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Report Link Health Reform Bill Passed by House Restricts Employer Curtailment, Termination of Retiree Benefit.Jackson Lewis LLP - November 18, 2009 The health reform bill that passed the House of Representatives on Saturday, November 7, contains a provision that, if enacted, would limit severely the ability of employers to curtail or terminate retiree medical benefits provided to retired individuals and their beneficiaries. Moreover, the new rule (Section 110 of H.R. 3962) would be effective upon enactment. Report Link Health Care Reform Passed by the U.S. House of Representatives - Future Unknown.Vedder Price - November 17, 2009 On November 7, 2009, the U.S. House of Representatives passed its version of health care reform, known
as the Affordable HealthCare for America Act (H.R. 3962). As the media has noted, this House vote is
merely one step for legislation that may or may not ever be enacted. Similar legislation is pending in the
U.S. Senate, and debate is expected to begin on the Senate’s version in the near future. Any legislation
that passes the Senate will then need to be reconciled with what the House passed, and then ultimately
passed by both chambers and signed by the President before becoming law. Report Link It's Plan Amendment Time Again.Ford & Harrison LLP - November 06, 2009 Plan sponsors should be aware of upcoming deadlines for adoption of amendments to their qualified retirement plans. Certain amendments are required by the end of the 2009 plan year (December 31, 2009 for calendar year plans), while others are required by the plan sponsor's 2009 tax-filing deadline. In some cases, there may also be amendments required to be adopted by January 31, 2010. Report Link IRS Employee Plans Team Audits.Ford & Harrison LLP - November 02, 2009 The Internal Revenue Service (IRS) maintains a program known as the Employee Plans Team Audit (EPTA) program, under which random audits are used to discover, and remedy, common plan problems and mistakes, and to assist retirement plan sponsors and administrators in identifying those issues. Recently, the IRS updated its list of "common plan mistakes" that have been found during EPTA audits, as well as a sample of a questionnaire used by EPTA auditors to test the system of internal controls utilized by a plan. The EPTA Program is designed to deal with large retirement plans, i.e., those covering at least 2,500 participants, but having an insight into the EPTA procedures enables administrators of plans of all sizes to avoid most common errors in plan administration. The EPTA materials can also be utilized to develop and conduct self-audits and to correct any mistakes thereby identified. Report Link Retirement Plans Must Be Amended Before Year End.Littler Mendelson, P.C. - October 30, 2009 The end of the calendar year is soon approaching. For sponsors of qualified benefit plans, this means that plan amendments must be adopted and certain notices may need to be distributed. Below is a summary of the major amendments and notices that apply to most qualified retirement plans. The IRS has also released the new retirement plan limits for 2010 that are available here. During the year end flurry of activity, employers need to focus on these deadlines, notice requirements and new limits. If employers have not yet been contacted by their plan's service provider, employers should take action now to avoid being in noncompliance. Report Link 2010 Cost of Living Adjustments for Retirement Plans.Jackson Lewis LLP - October 23, 2009 The Internal Revenue Service has announced its cost-of-living adjustments applicable to dollar limitations for retirement plans and Social Security generally effective for Tax Year 2009 (see IR 2009-94). Report Link IRS Announces Plan Limits for 2010.Cooley Godward Kronish LLP. - October 21, 2009 The Internal Revenue Service has announced the 2010 limits that affect the operation of tax-qualified retirement plans, including 401(k) plans, and certain other types of employee benefit plans. Because the cost-of-living index used to determine the annual adjustments decreased over the past twelve months, there will be no adjustment made to the limits. This means that the 2010 limits remain at the same dollar amounts as the 2009 limits. Please see the accompanying table for the limits that are effective January 1, 2010. Report Link Benefit Plans: 2010 COLAs and Forms Update.Fredrikson & Byron, P.A. - October 20, 2009 The Internal Revenue Service has announced cost-of-living adjustments (which are few) to certain employee benefit plan dollar limitations for 2010. The 2010 limitations are as follows: Report Link IRS Announces Cost of Living Adjustments to Retirement Plan Dollar Limitations.Ford & Harrison LLP - October 19, 2009 The Internal Revenue Service (IRS) has announced cost of living adjustments to the dollar limitations applicable to various retirement plans for 2010. As a result of zero increases (or even decreases) in the applicable cost of living indices, virtually all of the limitation amounts will remain unchanged from their 2009 levels. Report Link Liability for Termination of Group Life Insurance Coverage.Ford & Harrison LLP - October 13, 2009 Generally speaking, employers are not familiar with the responsibility and potential liability for failing to notify employees of their right to convert group life insurance coverage to an individual life insurance policy upon termination of employment, or