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Changes to Employee Benefit Plans May Create Unforeseen Disclosure Deadlines

Believe it or not, it may be time to distribute a new Summary Plan Description (SPD) to include all changes made since the last issuance or a Summary of Material Modifications (SMM) for any amendments adopted during the 2018 plan year.

The IRS Reopens the Determination Letter Program for Merged Plans and Cash Balance Plans

On May 1, 2019, the IRS issued Revenue Procedure 2019-20, which reopens the determination letter program in a limited manner for individually designed plans that are merged plans or statutory hybrid plans, such as cash balance plans. The new IRS guidance provides that sponsors of merged plans may request determination letters going forward, while sponsors of statutory hybrid plans may request determination letters only during a limited window of time. The effective date of the new guidance is September 1, 2019.

University Settles Claims Involving Use of Retirement Plan Participant Data For Cross-Selling by Recordkeeper

Wrongful use of retirement plan participant data was among the claims made by a class of 40,000 participants against the plan sponsor and others in Cassell et al. v. Vanderbilt University et al. Specifically, the plan participants claimed that the University inter alia breached its “loyalty and prudence” duty by failing to protect confidential employee retirement plan participant information, allowing the plan’s recordkeeper to obtain access to participant’s personal information and to profit from that access.

HIPAA Penalties Change Under HHS Notice of Enforcement Discretion

When the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 became law, it made significant changes to the civil monetary penalties for violations of HIPAA. In addition to increasing the amounts of the penalties, HITECH created a tiered approach to penalties, establishing four categories based on levels of culpability. In addition, current HHS regulations apply the same cumulative annual penalty limit across these four categories. Today, the Department of Health and Human Services (HHS) issued a notification of enforcement discretion changing its interpretation of HITECH resulting in a reduction in the amount of the cumulative annual penalty limit for three of the four categories.

Is Your Employer Worksite Medical Clinic a Group Health Plan?

Worksite medical clinics, some offering round-the-clock access to medical providers via telemedicine, seem to be growing in popularity. Promoters tout cost savings resulting from what would otherwise be lost productivity (employees whiling away afternoons waiting to see their private doctors or having to drive long distances to have blood drawn for routine laboratory work) and expenses otherwise borne by self-insured group health plans at a far higher cost per service. Some worksite clinics have existed for decades for reasons other than cost-savings – for example, to ensure immediate treatment is available to employees if work-related injuries or illnesses occur or as part of a workplace well-being program.

A Quick Form W-4 Reminder for Employers: May 10, 2019 Deadline for Updates

The Tax Cuts and Jobs Act (the “Tax Act”) significantly changed the federal income tax rules. Several of these changes impact income tax withholding, including changes to the tax rates and brackets, increasing the standard deduction, and eliminating personal exemptions.

THEY’RE HEEEEERRRREE!! But Have No Fear – Long Awaited Changes to EPCRS Are Good News for Plan Sponsors

Long on the wish list of practitioners and plan sponsors alike, self-correction of certain common plan document issues and loan failures is finally an option under the Internal Revenue Service’s Employee Plans Compliance Resolution System (“EPCRS”), newly minted via Rev. Proc. 2019-19.

IRS Offers Guidance on Applying Test for Deductibility of Parking Expenses

The Tax Cuts and Jobs Act of 2017 (TCJA) generally eliminated employer deductions for expenses incurred to provide employee parking benefits but left intact deductions for expenses associated with parking provided for customers and the general public. Because nondeductible employee parking expenses are often closely intertwined with deductible general public or customer parking expenses, employers may have difficulty distinguishing between the two under the TCJA.

IRS Clarifies Business Meal and Entertainment Deductions Following TCJA

The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the deduction for entertainment purchased as a business expense but left intact the deduction for business meals. Because entertainment and meals are often closely intertwined when purchased in a business context, taxpayers may have difficulty distinguishing deductible meal expenses from nondeductible entertainment expenses.

EIGHTH CIRCUIT RULES AGAINST THIRD PARTY ADMINISTRATOR IN CROSS-PLAN OFFSETTING IN GROUP HEALTH PLANS

On January 15, 2019, the federal Eighth Circuit Court of Appeals issued its decision in Peterson v. UnitedHealth Group, Inc., 913 F.3d, 769 (8th Cir. 2019), in which the Court upheld the federal district court’s holding that UnitedHealth Group, Inc. (“United”) was not authorized to reduce (or “offset”) payments to medical providers under ERISA group health plans for which United was the third-party administrator (or “TPA”) by the amounts United determined had been previously overpaid to the same providers under completely different group health plans also administered by United. This practice is known as “cross-plan offsetting.”