir. Aug. 12, 2022), the Seventh Circuit Court of Appeals says the following:
The U.S. Department of Labor is investigating alleged cybersecurity breaches at Alight Solutions LLC, a company that provides administrative services for employers who sponsor healthcare and retirement plans. As part of its investigation the Department issued an administrative subpoena. Alight produced some documents but objected to many of the subpoena’s requests. The district court granted the Department’s petition to enforce the subpoena with some modifications.
On appeal, Alight argues the subpoena is unenforceable because the Department lacks authority to investigate the company, or cybersecurity incidents generally. The company also contends the subpoena’s demands are too indefinite and unduly burdensome, and that the district court abused its discretion by denying Alight’s request for a protective order to limit production of certain sensitive information. Alight’s arguments are not persuasive, so we affirm.
The case may be found at: https://www.govinfo.gov/content/pkg/USCOURTS-ca7-21-03290/pdf/USCOURTS-ca7-21-03290-0.pdf
In Walsh v. Alight Solutions LLC, No. 21-3290 (7th Cir. Aug. 12, 2022), the Seventh Circuit Court of Appeals says the following:
The U.S. Department of Labor is investigating alleged cybersecurity breaches at Alight Solutions LLC, a company that provides administrative services for employers who sponsor healthcare and retirement plans. As part of its investigation the Department issued an administrative subpoena. Alight produced some documents but objected to many of the subpoena’s requests. The district court granted the Department’s petition to enforce the subpoena with some modifications.
On appeal, Alight argues the subpoena is unenforceable because the Department lacks authority to investigate the company, or cybersecurity incidents generally. The company also contends the subpoena’s demands are too indefinite and unduly burdensome, and that the district court abused its discretion by denying Alight’s request for a protective order to limit production of certain sensitive information. Alight’s arguments are not persuasive, so we affirm.
The case may be found at: https://www.govinfo.gov/content/pkg/USCOURTS-ca7-21-03290/pdf/USCOURTS-ca7-21-03290-0.pdf
ERISA-District Court rules That The Plan In Question Is No longer A Church Plan (Posted 11/18/2020)
In Del Sesto v. Prospect CharterCare, No. 18-328 (D.R.I. Sept. 13, 2022), the District Court says the following:
The Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001–1461, “generally obligates private employers offering pension plans to adhere to an array of rules designed to ensure plan solvency and protect plan participants.” Advoc. Health Care Network v. Stapleton, 137 S. Ct. 1652, 1656 (2017). Churches, and some organizations affiliated with them, may be exempt from those rules if their retirement plan meets the statutory requirements to be considered a “church plan.” Id.; see also 29 U.S.C. § 1002(33).
The question before the Court today is narrow: did the defined-benefit pension plan at the center of this litigation, the St. Joseph Health Services of Rhode Island Retirement Plan (“the Plan”), stop qualifying as a church plan by April 29, 2013, at the very latest? The Court answers yes: by that date the Plan no longer qualified as a church plan because there was not a “Principal Purpose Organization” administering it, as required. See Stapleton, 137 S. Ct. 1652, 1656-57 (2017) (defining Principal Purpose Organization and explaining its significance in the ERISA, church-plan schema).
The case may be found at: https://benefitslink.com/src/ctop/del-sesto-v-prospect-chartercare-dri-09132022.pdf
In Del Sesto v. Prospect CharterCare, No. 18-328 (D.R.I. Sept. 13, 2022), the District Court says the following:
The Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001–1461, “generally obligates private employers offering pension plans to adhere to an array of rules designed to ensure plan solvency and protect plan participants.” Advoc. Health Care Network v. Stapleton, 137 S. Ct. 1652, 1656 (2017). Churches, and some organizations affiliated with them, may be exempt from those rules if their retirement plan meets the statutory requirements to be considered a “church plan.” Id.; see also 29 U.S.C. § 1002(33).
The question before the Court today is narrow: did the defined-benefit pension plan at the center of this litigation, the St. Joseph Health Services of Rhode Island Retirement Plan (“the Plan”), stop qualifying as a church plan by April 29, 2013, at the very latest? The Court answers yes: by that date the Plan no longer qualified as a church plan because there was not a “Principal Purpose Organization” administering it, as required. See Stapleton, 137 S. Ct. 1652, 1656-57 (2017) (defining Principal Purpose Organization and explaining its significance in the ERISA, church-plan schema).
The case may be found at: https://benefitslink.com/src/ctop/del-sesto-v-prospect-chartercare-dri-09132022.pdf
ERISA-Second Circuit Rules That The Multi-Employer Employee Benefit Fund Has The Right to Audit An Employer Under The Trust Agreement (Posted 11/17/2022)
In New York State Nurses Association Benefits Fund v. Nyack Hospital, No. 20-0378 (2nd Cir. Aug. 19, 2022), the Second Circuit Court of Appeals says the following:
This case concerns the scope of the audit authority of a multi-employer employee benefit fund covered by the Employee Retirement Income Security Act (“ERISA”). The New York State Nurses Association Benefit Fund (the “Fund”) sought an audit of the Nyack Hospital’s (the “Hospital’s”) payroll and wage records. The Hospital objected, claiming that the Fund had the authority to inspect only the payroll records of employees the Hospital identified as members of the collective bargaining unit. The district court (Briccetti, J.) held that the Fund was entitled to the records of all persons the Hospital identified as registered nurses but not to the records of any other employees.
We reverse in part and affirm in part. To the extent the district court granted the Hospital’s cross-motion for summary judgment and denied the Fund’s motion for summary judgment, we reverse. To the extent the district court granted the Fund’s motion for summary judgment and denied the Hospital’s cross-motion for summary judgment, we affirm. We hold that the audit sought by the Fund was authorized by the Trust Agreement, and that the Hospital did not present evidence that the audit constituted a breach of the Fund’s fiduciary duty under ERISA. Accordingly, the audit was within the scope of the Fund trustees’ authority under the Supreme Court’s decision in Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985).
The case may be found at: https://www.govinfo.gov/content/pkg/USCOURTS-ca2-20-00378/pdf/USCOURTS-ca2-20-00378-0.pdf
In New York State Nurses Association Benefits Fund v. Nyack Hospital, No. 20-0378 (2nd Cir. Aug. 19, 2022), the Second Circuit Court of Appeals says the following:
This case concerns the scope of the audit authority of a multi-employer employee benefit fund covered by the Employee Retirement Income Security Act (“ERISA”). The New York State Nurses Association Benefit Fund (the “Fund”) sought an audit of the Nyack Hospital’s (the “Hospital’s”) payroll and wage records. The Hospital objected, claiming that the Fund had the authority to inspect only the payroll records of employees the Hospital identified as members of the collective bargaining unit. The district court (Briccetti, J.) held that the Fund was entitled to the records of all persons the Hospital identified as registered nurses but not to the records of any other employees.
We reverse in part and affirm in part. To the extent the district court granted the Hospital’s cross-motion for summary judgment and denied the Fund’s motion for summary judgment, we reverse. To the extent the district court granted the Fund’s motion for summary judgment and denied the Hospital’s cross-motion for summary judgment, we affirm. We hold that the audit sought by the Fund was authorized by the Trust Agreement, and that the Hospital did not present evidence that the audit constituted a breach of the Fund’s fiduciary duty under ERISA. Accordingly, the audit was within the scope of the Fund trustees’ authority under the Supreme Court’s decision in Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985).