their right to apply for a waiver of premiums if they are disabled and absent from work. Within the past few years, there has been a wave of litigation brought by former employees and their beneficiaries complaining about the loss of group life insurance coverage due to misrepresentations made by employers about their group coverage and the failure of employers to inform terminated employees about their rights under the group life insurance plan documents. Report Link Where 'O Where are the Regulations for the Mental Health Parity Act?Ford & Harrison LLP - October 12, 2009 The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (the "Mental Health Parity Act"), passed last year, requires group health plans for businesses with more than 50 employees to provide any mental health or substance use disorder benefits they offer on par with other medical or surgical benefits. That is, the Mental Health Parity Act prohibits such group health plans from being more restrictive with regard to any mental health and substance use disorder benefits offered than the medical and surgical benefits being offered. Employers are not required to offer mental health or substance use disorder benefits. But if they do, parity among these benefits is required in regard to financial requirements and treatment limitations, annual and lifetime dollar maximums, and out-of-network providers. Report Link New IRS Guidance Concerning 2009 RMD Waivers.Ford & Harrison LLP - September 29, 2009 Last week, the Internal Revenue Service (IRS) announced guidance concerning qualified plan operations and rollovers that are (or could be) affected by the waiver of a 2009 required minimum distribution (RMD) under the Worker, Retiree, and Employer Recovery Act (WRERA) of 2008 (Pub. L. No. 110-458). Previously, the IRS had issued advice to financial institutions that are required to deal with the reporting aspects of a waiver of RMDs (Notice 2009-9, issued 1/9/09), but there was little if any guidance addressed to plan administrators or sponsors. Report Link Suspension of 2009 Required Minimum Distributions-Relief & Guidance from the IRS.Vedder Price - September 29, 2009 The Internal Revenue Service (IRS) has issued
guidance regarding the suspension of required
minimum distributions (RMDs) for 2009 from
defi ned contribution plans (for example, 401(k)
plans) under the Worker, Retiree and Employer
Recovery Act of 2008 (WRERA). As discussed in
a previous Vedder Price Employee Benefi ts
Briefi ng (March 2, 2009), WRERA permits plan
sponsors to amend their plans to allow participants
(or benefi ciaries) to forego receiving the RMD for
2009 that would otherwise be required because
they are 70½ or older. Alternatively, participants
(or benefi ciaries) may roll over 2009 RMD payments
to another qualifi ed plan or IRA. Report Link Mental Health Parity: Is Your Health Plan Ready?Jackson Lewis LLP - September 25, 2009 While awaiting what (if anything) is to come from “healthcare reform,” the stream of regulation of employer-sponsored group health plans continues. Employers must adapt as they face benefit planning for 2010 and open enrollment. Report Link New Standards for Breaches of Health Plan PHI.Ogletree Deakins - August 26, 2009 Federal law will soon require employers to provide notice to their health plan participants, the Department of Health and Human Services (HHS), and potentially even the media, following breaches of participant unsecured protected health information (PHI), under interim final HHS regulations set to be published in the August 24, 2009, Federal Register. Report Link What’s Happening with Health and Welfare Plans? More than You Might Think . . .Ogletree Deakins - August 18, 2009 Even before Congress began laboring over the potentially biggest health care legislation in years, employers had – or should have had – plenty of health and welfare plan issues on their agendas for the second half of 2009. Report Link America's Affordable Health Choices Act of 2009—Proposed Revisions to the Internal Revenue Code.Baker Hostetler LLP - July 23, 2009 The America’s Affordable Health Choices Act of 2009 (H.R. 3200) (the “Bill”) was introduced jointly by the House of Representatives’ Energy & Commerce, Education & Labor, and Ways & Means Committees on July 14, 2009. The Bill was subsequently “marked up” by Chairman Rangel of the Ways & Means Committee on July 15, 2009. The Bill’s stated purpose is “to provide affordable, quality health care for all Americans and reduce the growth in health care spending.” While our Healthcare Team has highlighted the Bill’s significant proposed changes that would directly affect healthcare providers in the July 23, 2009, issue of the Health Law Update, this Alert is meant to summarize only the potential revisions to the Internal Revenue Code (the “Code”) which were proposed in order to help fund the many healthcare reform measures. Report Link Recent Legislation and Regulations Require Changes to Health and Welfare Benefit Plans.Littler Mendelson, P.C. - July 17, 2009 Congress and federal regulatory agencies have been busy enacting legislation and proffering guidance which implements many new requirements for group health and welfare benefit plans. Many of the changes will require thoughtful action on the part of administrators and sponsors of group health and welfare benefit plans. Report Link IRS Provides Trends, Tips, Internal Control Questionnaire and Plan Documentation Guide Online.Littler Mendelson, P.C. - June 