In response to comments from various organizations representing employers, plans, recordkeepers, and other service providers, the U.S. Department of Labor (“DOL”) published a rule revising the timeframe for administrators to provide certain expense and investment annual disclosures to individuals participating in “participant-directed individual account plans” (e.g., 401(k) plans and 403(b) plans). If implemented, the rule requires that participants receive the annual disclosures at least once in a 14-month period. The current rule calls for the annual disclosures at least once every 12 months.
Articles about the Employee Retirement Income Security Act (ERISA) and other issues relating to employee benefit topics
Federal Agencies Issue Final Regulations Expanding Definition of Excepted Benefits to Cover Certain Types of Limited Wraparound Coverage
On March 16, 2015, the U.S. Departments of Labor, Health and Human Services, and Treasury finalized regulations that would treat certain limited health coverage that wraps around eligible individual health insurance or multi-state plan coverage offered by the U.S. Office of Personnel Management (OPM) as an “excepted benefit.” Excepted benefits are exempt from numerous requirements generally applicable to group health plans, including the requirements of HIPAA and the insurance market reforms of the Affordable Care Act (ACA).
White House and DOL Begin Revised Fiduciary Rule Marketing Campaign
On Monday, the White House and the Department of Labor publicized efforts to target conflicts of interest in managing employee retirement funds. In essence, the Administration is promoting the DOL’s much–beleaguered proposal to more broadly define who constitutes a “fiduciary” for the purposes of rendering investment advice under the Employee Retirement Income Security Act (ERISA). According to a White House fact sheet, the DOL will issue its proposed fiduciary rule in the coming months. Notably, the agency withdrew its initial fiduciary rule in 2011 after the proposal faced significant opposition from the employer community.
House Votes to Repeal the Affordable Care Act
In a message vote, the Republican-led House of Representatives elected to repeal the Affordable Care Act in its entirety. The move is considered symbolic, as the Senate lacks the 60 votes needed to avoid an almost certain filibuster, and the President has vowed to veto any repeal measure. The final vote on H.R. 596 was 239 to 186 along party lines.
Senate Hearing Discusses Affordable Care Act Definition of “Full-Time”
During the first employment-related hearing conducted by the new Senate Committee on Health, Education, Labor and Pensions (HELP), Senators and panelists debated whether the Affordable Care Act’s definition of “full-time” employment should be amended. Under the healthcare law’s employer responsibility requirements, employers with at least 100 full-time or full-time equivalent employees are now required to provide health insurance meeting certain ACA standards to their full-time employees or pay a penalty. For employers with 50 to 100 full-time employees, this pay-or-play employer mandate becomes effective in 2016. The ACA considers a worker “full time” if he or she works 30 hours or more per week, instead of the customary 40 per week.
House Approves New ACA Amendment
Continuing its efforts to chip away at the Affordable Care Act, the House of Representatives on Monday voted 401-0 to exempt emergency service volunteers from the 50-employee threshold triggering the healthcare law’s pay-or-play mandate. Last week, the House unanimously approved a similar measure exempting veterans covered under TRICARE or comparable insurance from being counted as an employee for ACA’s shared responsibility purposes. As of January 1 of this year, employers with at least 100 full-time or full-time equivalent employees must provide health insurance that meets certain ACA standards to their full-time employees, or pay a penalty. This floor will be lowered to 50 or more employees on January 1, 2016.
Heads Up – The ACA Employer Mandate Is Now In Effect: Beware of Actions that Could Result in ACA Whistleblower Liability
Executive Summary: Effective January 1, 2015, certain employers became subject to the employer mandate of the Patient Protection and Affordable Care Act (ACA), and thus subject to liability under the ACA Employer Shared Responsibility provisions. Specifically, effective January 1, 2015, employers with at least 100 full-time employees, including full-time equivalents, became subject to a penalty if: 1) they fail to offer minimum essential coverage to substantially all of their full-time employees and their dependents, 2) if they fail to offer coverage that provides minimum value and is affordable to all full-time employees and their dependents, and 3) any full-time employee receives a tax credit or subsidy through a government health care exchange.
House Passes 40-Hour Workweek Bill, but Enactment Far From Certain
On Thursday, the House of Representatives readily approved by a vote of 252-172 the Save American Workers Act of 2015 (H.R. 30), a bill that would increase from 30 to 40 the number of hours an employee must work per week to be considered “full-time” under the Affordable Care Act (ACA). How many employees are considered full-time under the ACA is important for determining whether the employer meets the 50-employee threshold triggering the law’s pay-or-play shared responsibility mandate. Critics of the ACA’s 30-hour-per-week definition have claimed it will encourage employers to reduce employee hours and/or hiring in order to remain below the pay-or-play mandate floor. While changing the definition has received some bipartisan support, the bill still must clear a Senate hurdle and the President’s veto pen.