The case may be found at: https://www.govinfo.gov/content/pkg/USCOURTS-ca2-20-00378/pdf/USCOURTS-ca2-20-00378-0.pdf
Employee Benefits-Fourth Circuit Issues Rulings On Notification Procedures Under The FMLA (Posted 11/16/2022)
In Roberts v. Gestamp West Virginia, LLC, No. 20-2202 (4th Cir. Aug. 15, 2022), the Fourth Circuit Court of Appeals says the following:
Kasey Roberts appeals the district court’s grant of summary judgment to his former employer, Gestamp West Virginia, LLC, on his Family & Medical Leave Act (“FMLA”) and common law retaliatory-discharge claims. Gestamp fired Roberts after he missed work due to a recurring infection from an emergency appendectomy. The district court granted Gestamp’s summary judgment motion because Roberts, it said, didn’t comply with the company’s “usual and customary” absentee notice procedures, as the FMLA requires. 29 C.F.R. § 825.303(c). And Roberts’s common law claims failed because he hadn’t shown an FMLA violation.
On appeal, Roberts contends the district court erred because, through his dealings with Gestamp, the company’s “usual and customary” notice procedures for leaves of absence expanded beyond those in its written policy. And Roberts argues that he complied with his FMLA obligations by notifying Gestamp of his absences over Facebook Messenger, which the company had previously accepted. We agree with Roberts’s reading of the FMLA regulations and find that he’s raised a jury question on whether using Facebook Messenger satisfied the Act’s requirements.
But Gestamp counters that even if Roberts’s initial notice were adequate, he neglected his FMLA obligation to update the company on the duration of his absence, defeating his FMLA-interference claim. On this too, Roberts has raised a material factual dispute to survive summary judgment. So we vacate the district court’s judgment on his interference claim and remand.
The case may be found at: https://www.ca4.uscourts.gov/opinions/202202.p.pdf
In Roberts v. Gestamp West Virginia, LLC, No. 20-2202 (4th Cir. Aug. 15, 2022), the Fourth Circuit Court of Appeals says the following:
Kasey Roberts appeals the district court’s grant of summary judgment to his former employer, Gestamp West Virginia, LLC, on his Family & Medical Leave Act (“FMLA”) and common law retaliatory-discharge claims. Gestamp fired Roberts after he missed work due to a recurring infection from an emergency appendectomy. The district court granted Gestamp’s summary judgment motion because Roberts, it said, didn’t comply with the company’s “usual and customary” absentee notice procedures, as the FMLA requires. 29 C.F.R. § 825.303(c). And Roberts’s common law claims failed because he hadn’t shown an FMLA violation.
On appeal, Roberts contends the district court erred because, through his dealings with Gestamp, the company’s “usual and customary” notice procedures for leaves of absence expanded beyond those in its written policy. And Roberts argues that he complied with his FMLA obligations by notifying Gestamp of his absences over Facebook Messenger, which the company had previously accepted. We agree with Roberts’s reading of the FMLA regulations and find that he’s raised a jury question on whether using Facebook Messenger satisfied the Act’s requirements.
But Gestamp counters that even if Roberts’s initial notice were adequate, he neglected his FMLA obligation to update the company on the duration of his absence, defeating his FMLA-interference claim. On this too, Roberts has raised a material factual dispute to survive summary judgment. So we vacate the district court’s judgment on his interference claim and remand.
The case may be found at: https://www.ca4.uscourts.gov/opinions/202202.p.pdf
Employee Benefits-EBSA Issues Information Letter On Bonding Requirements For Pooled Employer Plans (Posted 11/15/2022)
Information Letter 09-07-2022 (found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/information-letters/09-07-2022) says the following:
William E. Heinbokel
Director of Fidelity and Regulatory Compliance
The Surety & Fidelity Association of America
1140 19th Street NW, Suite 500
Washington, DC 20036
Dear Mr. Heinbokel:
This letter responds to your request on behalf of the Surety & Fidelity Association of America (SFAA) for information regarding the bonding requirements under the Employee Retirement Income Security Act of 1974, as amended (ERISA) applicable to a pooled employer plan (PEP). You asked about the application of ERISA’s bonding requirements to employees of employers participating in a PEP who assist in collecting and transmitting participant contributions from their employers to the PEP.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) amended ERISA to include provisions in ERISA sections 3(43) and 3(44) authorizing PEPs sponsored by pooled plan providers as a type of multiple employer plan.(1) ERISA section 3(44)(A)(iv) provides that the pooled plan provider of a PEP is responsible for ensuring that “all persons who handle assets of, or who are fiduciaries of, the [PEP] are bonded in accordance with [section 412 of ERISA].”(2) The SECURE Act also amended ERISA section 412 to confirm that the bonding requirements of that section apply to PEPs, except that the SECURE Act establishes $1,000,000 as the maximum bond amount as compared to $500,000 for other types of plans that do not hold employer securities.
The Department does not view the SECURE Act as expanding the bonding requirements for PEPs to include persons who handle “assets” of the PEP or who are fiduciaries of the PEP, but do not “handle funds or other property” of the PEP. Rather, in the Department’s view, the appropriate reading of the SECURE Act provision is that the normal section 412 rules that govern the bonding requirements under ERISA should apply to PEPs.(3) For example, under ERISA section 412 the required amount of bonding coverage is measured by the “amount of plan funds or other property” handled by a person. A person is required to be bonded in an amount equal to 10% of the plan funds or other property the person handles, subject to applicable $500,000 or $1,000,000 maximums. Accordingly, requiring persons dealing with PEP assets and fiduciaries of PEPs to be bonded without regard to whether they “handle plan funds or other property” would result in a meaningless requirement to be bonded for a zero amount in cases in which the person did not handle plan funds or other property.
The Department’s generally applicable bonding regulations address the point at which contributions to a plan become “funds or other property” of the plan for purposes of the bonding requirements. The regulations state:
Where the plan administrator is a board of trustees, person or body other than the employer . . . establishing the plan, a contribution to the plan from any source shall become “funds or other property” of the plan at the time it is received by the plan administrator. Employee contributions collected by an employer and later turned over to the plan administrator would not become “funds or other property” of the plan until receipt by the plan administrator.
29 CFR 2580.412-5(a).(4) Under ERISA section 3(44)(A)(i), a pooled plan provider must be designated as the plan administrator of the pooled employer plan. As such, in the Department’s view, employees of employers participating in a PEP who assist in collecting and transmitting participant contributions to the PEP would not by reason of such conduct be required to be bonded under section 412 because they would not be handling “plan funds or other property.”
The Department cautions that there may be circumstances in which participant contributions are not timely transmitted to the PEP and become “plan assets” in the hands of the employer.(5) The section 412 bonding provisions do not relieve plan sponsors and fiduciaries of their obligations when dealing with plan assets to ensure that participant contributions are transmitted to the plan in a timely manner and applied only to the payment of benefits and reasonable expenses of administering the plan. Use of participant contributions for any other purpose may result in civil sanctions under Title I of ERISA and criminal sanctions under 18 U.S.C. 664. See U.S. v. Grizzle, 933 F.2d 943 (11th Cir. 1991), cert. denied, 502 U.S. 897 (1991).