25, 2009 The Internal Revenue Service (IRS) has recently added important guidance to its Employee Plan Team Audit (EPTA) website that is very helpful to retirement plan sponsors and retirement plan administrators. First, the IRS has released an internal controls questionnaire to assist a plan sponsor in making sure its retirement plans operate in accordance with the plan terms and the Internal Revenue Code (the "Code"). Second, the IRS has released information regarding EPTA trends and tips revealed from audits of large retirement plans. Third, the IRS now provides a tool that assists employers with the documentation needed for an exam by type of plan, including defined contribution and defined benefit plans. This article summarizes the important features of these IRS materials. Report Link IRS Provides Trends, Tips, Internal Control Questionnaire and Plan Documentation Guide Online.Littler Mendelson, P.C. - June 17, 2009 The Internal Revenue Service (IRS) has recently added important guidance to its Employee Plan Team Audit (EPTA) website that is very helpful to retirement plan sponsors and retirement plan administrators. First, the IRS has released an internal controls questionnaire to assist a plan sponsor in making sure its retirement plans operate in accordance with the plan terms and the Internal Revenue Code (the "Code"). Second, the IRS has released information regarding EPTA trends and tips revealed from audits of large retirement plans. Third, the IRS now provides a tool that assists employers with the documentation needed for an exam by type of plan, including defined contribution and defined benefit plans. This article summarizes the important features of these IRS materials. Report Link IRS To Focus on Qualified Retirement Plan Failures.Baker, Donelson, Bearman, Caldwell & Berkowitz, PC - June 17, 2009 Qualified retirement plans are generally exempt from federal income tax, but nevertheless must comply with reporting and other requirements related to how they are administered. Further, as with individuals and entities subject to federal tax laws, qualified retirement plans are vulnerable to audits by the IRS. On its website, www.irs.gov/retirement, the IRS has clearly stated its intention to conduct audits this year to analyze operational features of retirement plans. According to Monika Templeman, the Director of Employee Plans Examinations, "There will be a prominent [employee benefit] examination presence in the Retirement Plans Community of benefits practitioners, plan sponsors/employers, and plan participants/employees." She states further that the IRS will increase its focus on enforcement this year. Report Link IRS Mandates New Reporting and Notice Obligations for Employer-Owned Life Insurance.Littler Mendelson, P.C. - May 28, 2009 The IRS has issued Notice 2009-48 outlining the reporting and notice obligations for employer-owned life insurance policies. The new rules become effective June 15, 2009. Report Link Michelle's Law Takes Effect Later This Year.Fisher & Phillips, LLP - May 04, 2009 Michelle's Law will take effect beginning October 9, 2009 (or January 1, 2010 for calendar year plans). It requires group health plans and group-health-plan-insurance issuers to continue coverage for dependent college students when they are forced to take a medically necessary leave of absence from school. The law was named after Michelle Morse, a college student in New Hampshire who was diagnosed with cancer but continued her studies on a full-time basis in order to avoid losing her health coverage under her parents' plan. Report Link CHIP Requirements Now In Effect.Fisher & Phillips, LLP - April 02, 2009 On February 4, 2009, President Obama signed the Children's Health Insurance Program Reauthorization Act of 2009 (CHIP). CHIP extends and expands the State Children's Health Insurance Program (SCHIP), and it contains several provisions that affect employer-sponsored group health plans. Report Link Effective Date of New Special Enrollment Period Under CHIPRA Arrives.Littler Mendelson, P.C. - April 02, 2009 On February 4, 2009, President Obama signed into law the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA). CHIPRA reauthorizes and expands the scope of the State Children's Health Insurance Program (now known as CHIP). Of special note are new requirements that directly affect employer-sponsored group health plans: (1) a new Health Insurance Portability and Accountability Act (HIPAA) special enrollment period that takes into account changes in eligibility for health benefits provided under Medicaid or CHIP; and (2) new notice requirements for employers including a notice of availability of benefits under Medicaid or CHIP and a notice to the state of coverage coordination information. Report Link CHILDREN’S HEALTH INSURANCE PROGRAM CREATES NEW SPECIAL ENROLLMENT RIGHTS FOR EMPLOYER GROUP HEALTH PLANS.Ballard Rosenberg Golper & Savitt - March 24, 2009 Congress recently passed the Children's Health Insurance Program Reauthorization Act of 2009 ("CHIP"). The new law, which expands eligibility for states' existing children's health insurance programs, contains important provisions affecting employer-sponsored group health plans. The law becomes effective April 1, 2009 and includes new special enrollment rights for employees and their dependents, a premium assistance plan for eligible low-income children covered by an employer's group health plan, and new notice and disclosure requirements. Report Link New Special Enrollment Rights Under Group Health Plans Effective April 1, 2009.Jackson Lewis LLP - March 23, 2009 The Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA”), enacted February 4, 2009, requires group health plans to provide two new special enrollment rights beginning April 1, 2009. Report Link Important Developments (Other Than COBRA).Vedder Price - March 03, 2009 Despite the economic slowdown, this has been a