House Approves Bill Exempting Certain Employees from ACA Threshold
As expected, the 114th Congress began its term by attacking provisions of the Affordable Care Act (ACA). On Tuesday, the House of Representatives voted unanimously in favor of the Hire More Heroes Act of 2015 (H.R. 22), a bill that would exempt employees covered under TRICARE or other health insurance provided by the Veterans Administration from being counted toward the Affordable Care Act’s 50-employee employer mandate threshold. Under the healthcare law’s employer responsibility requirements, an employer with at least 100 full-time employees (including full-time equivalent employees) will be required to provide health insurance that meets certain ACA standards to their full-time employees starting in 2015, or pay a penalty. For employers with 50 to 100 full-time employees, this pay-or-play employer mandate becomes effective in 2016. Employees falling under the categories specified in the Hire More Heroes Act would not count toward these thresholds. Given the new composition of the Senate, it is possible this measure will clear that chamber as well.
Proposed Regulations Would Expand Definition of Excepted Benefits to Cover Certain Types of Limited Wraparound Coverage
On December 19, 2014, the U.S. Departments of Labor, Health and Human Services, and Treasury published proposed regulations that would treat certain limited health coverage that wraps around eligible individual health insurance or multi-state plan coverage offered by the U.S. Office of Personnel Management (OPM) as an “excepted benefit.” Excepted benefits are exempt from numerous requirements generally applicable to group health plans, including the requirements of HIPAA and the insurance market reforms of the Affordable Care Act (ACA).
Ninth Circuit Reverses Course in ERISA Case
In a previous ASAP article, we discussed the Ninth Circuit’s June 6, 2014 decision in Gabriel v. Alaska Elec. Pension Fund, 755 F.3d 647 (9th Cir. 2014). In the initial opinion issued by the court, the panel split 2-1 in affirming a district court’s ruling that the appellant was not entitled to ongoing retirement benefits, even though the relevant pension fund had provided those benefits for three years prior to the parties becoming involved in litigation. The court initially held that the remedy sought by the appellant—called equitable surcharge—was unavailable to him under ERISA. See 11 U.S.C. § 1132(a)(3); ERISA § 502(a)(3). Pursuing that relief, the initial opinion stated, was contrary to the limited equitable relief regime set forth in the remedial provisions in the statute. In a strenuous partial dissent, Judge Marsha Berzon wrote that the panel had misconstrued the Supreme Court’s decision in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), misread the Ninth Circuit’s earlier cases, and in fact had triggered a circuit split on the issue of equitable surcharge.
The Affordable Care Act and Staffing: One Size Does Not Fit All
Since its enactment in 2010, the Affordable Care Act (ACA) has generated debate and questions about the law’s impact on third-party staffing arrangements. With the effective date of the ACA’s “pay-or-play” employer mandate just weeks away for many employers, confusion still exists about how “staffing firms” and their clients should prepare. This task is complicated by the fact that numerous staffing operational models exist and call for different approaches. The lack of clear definitions regarding staffing relationships in the IRS final rule1 implementing the employer mandate under Section 4980H of the Code2 (Final Rule) further complicates the issue. Synchronizing the vague definitions in the Final Rule with the varying models for staffing firms is needed to provide a better understanding of how staffing companies and their clients should respond.
ACA Outlook: What Will 2015 Hold for the Affordable Care Act and Employers?
For many employers, the effective date of the Affordable Care Act’s “play-or-pay” mandate is only weeks away. The impending deadline comes amid questions about the future—and perhaps viability—of the law itself. Entering 2015, the ACA faces challenges both in a new Republican-controlled Congress and in the Supreme Court. Yet, the political and legal uncertainty surrounding the ACA should not deter employers from ensuring they are prepared for the “play-or-pay” mandate and other upcoming requirements.
“CRomnibus” Spending Bill Makes Significant Changes to Law Governing Multiemployer Pension Plans
The Multiemployer Pension Reform Act of 2014, part of the trillion-dollar government funding legislation (the so-called “CRomnibus” bill) approved by the House of Representatives on December 11, the Senate on December 13, and signed by President Obama on December 16, makes significant changes to the law governing multiemployer pension plans. Some of the most important changes are summarized below.
Ninth Circuit Rules Assignee Health Care Providers May Sue Health Plans Under ERISA for Payment of Benefits
In an opinion with mixed implications for both insurers and health care providers, the U.S. Court of Appeals for the Ninth Circuit recently ruled that when plan beneficiaries assign their claims for payment of benefits to their health care provider, the provider has standing to sue the health plan under ERISA. Importantly, however, the court also held in Spinedex Physical Therapy v. United Healthcare of Arizona, Inc. No. 12-17604, 2014 U.S. App. LEXIS 21132 (9th Cir. Nov. 5, 2014) that anti-assignment provisions in health plans are enforceable. Additionally, the court held that, as written, the assignments only encompassed claims for benefits, not for breach of fiduciary duty.