Your letter included a statement that under your “interpretation of the SECURE Act, SFAA believes the PEP Sponsor would need to purchase an ERISA Dishonesty Bond protecting the plan against Fraud and Dishonesty committed by a trustee, officer, administrator, or manager (except an independent contractor administrator or manager) of the plan or of the sponsor organization to satisfy the ERISA bonding requirement.” Section 412(a) of ERISA provides, subject to certain exceptions, that “every fiduciary of an employee benefit plan and every person who handles funds or other property of such a plan (hereinafter in this section referred to as ‘plan official’) shall be bonded as provided in this section . . . .”(6) The bonding requirements under section 412 of ERISA are not limited to “trustees, officers, administrators or managers” of a plan and there is no general exception for independent contractor administrators or managers. Every person who “handles funds or other property” of an employee benefit plan within the meaning of 29 CFR 2580.412-6 (i.e., a plan official) is required to be covered by a bond meeting the requirements of ERISA section 412 and the Department’s regulations unless the person is eligible for one of the exemptions in section 412 for certain banks, insurance companies, and registered brokers and dealers, or one of the exemptions granted by the Department in its regulations. Plan officials required to be bonded “will usually include the plan administrator and those officers and employees of the plan or plan sponsor who handle plan funds by virtue of their duties relating to the receipt, safekeeping and disbursement of funds.” FAB 2008–04, Q-5. However, “plan officials may also include other persons, such as service providers, whose duties and functions involve access to plan funds or decision-making authority that can give rise to a risk of loss through fraud or dishonesty.” Id. Accordingly, the pooled plan provider would be required to ensure that an independent contractor administrator or manager who handles plan funds or other property is properly bonded, which could include being covered by the bond of the PEP or by a separate bond obtained by the independent contractor administrator or manager that names the plan as an insured and meets the other requirements for bonds under ERISA section 412.
We hope this information is of assistance to you.
Information Letter 09-07-2022 (found at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/information-letters/09-07-2022) says the following:
William E. Heinbokel
Director of Fidelity and Regulatory Compliance
The Surety & Fidelity Association of America
1140 19th Street NW, Suite 500
Washington, DC 20036
Dear Mr. Heinbokel:
This letter responds to your request on behalf of the Surety & Fidelity Association of America (SFAA) for information regarding the bonding requirements under the Employee Retirement Income Security Act of 1974, as amended (ERISA) applicable to a pooled employer plan (PEP). You asked about the application of ERISA’s bonding requirements to employees of employers participating in a PEP who assist in collecting and transmitting participant contributions from their employers to the PEP.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) amended ERISA to include provisions in ERISA sections 3(43) and 3(44) authorizing PEPs sponsored by pooled plan providers as a type of multiple employer plan.(1) ERISA section 3(44)(A)(iv) provides that the pooled plan provider of a PEP is responsible for ensuring that “all persons who handle assets of, or who are fiduciaries of, the [PEP] are bonded in accordance with [section 412 of ERISA].”(2) The SECURE Act also amended ERISA section 412 to confirm that the bonding requirements of that section apply to PEPs, except that the SECURE Act establishes $1,000,000 as the maximum bond amount as compared to $500,000 for other types of plans that do not hold employer securities.
The Department does not view the SECURE Act as expanding the bonding requirements for PEPs to include persons who handle “assets” of the PEP or who are fiduciaries of the PEP, but do not “handle funds or other property” of the PEP. Rather, in the Department’s view, the appropriate reading of the SECURE Act provision is that the normal section 412 rules that govern the bonding requirements under ERISA should apply to PEPs.(3) For example, under ERISA section 412 the required amount of bonding coverage is measured by the “amount of plan funds or other property” handled by a person. A person is required to be bonded in an amount equal to 10% of the plan funds or other property the person handles, subject to applicable $500,000 or $1,000,000 maximums. Accordingly, requiring persons dealing with PEP assets and fiduciaries of PEPs to be bonded without regard to whether they “handle plan funds or other property” would result in a meaningless requirement to be bonded for a zero amount in cases in which the person did not handle plan funds or other property.
The Department’s generally applicable bonding regulations address the point at which contributions to a plan become “funds or other property” of the plan for purposes of the bonding requirements. The regulations state:
Where the plan administrator is a board of trustees, person or body other than the employer . . . establishing the plan, a contribution to the plan from any source shall become “funds or other property” of the plan at the time it is received by the plan administrator. Employee contributions collected by an employer and later turned over to the plan administrator would not become “funds or other property” of the plan until receipt by the plan administrator.
29 CFR 2580.412-5(a).(4) Under ERISA section 3(44)(A)(i), a pooled plan provider must be designated as the plan administrator of the pooled employer plan. As such, in the Department’s view, employees of employers participating in a PEP who assist in collecting and transmitting participant contributions to the PEP would not by reason of such conduct be required to be bonded under section 412 because they would not be handling “plan funds or other property.”
The Department cautions that there may be circumstances in which participant contributions are not timely transmitted to the PEP and become “plan assets” in the hands of the employer.(5) The section 412 bonding provisions do not relieve plan sponsors and fiduciaries of their obligations when dealing with plan assets to ensure that participant contributions are transmitted to the plan in a timely manner and applied only to the payment of benefits and reasonable expenses of administering the plan. Use of participant contributions for any other purpose may result in civil sanctions under Title I of ERISA and criminal sanctions under 18 U.S.C. 664. See U.S. v. Grizzle, 933 F.2d 943 (11th Cir. 1991), cert. denied, 502 U.S. 897 (1991).
Your letter included a statement that under your “interpretation of the SECURE Act, SFAA believes the PEP Sponsor would need to purchase an ERISA Dishonesty Bond protecting the plan against Fraud and Dishonesty committed by a trustee, officer, administrator, or manager (except an independent contractor administrator or manager) of the plan or of the sponsor organization to satisfy the ERISA bonding requirement.” Section 412(a) of ERISA provides, subject to certain exceptions, that “every fiduciary of an employee benefit plan and every person who handles funds or other property of such a plan (hereinafter in this section referred to as ‘plan official’) shall be bonded as provided in this section . . . .”(6) The bonding requirements under section 412 of ERISA are not limited to “trustees, officers, administrators or managers” of a plan and there is no general exception for independent contractor administrators or managers. Every person who “handles funds or other property” of an employee benefit plan within the meaning of 29 CFR 2580.412-6 (i.e., a plan official) is required to be covered by a bond meeting the requirements of ERISA section 412 and the Department’s regulations unless the person is eligible for one of the exemptions in section 412 for certain banks, insurance companies, and registered brokers and dealers, or one of the exemptions granted by the Department in its regulations. Plan officials required to be bonded “will usually include the plan administrator and those officers and employees of the plan or plan sponsor who handle plan funds by virtue of their duties relating to the receipt, safekeeping and disbursement of funds.” FAB 2008–04, Q-5. However, “plan officials may also include other persons, such as service providers, whose duties and functions involve access to plan funds or decision-making authority that can give rise to a risk of loss through fraud or dishonesty.” Id. Accordingly, the pooled plan provider would be required to ensure that an independent contractor administrator or manager who handles plan funds or other property is properly bonded, which could include being covered by the bond of the PEP or by a separate bond obtained by the independent contractor administrator or manager that names the plan as an insured and meets the other requirements for bonds under ERISA section 412.
We hope this information is of assistance to you.
ERISA-Third Circuit Upholds Dismissal Of Claim Against ESOP Fiduciary (Posted 11/14/2022)
In Perrone v. Johnson & Johnson, No. 21-1885, 2022 WL 4090301 (3d Cir. Sept. 7, 2022), the Third Circuit Court of Appeals says the following:
Johnson & Johnson (“J&J”) offers an Employee Stock Ownership Plan (“ESOP”) as an investment option within its retirement savings plans. The ESOP invests solely in J&J stock, which declined in price following a news report accusing J&J of concealing that its popular baby powder was contaminated with asbestos. J&J denied both that its product was contaminated and that it had concealed anything about the product.
What’s important here, however, is the stock market ramifications of the allegation. The Plaintiffs, J&J employees who participated in the ESOP, allege that the ESOP’s administrators, who are senior officers of J&J, violated their fiduciary duties by failing to protect the ESOP’s beneficiaries from a stock price drop. According to the Plaintiffs, those fiduciaries, being corporate insiders, should have seen the price drop coming because of the baby powder controversy. Specifically, the Plaintiffs allege that the corporate-insider fiduciaries violated the duty of prudence imposed on them by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1002-1003.