busy time for benefi ts administrators. Year-end is
always hectic, and was more so in 2008, with the
need to fi nalize all nonqualifi ed plans and to cope
with increased pension funding requirements. 2009
appears to offer no respite, as employers continue
to respond to depressed conditions with reductions
in force and suspensions of 401(k) plan matching
contributions. In addition to these concerns,
administrators need to be aware of several recent
legislative and judicial developments that will impact
benefi t plan administration. The following is a
summary of some of the more important
developments. The COBRA subsidy provisions in
the economic stimulus legislation were discussed in
a separate Employee Benefi ts Briefi ng, dated
February 17, 2009. Report Link Making Work Pay - A Little.Ford & Harrison LLP - February 27, 2009 The Economic Stimulus Bill, enacted as the American Recovery and Reinvestment Act of 2009 (the "Act") created a refundable tax credit called the "Making Work Pay" credit, as described below. For most eligible individuals, the credit is supposed to be made available through decreased income tax withholding. The IRS has now released new withholding tables that take into account the new Making Work Pay credit, which will result in more take-home pay for tens of millions of Americans. Report Link Expansion of CHIP Reauthorization Act Creates New Burdens for Group Health Plans.Ford & Harrison LLP - February 18, 2009 The Children's Health Insurance Program ("CHIP") Reauthorization Act of 2009 (the "Act"), signed by President Obama on February 4, 2009, maintains and expands health coverage to low income and uninsured pregnant women and children. The Act, which generally is effective April 1, 2009, affects employers and group health plans in several ways. Report Link Your 2009 Benefits Checklist.Fisher & Phillips, LLP - January 09, 2009 A new year is upon us and, as always, there are new responsibilities for those responsible for employee benefits. Here are some updates, due dates, and mandates in this important area. Report Link Wellstone Act's Effective Date For New Mental Health and Substance Use Disorder Parity Rules ClarifiedLittler Mendelson, P.C. - January 09, 2009 On December 23, 2008, President Bush signed into law a technical correction to the effective date of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (the "Act"). Enacted on October 3, 2008, the Act established a requirement of full parity for mental health and substance use disorder benefits. For a full discussion of this legislation, see Littler's October 2008 ASAP, Equal Mental Health and Substance Use Benefits Realized. Report Link Legislation Expands Mental Health Obligations For Employer Plans.Ogletree Deakins - December 04, 2008 Beginning with 2010 plan years, employer health plans and group health insurers will no longer be able to impose separate financial requirements or treatment limitations on mental health or substance use disorder benefits, under new mental health parity provisions contained in the economic bailout legislation signed into law by President George W. Bush on October 3. Report Link Dual-role Benefit Plan Administrator Conflicts: Proceed With Caution.Vedder Price - November 06, 2008 The Supreme Court’s ruling in Metropolitan Life Ins. Co. v. Glenn increases the likelihood of the courts overturning certain benefits decisions. Understanding the ruling and what steps to take in its wake can help companies limit that risk. Report Link IRS Announces Cost of Living Increases to Dollar Limitations on Pension Plans.Ford & Harrison LLP - October 24, 2008 The Internal Revenue Service (IRS) has announced cost of living adjustments applicable to dollar limitations on pension plans as well as other tax items for 2009. Under the Internal Revenue Code, benefits and contributions under qualified retirement plans are subject to dollar limitations. The Code requires the Secretary of the Treasury to adjust these limits for cost of living increases. Report Link Benefit Plans: 2009 COLAs.Fredrikson & Byron, P.A. - October 23, 2008 The Internal Revenue Service has announced cost-of-living and statutory adjustments to certain employee benefit plan dollar limitations for 2009. The 2009 limitations are as follows: Report Link 2009 Cost of Living Adjustments for Retirement Plans.Jackson Lewis LLP - October 22, 2008 The Internal Revenue Service has announced its cost-of-living adjustments applicable to dollar limitations for retirement plans and Social Security generally effective for Tax Year 2009 (see IR 2008-118). Most notably, the limitation on annual salary deferrals into a 401(k) plan will increase from $15,500 to $16,500. Report Link Equal Mental Health and Substance Use Benefits Realized.Littler Mendelson, P.C. - October 22, 2008 The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("the Act") was signed into law on October 3, 2008, as part of H.R. 1424, the Tax Extender's and Alternative Minimum Tax Relief Act of 2008, a part of the recent massive financial rescue legislation. The long-awaited Act amends current requirements under ERISA, the Public Health Service Act and the Internal Revenue Code for parity in mental health benefits offered under a private group health benefit plan (currently known as the Mental Health Parity Act (MHPA)). Report Link IRS Announces Retirement Plan COLA Adjustments for 2009.Littler Mendelson, P.C. - October 22, 2008 On October 16, 2008, the Internal Revenue Service issued IR 2008-118, announcing the cost-of-living adjustments applicable to retirement plan limits for 2009. Most of the limits increase for 2009, as the increase in the cost-of-living index met the statutory threshold that triggers the adjustment. A summary of the current 2008 limits and the new 2009 limits follows: Report Link Bailout legislation expands mental health obligations for employer plans.Ogletree Deakins - October 16, 2008 Beginning with 2010 plan years, employer health plans and group health insurers will no longer be able to impose separate financial requirements or treatment limitations on mental health or substance use disorder benefits, under new mental health parity provisions contained in the economic bailout legislation signed into law by President George W. Bush on October 3. Report Link End of the Year Challenges for Benefit PlansOgletree Deakins - October 15, 2008 Congress and the Departments of Labor and Treasury have had a busy year in 2008. The legislative and regulatory agenda affecting employee benefit plans has been quite broad. Changes in the statutory and regulatory landscape over the last several years have imposed a plethora of requirements on employee benefit plans, their plan sponsors, and administrators. The compliance dates for a number of these requirements are December 31, 2008, and January 1, 2009. The final quarter of calendar year 2008 is upon us, and three months is a very short turnaround time for adopting and implementing some of the measures discussed in this article. The last few months of 2008 present a chance for employers to make sure that, as they ring in the new year, their employee benefit plans don’t suffer from a hangover. Report Link New Secondary Payer Reporting Requirements Take Effect January 1, 2009.Fisher & Phillips, LLP - October 06, 2008 The Medicare, Medicaid, and SCHIP Extension Act of 2007 requires health insurers and third-party administrators (TPAs) to submit data to the Centers for Medicare and Medicaid Services (CMS) identifying situations where the group health plan is secondary to Medicare. Effective January 1, 2009, certain data elements must be reported to CMS on a quarterly basis. The penalty for failing to report the required data elements is $1,000 per person per day for which the data should have been submitted. Report Link Practical Insights - Non-Profits: Hidden Insurance Contracts Are a Problem for Your Tax Sheltered Annuities.Ford & Harrison LLP - September 12, 2008 Tax-exempt employers have offered tax sheltered annuities to employees for years. Traditionally, the employers would often assume only a nominal role. No formal plan document would be drawn, and the only written instruments would be one or more annuity contracts (or custodial accounts) entered into directly by the employee with an insurance company or bank custodian. The employer would then withhold money from the employee’s paycheck and deposit it with the insurance company or custodian for the employee’s account. Until paid out, the money deposited is income tax free and accrues interest tax free. Report Link U.S. Supreme Court Rules In Key Benefit Cases.Ogletree Deakins - August 05, 2008 In the closing days of its most recent term, the U.S. Supreme Court issued two decisions relating to the design and administration of employee benefit plans. The first, Metropolitan Life Insurance Company v. Glenn, addressed (without giving significant guidance) the question of whether a conflict of interest exists when a plan administrator who decides questions of eligibility for benefits is also the person responsible for paying any benefit claims, and the effect of such a conflict on a reviewing court's analysis. The second, Kentucky Retirement Systems v. EEOC, addressed the question of whether a pension plan's failure to increase benefits to disabled retirees once they reach normal retirement age (but continue working) violates the Age Discrimination in Employment Act (ADEA). Report Link Same-Sex Marriages: What Do They Mean for Your Benefit Plans?Fisher & Phillips, LLP - July 03, 2008 On May 15 of this year, the California Supreme Court held that same-sex couples must be permitted to legally marry in California. According to the decision, the failure to designate the relationship of a same-sex couple as a marriage violates the equal protection clause of the California Constitution. When the decision takes effect on June 14, 2008, California will join Massachusetts as the only states that recognize same-sex marriages. Report Link Supreme Court Rules on Judicial Review of ERISA Benefit Claims.Vedder Price - June 26, 2008 On June 19, 2008, the Supreme Court
issued a fractured (5–1–1–2) decision in
MetLife Insurance Co. v. Glenn, ruling
that employee benefi t plan
administrators who both make benefi t
decisions and pay benefi t claims under
a plan covered by the Employee
Retirement Income Security Act of 1974
(ERISA) operate under a confl ict of
interest that must be weighed as a
factor upon judicial review. However,
the Court failed to provide a uniform and