In Fifth Third Bancorp v. Dudenhoeffer, the Supreme Court held that a plaintiff seeking to bring such a claim must plausibly allege “an alternative action that the defendant could have taken that would have been consistent with the securities laws,” and, further, “that a prudent fiduciary in the same circumstances would not have viewed [the proposed alternative action] as more likely to harm the fund than to help it.” 573 U.S. 409, 428 (2014).
The Plaintiffs here propose two alternative actions that they say the Defendants should have taken before the stock price dropped. First, they say that the Defendants could have used their corporate powers to make public disclosures that would have corrected J&J’s artificially high stock price earlier rather than later. Second, they say that the fiduciaries could have stopped investing in J&J stock and simply held onto all ESOP contributions as cash. The District Court rejected those alternative actions as failing the Dudenhoeffer test, and we agree. A reasonable fiduciary in the Defendants’ circumstances could readily view corrective disclosures or cash holdings as being likely to do more harm than good to the ESOP, particularly given the uncertainty about J&J’s future liabilities and the future movement of its stock price. We will therefore affirm the dismissal of the Plaintiffs’ complaint.
The case may be found at: https://www2.ca3.uscourts.gov/opinarch/211885p.pdf
In Perrone v. Johnson & Johnson, No. 21-1885, 2022 WL 4090301 (3d Cir. Sept. 7, 2022), the Third Circuit Court of Appeals says the following:
Johnson & Johnson (“J&J”) offers an Employee Stock Ownership Plan (“ESOP”) as an investment option within its retirement savings plans. The ESOP invests solely in J&J stock, which declined in price following a news report accusing J&J of concealing that its popular baby powder was contaminated with asbestos. J&J denied both that its product was contaminated and that it had concealed anything about the product.
What’s important here, however, is the stock market ramifications of the allegation. The Plaintiffs, J&J employees who participated in the ESOP, allege that the ESOP’s administrators, who are senior officers of J&J, violated their fiduciary duties by failing to protect the ESOP’s beneficiaries from a stock price drop. According to the Plaintiffs, those fiduciaries, being corporate insiders, should have seen the price drop coming because of the baby powder controversy. Specifically, the Plaintiffs allege that the corporate-insider fiduciaries violated the duty of prudence imposed on them by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1002-1003.
In Fifth Third Bancorp v. Dudenhoeffer, the Supreme Court held that a plaintiff seeking to bring such a claim must plausibly allege “an alternative action that the defendant could have taken that would have been consistent with the securities laws,” and, further, “that a prudent fiduciary in the same circumstances would not have viewed [the proposed alternative action] as more likely to harm the fund than to help it.” 573 U.S. 409, 428 (2014).
The Plaintiffs here propose two alternative actions that they say the Defendants should have taken before the stock price dropped. First, they say that the Defendants could have used their corporate powers to make public disclosures that would have corrected J&J’s artificially high stock price earlier rather than later. Second, they say that the fiduciaries could have stopped investing in J&J stock and simply held onto all ESOP contributions as cash. The District Court rejected those alternative actions as failing the Dudenhoeffer test, and we agree. A reasonable fiduciary in the Defendants’ circumstances could readily view corrective disclosures or cash holdings as being likely to do more harm than good to the ESOP, particularly given the uncertainty about J&J’s future liabilities and the future movement of its stock price. We will therefore affirm the dismissal of the Plaintiffs’ complaint.
The case may be found at: https://www2.ca3.uscourts.gov/opinarch/211885p.pdf
Employee Benefits-IRS Issues Rev. Proc. For Submission Of Determination Letters Pertaining To 403(b) Plans (Posted 11/12/2022)
IRS states the following as the purpose of Rev. Proc. 2022-40:
.01 This revenue procedure modifies Rev. Proc. 2016-37, 2016-29 IRB 136 (Footnote 1) which, in part, provides the circumstances under which a Plan Sponsor may submit a determination letter application to the Internal Revenue Service (IRS) with respect to a qualified individually designed plan, to permit the submission of determination letter applications for section 403(b) individually designed plans. Under this revenue procedure, a Plan Sponsor that maintains a section 403(b) individually designed plan will be permitted to submit a determination letter application for an initial plan determination, for a determination upon plan termination, and in certain other circumstances identified by the IRS in guidance published in the Internal Revenue Bulletin (IRB).
The earliest date a Plan Sponsor will be permitted to submit a determination letter application for a section 403(b) individually designed plan is June 1, 2023, in accordance with section 12 of this revenue procedure.
02 This revenue procedure also (1) incorporates modifications of Rev. Proc. 2016-37 set forth in Rev. Proc. 2019-20, 2019-20 IRB 1182, relating to the submission of determination letter applications for a determination with respect to Merged Plans, (2) clarifies and modifies the provisions of Rev. Proc. 2019-39, 2019-42 IRB 945 (Footnote 2) that relate to the Remedial Amendment Period for section 403(b) individually designed plan Form Defects first occurring after June 30, 2020, (3) extends the expiration of the Remedial Amendment Period for new qualified individually designed plans, (4) modifies the circumstances under which a plan is considered to have been issued an initial plan determination, and (5) modifies the scope of review of qualified individually designed plans submitted under the determination letter program.
03 This revenue procedure does not modify or restate the provisions of Rev. Proc. 2016-37 relating to qualified pre-approved plans. The Department of the Treasury (Treasury Department) and the IRS anticipate updating the provisions of Rev. Proc. 2016-37 relating to qualified pre-approved plans in future guidance. (Footnote 3)
See the Rev. Proc. for footnotes and details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-22-40.pdf
IRS states the following as the purpose of Rev. Proc. 2022-40:
.01 This revenue procedure modifies Rev. Proc. 2016-37, 2016-29 IRB 136 (Footnote 1) which, in part, provides the circumstances under which a Plan Sponsor may submit a determination letter application to the Internal Revenue Service (IRS) with respect to a qualified individually designed plan, to permit the submission of determination letter applications for section 403(b) individually designed plans. Under this revenue procedure, a Plan Sponsor that maintains a section 403(b) individually designed plan will be permitted to submit a determination letter application for an initial plan determination, for a determination upon plan termination, and in certain other circumstances identified by the IRS in guidance published in the Internal Revenue Bulletin (IRB).
The earliest date a Plan Sponsor will be permitted to submit a determination letter application for a section 403(b) individually designed plan is June 1, 2023, in accordance with section 12 of this revenue procedure.
02 This revenue procedure also (1) incorporates modifications of Rev. Proc. 2016-37 set forth in Rev. Proc. 2019-20, 2019-20 IRB 1182, relating to the submission of determination letter applications for a determination with respect to Merged Plans, (2) clarifies and modifies the provisions of Rev. Proc. 2019-39, 2019-42 IRB 945 (Footnote 2) that relate to the Remedial Amendment Period for section 403(b) individually designed plan Form Defects first occurring after June 30, 2020, (3) extends the expiration of the Remedial Amendment Period for new qualified individually designed plans, (4) modifies the circumstances under which a plan is considered to have been issued an initial plan determination, and (5) modifies the scope of review of qualified individually designed plans submitted under the determination letter program.