predictable framework for judicial review
of confl icted decisions, holding instead
that the weight given to the confl ict will
vary according to the particular “facts
and circumstances” of each case. The
ruling has implications for insurers and
sponsors of self-funded plans. Report Link Supreme Court Sides With Employee In Benefits Denial Claim.Fisher & Phillips, LLP - June 20, 2008 The Supreme Court confirmed that a conflict of interest exists where "dual-role" employee benefit plan administrators have the authority to both evaluate and pay claims. More importantly, the Supreme Court also clarified how the conflict of interest should be weighed on review of a plan administrator’s discretionary benefit denial. Report Link Gearing Up For A Downturn - A Primer On Key Benefits Issues Webinar (Power Point Presentation).Ogletree Deakins - June 09, 2008 In this webinar, the Employee Benefits and Executive Compensation Practice Group of Ogletree Deakins covers the latest Benefits issues affecting employers. Report Link IRS Says Tax Rebates May be Withdrawn from Tax-Favored Accounts Without Penalty.Ford & Harrison LLP - May 12, 2008 The Internal Revenue Service has announced that individuals who had their “tax rebates” directly deposited into Individual Retirement Accounts (IRA) and other tax-favored accounts may withdraw those “rebate” amounts without liability for either income tax or penalties. Report Link IRS Changes the Rules for Performance-Based Compensation.Littler Mendelson, P.C. - May 01, 2008 Recent changes to the way in which the Internal Revenue Service (IRS) interprets "performance-based compensation" under Internal Revenue Code (IRC) Section 162(m) have narrowed the types of arrangements that may be classified as performance-based and will require publicly-held companies to reexamine these arrangements or jeopardize the financial soundness of current tax and financial planning methodologies. Report Link Proposed Rule Clarifies Prohibition on Employer Incentives to TRICARE Beneficiaries.Littler Mendelson, P.C. - April 25, 2008 As expected, the Department of Defense (DoD) has issued proposed regulations regarding the coordination of employer-provided group health care and TRICARE. TRICARE is a U.S. Government-sponsored group health program providing benefits to retired military personnel and their dependents. In general, the proposed rule seeks to clarify an earlier TRICARE amendment that prohibits an employer from offering financial or other benefits to TRICARE beneficiaries as incentives not to enroll or to terminate enrollment in a group health plan that would be primary to TRICARE. The proposed rule's retroactive effective date is January 1, 2008. Report Link Court Reminds Employers to Follow "Lock In" Letters for Employees' Income Tax Withholdings.Littler Mendelson, P.C. - April 01, 2008 A United States district court in Pennsylvania recently held that employers are obligated to follow an IRS "lock in" letter, and, as a result, cannot be held responsible by the employee for following the IRS's instructions. This case serves as a reminder that employers should follow employees' instructions on withholding, but should immediately implement any "lock in" letters it receives. Report Link A Safe Harbor for Small Plans: The DOL Proposes New Regulations Regarding Participant Contributions.Ford & Harrison LLP - March 27, 2008 On February 29, 2008, the Department of Labor (“DOL”) proposed new regulations addressing when participant withholdings would become “plan assets.” Report Link IRS Establishes Cross Divisional Team to Combat Improper Tool Reimbursement Plans.Littler Mendelson, P.C. - February 14, 2008 The IRS has established a new cross divisional team comprised of members from the audit examination, appeals and legal departments to address the IRS's ongoing efforts to combat improper tool reimbursement plans. This issue has drawn significant IRS scrutiny for the last several years due to the aggressive marketing of such plans to employers, particularly in industries such as automotive, construction, aircraft, agriculture and others that use significant hand tools. Employers should be wary of such plans and carefully determine whether they comply with IRS regulations. Report Link U.S. Supreme Court to Review Conflict of Interest Standard in ERISA Plan Administrators’ Benefit Determinations.Ford & Harrison LLP - January 24, 2008 In a decision that could significantly impact ERISA plan administrators, the U.S. Supreme Court has granted certiorari in Metlife v. Glenn (U.S., No. 06-923, cert. granted 1/18/08), a case in which the Sixth Circuit reversed the decision of a plan administrator denying benefits under a long term disability plan. In Metlife, the Supreme Court will determine whether the Sixth Circuit erred when it held that the fact that an ERISA plan administrator also funds plan benefits, without more, constitutes a conflict of interest that should be considered by courts in reviewing a plan administrator’s benefit determination. Additionally, if the Court determines that this situation creates a conflict of interest, it will address how that conflict should be taken into account by a court reviewing a discretionary benefit determination. Report Link New Distribution Alternative Required Under Certain Qualified Plans.Fredrikson & Byron, P.A. - January 10, 2008 Beginning in 2008, all plans that have annuity distribution provisions (other than pure term-certain annuities) must offer an annuity alternative