03 This revenue procedure does not modify or restate the provisions of Rev. Proc. 2016-37 relating to qualified pre-approved plans. The Department of the Treasury (Treasury Department) and the IRS anticipate updating the provisions of Rev. Proc. 2016-37 relating to qualified pre-approved plans in future guidance. (Footnote 3)
See the Rev. Proc. for footnotes and details. It may be found here: https://www.irs.gov/pub/irs-drop/rp-22-40.pdf
Employee Benefits-IRS Issues The 2022–2023 Priority Guidance Plan (Posted 11/10/2022)
The IRS says the following on the Plan:
We are pleased to announce the release of the 2022–2023 Priority Guidance Plan. In Notice 2022-21, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (Service) solicited recommendations for items to be included in the plan from all interested parties, including taxpayers, tax practitioners, and industry groups. The Treasury Department and the Service recognize the importance of public input in formulating a Priority Guidance Plan that focuses resources on guidance items that are most important to taxpayers and tax administration. Solicitation of input on, and issuance of, this plan reflects an emphasis on taxpayer engagement with the Treasury Department and the Service through a variety of channels, consistent with the directive of the Taxpayer First Act, Pub. L. 116-25, 133 Stat. 981.
The 2022–2023 Priority Guidance Plan contains 205 guidance projects that are priorities for allocating Treasury Department and Service resources during the 12-month period from July 1, 2022 through June 30, 2023 (the plan year). The projects on the plan will be the focus of our efforts during the plan year. However, the plan does not provide any deadline for completing the projects.
Some projects that were on the 2021-2022 Priority Guidance Plan are not included on the 2022-2023 plan because they are no longer considered priorities for purposes of allocating resources during the 2022- 2023 plan year. Some of those projects may be considered for inclusion on a future priority guidance plan.
In addition to the items on the 2022–2023 plan, the Appendix lists the more routine guidance that is generally published each year.
We intend to update the 2022–2023 plan during the plan year to reflect additional items that become priorities, guidance that is published during the plan year, and projects that may result from legislative developments. The periodic updates allow us flexibility throughout the plan year to consider comments received from taxpayers and tax practitioners relating to additional projects and to respond to developments arising during the plan year.
The published guidance process can be fully successful only if we have the benefit of the insight and experience of taxpayers and practitioners who must apply the rules. Therefore, we invite the public to continue to provide us with their comments and suggestions throughout the plan year.
Additional copies of the 2022–2023 Priority Guidance Plan can be obtained from the IRS website at http://www.irs.gov/uac/Priority-Guidance-Plan.
See the Plan for details. It may be found here: https://www.irs.gov/pub/irs-utl/2022-2023-pgp-initial.pdf
The IRS says the following on the Plan:
We are pleased to announce the release of the 2022–2023 Priority Guidance Plan. In Notice 2022-21, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (Service) solicited recommendations for items to be included in the plan from all interested parties, including taxpayers, tax practitioners, and industry groups. The Treasury Department and the Service recognize the importance of public input in formulating a Priority Guidance Plan that focuses resources on guidance items that are most important to taxpayers and tax administration. Solicitation of input on, and issuance of, this plan reflects an emphasis on taxpayer engagement with the Treasury Department and the Service through a variety of channels, consistent with the directive of the Taxpayer First Act, Pub. L. 116-25, 133 Stat. 981.
The 2022–2023 Priority Guidance Plan contains 205 guidance projects that are priorities for allocating Treasury Department and Service resources during the 12-month period from July 1, 2022 through June 30, 2023 (the plan year). The projects on the plan will be the focus of our efforts during the plan year. However, the plan does not provide any deadline for completing the projects.
Some projects that were on the 2021-2022 Priority Guidance Plan are not included on the 2022-2023 plan because they are no longer considered priorities for purposes of allocating resources during the 2022- 2023 plan year. Some of those projects may be considered for inclusion on a future priority guidance plan.
In addition to the items on the 2022–2023 plan, the Appendix lists the more routine guidance that is generally published each year.
We intend to update the 2022–2023 plan during the plan year to reflect additional items that become priorities, guidance that is published during the plan year, and projects that may result from legislative developments. The periodic updates allow us flexibility throughout the plan year to consider comments received from taxpayers and tax practitioners relating to additional projects and to respond to developments arising during the plan year.
The published guidance process can be fully successful only if we have the benefit of the insight and experience of taxpayers and practitioners who must apply the rules. Therefore, we invite the public to continue to provide us with their comments and suggestions throughout the plan year.
Additional copies of the 2022–2023 Priority Guidance Plan can be obtained from the IRS website at http://www.irs.gov/uac/Priority-Guidance-Plan.
See the Plan for details. It may be found here: https://www.irs.gov/pub/irs-utl/2022-2023-pgp-initial.pdf
Employee Benefits-IRS Issues 2023 Instructions for Forms 1099-SA and 5498-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA, and HSA, Archer MSA, or Medicare Advantage MSA Information (Posted 11/9/2022)
As to future developments, the IRS says: For the latest information about developments related to Forms 1099-SA and 5498-SA and their instructions, such as legislation enacted after they were published, go to IRS.gov/Form1099SA and IRS.gov/Form5498SA.
The Instructions may be found at: https://www.irs.gov/pub/irs-prior/i1099sa--2023.pdf
As to future developments, the IRS says: For the latest information about developments related to Forms 1099-SA and 5498-SA and their instructions, such as legislation enacted after they were published, go to IRS.gov/Form1099SA and IRS.gov/Form5498SA.
The Instructions may be found at: https://www.irs.gov/pub/irs-prior/i1099sa--2023.pdf
ERISA-Eighth Circuit Finds The Defendant Did Not Breach Its Fiduciary Duty Or Enter Into A Prohibited Transaction Under ERISA (Posted 11/8/2022)
In Rozo v. Principal Life Ins. Co., No. 21-2026 (8th Cir. Sep. 2, 2022), the Eighth Circuit Court of Appeals says the following:
Principal Life Insurance Company (Principal) offers a product called the Principal Fixed Income Option (PFIO), a stable value contract, to employer sponsored 401(k) plans. Frederick Rozo, on behalf of himself and a class of plan participants who deposited money into the PFIO, sued Principal under the Employee Retirement Income Security Act of 1974 (ERISA), claiming that it (1) breached its fiduciary duty of loyalty by setting a low interest rate for participants and (2) engaged in a prohibited transaction by using the PFIO contract to make money for itself. The district court1 granted summary judgment to Principal after concluding that it was not a fiduciary. This court reversed, holding that Principal was a fiduciary. See Rozo v. Principal Life Ins. Co., 949 F.3d 1071 (8th Cir. 2020). On remand, the district court entered judgment in favor of Principal on both claims after a bench trial. Rozo challenges the court’s judgment. We affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/09/212026P.pdf
In Rozo v. Principal Life Ins. Co., No. 21-2026 (8th Cir. Sep. 2, 2022), the Eighth Circuit Court of Appeals says the following:
Principal Life Insurance Company (Principal) offers a product called the Principal Fixed Income Option (PFIO), a stable value contract, to employer sponsored 401(k) plans. Frederick Rozo, on behalf of himself and a class of plan participants who deposited money into the PFIO, sued Principal under the Employee Retirement Income Security Act of 1974 (ERISA), claiming that it (1) breached its fiduciary duty of loyalty by setting a low interest rate for participants and (2) engaged in a prohibited transaction by using the PFIO contract to make money for itself. The district court1 granted summary judgment to Principal after concluding that it was not a fiduciary. This court reversed, holding that Principal was a fiduciary. See Rozo v. Principal Life Ins. Co., 949 F.3d 1071 (8th Cir. 2020). On remand, the district court entered judgment in favor of Principal on both claims after a bench trial. Rozo challenges the court’s judgment. We affirm.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/09/212026P.pdf
ERISA-Sixth Circuit Agrees With Plaintiffs That Federal Courts Lack Jurisdiction To Hear Their Claims (Posted 11/7/2022)
In American Electric Power Service Corporation v. Fitch, No. 22-3005 (6th Cir. Aug. 30, 2022) (Unpublished), the Sixth Circuit Court of Appeals says the following:
A tragic automobile accident resulted in the death of John “Jack” D. Fitch and the payment of expenses for accident-related medical treatment by the American Electric Power System Comprehensive Medical Plan (Plan). Jack was enrolled as a beneficiary under the self-funded medical plan that his mother participated in as an employee of American Electric Power Service Corporation (AEP). In this action brought under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA), AEP, on behalf of the Plan, sought to impose “an equitable lien by agreement over identifiable [third-party settlement] funds in the possession and/or control of” Jack’s father, John K. Fitch, as the Administrator of the Estate, and/or Glori Fitch, Jack’s mother as a Plan participant.