that provides for a life annuity for the participant with a survivor annuity for the participant’s spouse equal to either (i) 75 percent of the benefit payable during the participant’s lifetime if the normal form of annuity is a qualified joint and less than 75 percent survivor annuity or (ii) 50 percent of the benefit payable during the participant’s lifetime if the normal form of annuity is a qualified joint and 75 percent or greater survivor annuity. Report Link New Rules Permit 2% Shareholder-Employee To Deduct Employer-Paid Accident and Health Premiums and Reimbursements.Littler Mendelson, P.C. - January 03, 2008 On December 13, 2007, the Internal Revenue Service issued Notice 2008-1 providing rules under which a 2% shareholder-employee in an S corporation is entitled to an income tax deduction for accident and health insurance premiums that are paid or reimbursed by the S corporation and included in the 2% shareholder-employee's gross income. Report Link IRS Expands Medical Expense DeductionsLittler Mendelson, P.C. - December 17, 2007 The IRS recently issued Revenue Ruling 2007-72 expanding Internal Revenue Code Section 213(a) to allow a medical expense deduction for certain diagnostic procedures. Section 213(a) of the Code allows individuals to deduct medical care expenses which are not covered by insurance as long as the expenses exceed 7.5% of the individuals adjusted gross income. Group health plans and health flexible spending account plans often reference Section 213(a) to describe the type of benefits that may be covered by a plan. Report Link eBenefits Alert: A Year-End Summary of Significant Changes in Employee Benefits & Executive Compensation LawGray Plant Mooty - December 12, 2007 For professionals working in the areas of Employee Benefits & Executive Compensation, the wonder and anticipation of the holidays are always joined by two other year-end phenomena: effective dates and deadlines. This eBenefits Alert discusses the most significant changes in the employee benefits arena that you should be thinking about as 2007 becomes 2008. Links to more detailed discussions are included for some topics. Report Link The Final Word on Separation Pay Under Tax Code §409A (pdf).Ford & Harrison LLP - July 23, 2007 Separation pay is ubiquitous. It is paid as a post-termination benefit under employment agreements and written severance plans, as well as under unwritten programs, practices and other arrangements. Until §409A was added to the Internal Revenue Code, few thought of it as “deferred compensation.” But under §409A, if a legally binding right to separation pay is created in one year, and may be paid in another year, it constitutes non-qualified deferred compensation. Report Link IRS Will Not Challenge Local Lodging Expenses for Employees If Lodging Is Necessary to Participate in a Business Meeting or Function.Littler Mendelson, P.C. - July 06, 2007 In an about face from a position held for many years, the IRS recently announced that it would no longer challenge an employer's deduction for lodging expenses incurred by an employee in the metropolitan area where the person lived, provided that the lodging is necessary to take part in a meeting or other function of the employer. Report Link Employer Mandated Wellness Initiatives: Respecting Workplace Rights While Controlling Health Care Costs.Littler Mendelson, P.C. - May 08, 2007 This Littler Report discusses how far an employer can go toward mandating wellness in the workplace. With health care costs projected to double by 2016, reaching $4.2 trillion and representing 20 percent of every dollar spent, no employer can afford to leave this question unanswered. Health care costs and employer contributions toward health care premiums have increased to the level that they often determine whether a profit is made or whether the employer can continue in business. Employers are seeking new solutions to help curb these increases. This Report discusses whether mandatory wellness programs are viable options given the current state of law. Report Link The President's New Employment Tax Proposals Create Potential Challenges for Employers.Littler Mendelson, P.C. - April 03, 2007 How will the the President's 2008 budget proposal impact employer taxpayer compliance? Report Link Can An Employer Exclude Certain Classes of Employees From Health Plan Coverage? (pdf).Ford & Harrison LLP - December 04, 2006 As employer health plan costs continue to increase, many employers are considering not only whether to cutback on health benefits coverage, but also whether to exclude certain employees from the company’s plan altogether. In addition to cost, group health benefits are not a significant factor in recruiting or retaining employees in some industries, where increases in wages are the predominant concern. Report Link IRS Announces 2007 Cost of Living Adjustments For Retirement Plans.Jackson Lewis LLP - November 10, 2006 The Internal Revenue Service recently announced its cost-of-living adjustments applicable to dollar limitations for retirement plans and Social Security generally effective for Tax Year 2007 (see IR?2006-162). The adjustments to the dollar limits are as follows: Report Link Benefit Plans: 2007 Cost-Of-Living And Statutory Adjustments.Fredrikson & Byron, P.A. - November 03, 2006 The Internal Revenue Service has announced cost-of-living and statutory adjustments to certain employee benefit plan dollar limitations for 2007. Report Link . . . .with Liberty and