The district court dismissed the complaint without reaching the merits of the ERISA claims after concluding that the “probate exception” deprived the federal court of subject-matter jurisdiction. See Fitch v. Am. Elec. Power Sys. Comprehensive Med. Plan, No. 21-CV-576, 2021 WL 5711909, at *10–12 (S.D. Ohio Dec. 2, 2021). AEP appealed, arguing that the district court erred in dismissing its complaint. The Fitches respond that AEP has forfeited any challenge to the district court’s conclusion that federal courts lack jurisdiction to hear its claims. We agree with the Fitches and AFFIRM,
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0359n-06.pdf
In American Electric Power Service Corporation v. Fitch, No. 22-3005 (6th Cir. Aug. 30, 2022) (Unpublished), the Sixth Circuit Court of Appeals says the following:
A tragic automobile accident resulted in the death of John “Jack” D. Fitch and the payment of expenses for accident-related medical treatment by the American Electric Power System Comprehensive Medical Plan (Plan). Jack was enrolled as a beneficiary under the self-funded medical plan that his mother participated in as an employee of American Electric Power Service Corporation (AEP). In this action brought under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA), AEP, on behalf of the Plan, sought to impose “an equitable lien by agreement over identifiable [third-party settlement] funds in the possession and/or control of” Jack’s father, John K. Fitch, as the Administrator of the Estate, and/or Glori Fitch, Jack’s mother as a Plan participant.
The district court dismissed the complaint without reaching the merits of the ERISA claims after concluding that the “probate exception” deprived the federal court of subject-matter jurisdiction. See Fitch v. Am. Elec. Power Sys. Comprehensive Med. Plan, No. 21-CV-576, 2021 WL 5711909, at *10–12 (S.D. Ohio Dec. 2, 2021). AEP appealed, arguing that the district court erred in dismissing its complaint. The Fitches respond that AEP has forfeited any challenge to the district court’s conclusion that federal courts lack jurisdiction to hear its claims. We agree with the Fitches and AFFIRM,
The case may be found at: https://www.opn.ca6.uscourts.gov/opinions.pdf/22a0359n-06.pdf
Employee Benefits-PBGC Releases Tables Showing Maximum Monthly Guaranteed Benefits (Posted 11/5/2022)
The PBGC Release (updated as of 10/19/2022) says the following: The maximum guarantees in these tables apply only to single-employer pension plans whose benefits PBGC pays as trustee. These guarantees do not apply to multiemployer plans. Information on multiemployer guarantees is included on our Multiemployer FAQ page.
When PBGC becomes trustee of a pension plan, we can guarantee benefits only up to limits set by federal law. One of those legal limits is the maximum guarantee. The maximum amounts that PBGC can guarantee are listed by age in the following Maximum Monthly Guarantee Tables.
Please note: Most benefits in PBGC-trusteed plans are lower than the maximum and not affected by legal limits.
See the Release for details and links referred to. It may be found at: https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee
The PBGC Release (updated as of 10/19/2022) says the following: The maximum guarantees in these tables apply only to single-employer pension plans whose benefits PBGC pays as trustee. These guarantees do not apply to multiemployer plans. Information on multiemployer guarantees is included on our Multiemployer FAQ page.
When PBGC becomes trustee of a pension plan, we can guarantee benefits only up to limits set by federal law. One of those legal limits is the maximum guarantee. The maximum amounts that PBGC can guarantee are listed by age in the following Maximum Monthly Guarantee Tables.
Please note: Most benefits in PBGC-trusteed plans are lower than the maximum and not affected by legal limits.
See the Release for details and links referred to. It may be found at: https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee
Employee Benefits-PBGC Updates Table Showing Present Value Of PBGC Maximum Guarantee (Posted 11/4/2022)
The PBGC says the following about the Table (as updated 10/31/2022):
Present Value of the Maximum PBGC Guaranteed Benefit under IRC Section 436(d)(3)(A)(ii) and ERISA Section 206(g)(3)(C)(i)(II)
IRC section 436(d)(3) and ERISA section 206(g)(3)(C) provide that if the "adjusted funding target attainment percentage" is at least 60% but less than 80%, a plan generally may not pay a prohibited payment to the extent the payment exceeds the lesser of:
For additional information on benefit restrictions, including the definition of "prohibited payment" and effective dates, see Treasury's benefit restrictions regulations.
See the Table for the maximum amounts. It may be found at: https://www.pbgc.gov/prac/mortality-retirement-and-pv-max-guarantee/present-guarantee
The PBGC says the following about the Table (as updated 10/31/2022):
Present Value of the Maximum PBGC Guaranteed Benefit under IRC Section 436(d)(3)(A)(ii) and ERISA Section 206(g)(3)(C)(i)(II)
IRC section 436(d)(3) and ERISA section 206(g)(3)(C) provide that if the "adjusted funding target attainment percentage" is at least 60% but less than 80%, a plan generally may not pay a prohibited payment to the extent the payment exceeds the lesser of:
- (1) 50% of the amount of the payment that would be paid if the restriction did not apply, or
- (2) the present value, determined under guidance provided by PBGC, of the maximum guarantee with respect to the participant under ERISA section 4022.
For additional information on benefit restrictions, including the definition of "prohibited payment" and effective dates, see Treasury's benefit restrictions regulations.
See the Table for the maximum amounts. It may be found at: https://www.pbgc.gov/prac/mortality-retirement-and-pv-max-guarantee/present-guarantee
ERISA-Eleventh Circuit Rules That Plaintiff’s Suit Is Time-Barred By A Provision In The Governing Insurance Policy Imposing A Three Year Limit For Filing Suit Following The Insurer’s Denial Of Benefits (Posted 11/3/2022)
In Bakos v. Unum Life Ins. Co. of America, No. 22-11131 (11th Cir. Aug. 25, 2022) (Unpublished), the Eleventh Circuit Court of Appeals says the following:
Plaintiff-Appellant Angela Bakos appeals the district court’s order dismissing her second amended complaint that alleged claims under the Employee Retirement Income Security Act (ERISA). The district court granted Defendant-Appellee UNUM Life Insurance Company of America’s (UNUM) motion to dismiss because Bakos’s claims were time barred due to a provision in her insurance policy that required her to file a suit in federal court within three years of UNUM denying her long-term disability benefits. After careful review, we affirm.
The case may be found at: https://media.ca11.uscourts.gov/opinions/unpub/files/202211131.pdf
In Bakos v. Unum Life Ins. Co. of America, No. 22-11131 (11th Cir. Aug. 25, 2022) (Unpublished), the Eleventh Circuit Court of Appeals says the following:
Plaintiff-Appellant Angela Bakos appeals the district court’s order dismissing her second amended complaint that alleged claims under the Employee Retirement Income Security Act (ERISA). The district court granted Defendant-Appellee UNUM Life Insurance Company of America’s (UNUM) motion to dismiss because Bakos’s claims were time barred due to a provision in her insurance policy that required her to file a suit in federal court within three years of UNUM denying her long-term disability benefits. After careful review, we affirm.