Health Care for AllLittler Mendelson, P.C. - October 10, 2006 More than 10 years after President Clinton's health care plan failed to win Congressional approval and subsequent federal inaction, state legislatures and municipal governments across the country are stepping forward to regulate health care. One lesson of the failed Clinton plan is that wholesale change is not politically possible, in large part because there is no consensus on whether and how to create universal health care coverage. Governors, state legislatures and local governments have learned this lesson and are, instead, incrementally adopting elements of the Clinton plan along with numerous other reform proposals. Report Link Congress Enacts Sweeping Pension Legislation (pdf).Ogletree Deakins - August 07, 2006 On August 3, 2006, the Senate passed HR 4, which will be known as the Pension Protection Act of 2006 once it is signed into law. Report Link Federal Court Strikes Maryland's Health Care Mandate.Ford & Harrison LLP - July 21, 2006 A federal court in Maryland has held that Maryland's recently enacted "Fair Share Act" is pre-empted by federal law and, thus, unenforceable. Report Link IRS Paves Way for Better, Faster Account-Based Health Plans (pdf).Ogletree Deakins - July 20, 2006 Employers will have the tools to make their plans more efficient. Report Link Deadline for Qualified Plans Seeking IRS Determination Letter.Ford & Harrison LLP - June 16, 2006 The Internal Revenue Service (IRS) recently changed its procedures for seeking favorable determination letters for qualified retirement plans. For individually-designed plans, the IRS has created staggered five-year "cycles" for seeking favorable determination letters. For certain plans, the deadline for seeking a favorable determination is January 31, 2007. Click here for a summary of the new determination letter procedures. Report Link PBGC Finalizes Mandatory Electronic Filing.Ford & Harrison LLP - June 06, 2006 The Pension Benefit Guaranty Corporation (PBGC) has finalized rules that require defined benefit plans to make premium filings electronically. Report Link Handling Mutual Fund Settlement Proceeds (pdf).Ford & Harrison LLP - May 24, 2006 In several enforcement matters brought before the
Securities and Exchange Commission (“SEC”), the
SEC has awarded settlement funds to mutual fund
investors who have been harmed by alleged late trading
and market timing activities. Report Link Firms Expect Increase in Health Costs (pdf).Ford & Harrison LLP - April 06, 2006 Employers are bracing for another 8 percent rise in health benefit
costs in 2006 and 2007, according to a recent survey published
by Watson Wyatt Worldwide and the National Business Group on
Health. Report Link Benefit Plans: 2006 Cost-of-Living And Statutory Adjustments.Fredrikson & Byron, P.A. - November 11, 2005 The Internal Revenue Service has announced cost-of-living and statutory adjustments to certain employee benefit plan dollar limitations for 2006. The 2006 limitations are as follows: Report Link Impact of New Bankruptcy Act on Employee Benefit Plans (pdf).Vedder Price - July 05, 2005 The Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 (the “Act”), signed by
President Bush on April 26, 2005, includes a number
of provisions relating to employee benefit plans. This
article summarizes the major changes. Except as
otherwise noted, these changes are effective for
bankruptcy filings on or after October 17, 2005. Report Link 'Creative' Plan Limits Employer's Obligation To Pay Medical Expenses (pdf).Ogletree Deakins - June 03, 2005 The federal appellate court with jurisdiction over Illinois recently held that an employee’s spouse’s (or secondary) plan was responsible for a majority of her medical bills. Based on
the plain language of the health care plans at issue, the Seventh Circuit Court of Appeals found, the employersponsored plan was only required to pay $1,000 of the $160,000 in medical
expenses incurred by the employee. Report Link Employee Benefits Advisory: Automatic Rollover Requirements Apply Starting March 2005 (pdf).Hughes Hubbard & Reed LLP - December 22, 2004 All qualified plans will be required to comply with new automatic rollover
requirements for distributions made after March 27, 2005. Plan sponsors should
begin planning now in order to be in a position to comply with these requirements
when they become effective. Report Link Imminent Changes to Certain Tax Code Definitions May Impact Your Company's Employee Benefit Plans.Jackson Lewis LLP - November 24, 2004 The Working Families Tax Relief Act of 2004, signed by President Bush on October 4, 2004, among other things, amends the definition of "dependent" used in the Internal Revenue Code for various tax purposes. Report Link United Airlines' Pension Problem: Who, Ultimately, Is Going to Pay?Knowledge@Wharton (Reg Required) - September 09, 2004 United Airlines' proposal to halt payments to its pension funds suggests serious problems for the nation's pension-guarantee system, according to Wharton faculty and pension experts. The troubled airline, which declared bankruptcy in December 2002, said in July that it would stop funding its pension plans while it struggles to restructure under bankruptcy protection. The question is, how many other companies will renege on their pension obligations? And if the pension system collapses, will taxpayers foot the bill, just as they did for the S&L crisis in 1989?
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