The case may be found at: https://media.ca11.uscourts.gov/opinions/unpub/files/202211131.pdf
ERISA-Eighth Circuit Rules That Plaintiff’s Claims Of Breach Of Fiduciary Duty, Breach Of Contract And Unjust Enrichment Fail (Posted 11/2/2022)
In Gelschus v. Hogen, No. 21-3453 (8th Cir. Aug. 29, 2022), the Eighth Circuit Court of Appeals says the following:
Sally A. Hogen made contributions to a 401(k) plan during her employment at Honeywell International Inc. She originally designated her husband, Clifford C. Hogen, as the sole beneficiary in the event of her death. Sally and Clifford divorced in 2002. In the marital termination agreement (MTA), they agreed that “[Sally] will be awarded, free and clear of any claim on the part of [Clifford], all of the parties’ right, title, and interest in and to the Honeywell 401(k) Savings and Ownership Plan.”
In 2008, Sally submitted a change-of-beneficiary form to Honeywell. She, however, did not comply with a requirement. She allocated “33 1/3%” of the 401(k) benefits to each of her siblings. The instructions said, “The Allocation % must be whole percentages.” Because she did not use whole percentages, Honeywell did not change her designation. Honeywell called Sally and left a message notifying her of the rejection. Honeywell also sent eleven annual statements showing Clifford as the sole beneficiary. She took no further action.
Sally died in 2019, with nearly $600,000 in her 401(k) plan. Honeywell paid the benefits to Clifford. Robert F. Gelschus, as personal representative of Sally’s estate, sued Honeywell for breach of fiduciary duty, and Clifford for breach of contract, unjust enrichment, conversion, and civil theft. The district court granted summary judgment to both defendants. It ruled that Honeywell did not breach a fiduciary duty because it complied with ERISA’s “plan documents rule.” As for Clifford, the district court determined that Gelschus did not have standing and, even if he did, his claims failed on the merits because there was no genuine dispute of fact whether Clifford breached the MTA. Gelschus appeals. Having jurisdiction under 28 U.S.C. § 1291, this court affirms summary judgment for Honeywell and reverses summary judgment for Clifford on the breach of contract and unjust enrichment claims.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/08/213453P.pdf
In Gelschus v. Hogen, No. 21-3453 (8th Cir. Aug. 29, 2022), the Eighth Circuit Court of Appeals says the following:
Sally A. Hogen made contributions to a 401(k) plan during her employment at Honeywell International Inc. She originally designated her husband, Clifford C. Hogen, as the sole beneficiary in the event of her death. Sally and Clifford divorced in 2002. In the marital termination agreement (MTA), they agreed that “[Sally] will be awarded, free and clear of any claim on the part of [Clifford], all of the parties’ right, title, and interest in and to the Honeywell 401(k) Savings and Ownership Plan.”
In 2008, Sally submitted a change-of-beneficiary form to Honeywell. She, however, did not comply with a requirement. She allocated “33 1/3%” of the 401(k) benefits to each of her siblings. The instructions said, “The Allocation % must be whole percentages.” Because she did not use whole percentages, Honeywell did not change her designation. Honeywell called Sally and left a message notifying her of the rejection. Honeywell also sent eleven annual statements showing Clifford as the sole beneficiary. She took no further action.
Sally died in 2019, with nearly $600,000 in her 401(k) plan. Honeywell paid the benefits to Clifford. Robert F. Gelschus, as personal representative of Sally’s estate, sued Honeywell for breach of fiduciary duty, and Clifford for breach of contract, unjust enrichment, conversion, and civil theft. The district court granted summary judgment to both defendants. It ruled that Honeywell did not breach a fiduciary duty because it complied with ERISA’s “plan documents rule.” As for Clifford, the district court determined that Gelschus did not have standing and, even if he did, his claims failed on the merits because there was no genuine dispute of fact whether Clifford breached the MTA. Gelschus appeals. Having jurisdiction under 28 U.S.C. § 1291, this court affirms summary judgment for Honeywell and reverses summary judgment for Clifford on the breach of contract and unjust enrichment claims.
The case may be found at: https://ecf.ca8.uscourts.gov/opndir/22/08/213453P.pdf
ERISA-Seventh Circuit Upholds Dismissal Of Case For Failure To State A Claim (Posted 11/1/2022)
In Albert v. Oshkosh Corp., No. 21-2789 (7th Cir. Aug. 29, 2022), the Seventh Circuit Court of Appeals says the following:
Andrew Albert claims that his former employer, a subsidiary of Oshkosh Corporation, violated the Employee Retirement Income Security Act by mismanaging its retirement plan. Albert alleges, among other things, that Defendants breached their fiduciary duties by authorizing the Plan to pay unreasonably high fees for recordkeeping and administration, failing to adequately review the Plan’s 2 investment portfolio to ensure that each investment option was prudent, and unreasonably maintaining investment advisors and consultants for the Plan despite the availability of similar service providers with lower costs or better performance histories.
The district court granted Defendants’ motion to dismiss the complaint and denied Albert’s motion to reconsider. While this appeal was pending, the Supreme Court issued its opinion in Hughes v. Northwestern University, 142 S. Ct. 737 (2022), vacating our decision in Divane v. Northwestern University, 953 F.3d 980 (7th Cir. 2020), and remanding for reevaluation of the operative complaint. The district court cited Divane repeatedly in its opinion, albeit not for the proposition that the Supreme Court rejected in Hughes. As explained below, we affirm the dismissal of all claims for failure to state a claim.
The case may be found at: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2022/D08-29/C:21-2789:J:St__Eve:aut:T:fnOp:N:2924449:S:0
In Albert v. Oshkosh Corp., No. 21-2789 (7th Cir. Aug. 29, 2022), the Seventh Circuit Court of Appeals says the following:
Andrew Albert claims that his former employer, a subsidiary of Oshkosh Corporation, violated the Employee Retirement Income Security Act by mismanaging its retirement plan. Albert alleges, among other things, that Defendants breached their fiduciary duties by authorizing the Plan to pay unreasonably high fees for recordkeeping and administration, failing to adequately review the Plan’s 2 investment portfolio to ensure that each investment option was prudent, and unreasonably maintaining investment advisors and consultants for the Plan despite the availability of similar service providers with lower costs or better performance histories.
The district court granted Defendants’ motion to dismiss the complaint and denied Albert’s motion to reconsider. While this appeal was pending, the Supreme Court issued its opinion in Hughes v. Northwestern University, 142 S. Ct. 737 (2022), vacating our decision in Divane v. Northwestern University, 953 F.3d 980 (7th Cir. 2020), and remanding for reevaluation of the operative complaint. The district court cited Divane repeatedly in its opinion, albeit not for the proposition that the Supreme Court rejected in Hughes. As explained below, we affirm the dismissal of all claims for failure to state a claim.
The case may be found at: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2022/D08-29/C:21-2789:J:St__Eve:aut:T:fnOp:N:2924449:S:0
ERISA-Ninth Circuit Rules That Plaintiff Is Entitled To Accidental Death Benefits (Post 10/31/2022)
In Scott Wolf v. Ins. Co. Of N. America, No. 21-35485 (9th Cir. 8/25/2022), a panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed the district court’s summary judgment in favor of the plaintiff in an action under the Employee Retirement Income Security Act concerning the denial of an insurance claim based on the plaintiff’s son’s accidental death.
The son died in a one-car collision. He was intoxicated and had been driving at a high speed in the wrong direction down a one-way road when he hit a speed bump and lost control of the car, which ultimately flipped over and landed upside down in a body of water adjoining the road. The accidental death and dismemberment insurance policy obtained from defendant Life Insurance Company of North America (LINA) by the plaintiff via his employer paid benefits for a “Covered Accident,” defined as “[a] sudden, unforeseeable, external event that results, directly and independently of all other causes.”
Reviewing de novo, the Panel held that to determine whether the son’s death was the result of an “accident” under the policy, it must apply the Padfield test, an “overlapping subjective and objective inquiry.” The Panel concluded that, under this test, there was insufficient evidence in the administrative record to determine the son’s subjective expectation at the time he died. Proceeding to the objective inquiry, the Panel declined to consider for the first time on appeal LINA’s argument that because the policy defined the term “accident” as “a sudden, unforeseeable, external event,” the district court should have asked whether the son’s death was “reasonably foreseeable” rather than applying the Padfield test by asking whether his death was “substantially certain.” Declining to apply an exception for purely legal issues, the Panel concluded that the plaintiff would be unduly prejudiced by the belated application of a “reasonably foreseeable” test because not only did LINA fail to raise the argument below, but it also did not use that test when initially denying the plaintiff’s insurance claim. The Panel held that, under the Padfield test, the son’s death was an “accident” because, while the facts demonstrated that the son engaged in reckless conduct, the record did not show that his death was “substantially certain” to result from that conduct. Accordingly, the district court correctly determined that the son’s death was covered under the insurance policy.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca9/21-35485/21-35485-2022-08-25.pdf?ts=1661447066
In Scott Wolf v. Ins. Co. Of N. America, No. 21-35485 (9th Cir. 8/25/2022), a panel for the Ninth Circuit Court of Appeals (the “Panel”) affirmed the district court’s summary judgment in favor of the plaintiff in an action under the Employee Retirement Income Security Act concerning the denial of an insurance claim based on the plaintiff’s son’s accidental death.
The son died in a one-car collision. He was intoxicated and had been driving at a high speed in the wrong direction down a one-way road when he hit a speed bump and lost control of the car, which ultimately flipped over and landed upside down in a body of water adjoining the road. The accidental death and dismemberment insurance policy obtained from defendant Life Insurance Company of North America (LINA) by the plaintiff via his employer paid benefits for a “Covered Accident,” defined as “[a] sudden, unforeseeable, external event that results, directly and independently of all other causes.”
Reviewing de novo, the Panel held that to determine whether the son’s death was the result of an “accident” under the policy, it must apply the Padfield test, an “overlapping subjective and objective inquiry.” The Panel concluded that, under this test, there was insufficient evidence in the administrative record to determine the son’s subjective expectation at the time he died. Proceeding to the objective inquiry, the Panel declined to consider for the first time on appeal LINA’s argument that because the policy defined the term “accident” as “a sudden, unforeseeable, external event,” the district court should have asked whether the son’s death was “reasonably foreseeable” rather than applying the Padfield test by asking whether his death was “substantially certain.” Declining to apply an exception for purely legal issues, the Panel concluded that the plaintiff would be unduly prejudiced by the belated application of a “reasonably foreseeable” test because not only did LINA fail to raise the argument below, but it also did not use that test when initially denying the plaintiff’s insurance claim. The Panel held that, under the Padfield test, the son’s death was an “accident” because, while the facts demonstrated that the son engaged in reckless conduct, the record did not show that his death was “substantially certain” to result from that conduct. Accordingly, the district court correctly determined that the son’s death was covered under the insurance policy.
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca9/21-35485/21-35485-2022-08-25.pdf?ts=1661447066
ERISA-Second Circuit Finds That A Multi-Employer Benefit Fund May Audit An Employer’s Payroll And Wage Records (Posted 10/29/2022)
In New York State Nurses Association Benefits Fund v. The Nyack Hospital, No. 20-378 (2d Cir. 8/19/2022), the Second Circuit Court of Appeals says the following:
This case concerns the scope of the audit authority of a multi-employer employee benefit fund covered by the Employee Retirement Income Security Act (“ERISA”). The New York State Nurses Association Benefit Fund (the “Fund”) sought an audit of the Nyack Hospital’s (the “Hospital’s”) payroll and wage records. The Hospital objected, claiming that the Fund had the authority to inspect only the payroll records of employees the Hospital identified as members of the collective bargaining unit. The district court (Briccetti, J.) held that the Fund was entitled to the records of all persons the Hospital identified as registered nurses but not to the records of any other employees.
We reverse in part and affirm in part. To the extent the district court granted the Hospital’s cross-motion for summary judgment and denied the Fund’s motion for summary judgment, we reverse. To the extent the district court granted the Fund’s motion for summary judgment and denied the Hospital’s cross-motion for summary judgment, we affirm. We hold that the audit sought by the Fund was authorized by the Trust Agreement, and that the Hospital did not present evidence that the audit constituted a breach of the Fund’s fiduciary duty under ERISA. Accordingly, the audit was within the scope of the Fund trustees’ authority under the Supreme Court’s decision in Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985).
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca2/20-378/20-378-2022-08-19.pdf?ts=1660917649
In New York State Nurses Association Benefits Fund v. The Nyack Hospital, No. 20-378 (2d Cir. 8/19/2022), the Second Circuit Court of Appeals says the following:
This case concerns the scope of the audit authority of a multi-employer employee benefit fund covered by the Employee Retirement Income Security Act (“ERISA”). The New York State Nurses Association Benefit Fund (the “Fund”) sought an audit of the Nyack Hospital’s (the “Hospital’s”) payroll and wage records. The Hospital objected, claiming that the Fund had the authority to inspect only the payroll records of employees the Hospital identified as members of the collective bargaining unit. The district court (Briccetti, J.) held that the Fund was entitled to the records of all persons the Hospital identified as registered nurses but not to the records of any other employees.
We reverse in part and affirm in part. To the extent the district court granted the Hospital’s cross-motion for summary judgment and denied the Fund’s motion for summary judgment, we reverse. To the extent the district court granted the Fund’s motion for summary judgment and denied the Hospital’s cross-motion for summary judgment, we affirm. We hold that the audit sought by the Fund was authorized by the Trust Agreement, and that the Hospital did not present evidence that the audit constituted a breach of the Fund’s fiduciary duty under ERISA. Accordingly, the audit was within the scope of the Fund trustees’ authority under the Supreme Court’s decision in Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985).
The case may be found at: https://cases.justia.com/federal/appellate-courts/ca2/20-378/20-378-2022-08-19.pdf?ts=1660917649
Employee Benefits-IRS Releases 2023 Limitations For Benefits And Contributions Adjusted As Provided In Section 415(d), etc. (Posted 10/28/2022)
In Notice 2022-55, the IRS says the following:
Section 415 of the Internal Revenue Code (“Code”) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under section 415. Under section 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under section 215(i)(2)(A) of the Social Security Act.
See Notice 2022-55 for the 2023 Limitations. The Notice may be found at: https://www.irs.gov/pub/irs-drop/n-22-55.pdf
In Notice 2022-55, the IRS says the following:
Section 415 of the Internal Revenue Code (“Code”) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under section 415. Under section 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under section 215(i)(2)(A) of the Social Security Act.
See Notice 2022-55 for the 2023 Limitations. The Notice may be found at: https://www.irs.gov/pub/irs-drop/n-22-55.pdf
Employee Benefits-IRS Issues Table Showing Cost-of-Living Adjustments For Retirement Items (Posted 10/28/2022)
The Table may be found here: https://www.irs.gov/pub/irs-tege/cola-table.pdf
The Table may be found here: https://www.irs.gov/pub/irs-tege/cola-table.pdf