The Consolidated Omnibus Budget Reconciliation Act (“COBRA”) became law on April 7, 1986. For most of its nearly 35-year history, litigation involving COBRA has been relatively quiet. Most COBRA claims are tag-alongs, added as an afterthought to various sorts of discrimination claims, and a few cases involving the definition of “gross misconduct” (essentially the one narrow exception where an offer of COBRA coverage is not required).
In the wake of the pandemic, this is changing. Recently, there have been a number of cases filed (most filed as class actions) involving ...
The CARES Act, enacted on March 27, 2020, includes several provisions that change the rules for employee benefit plans, ranging from providing greater access to retirement benefits and HSA funds to offering funding relief to single-employer pension plans.
The CARES Act adds a new tax-favored withdrawal option that applies to the following types of retirement plans: IRAs, qualified plans (e.g., profit sharing and 401(k) plans), 403(a) and (b) plans, and 457(b) governmental plans. The withdrawal is permitted only if it is a Coronavirus-related distribution, which is defined as a ...
Most blog entries focus on new developments or recent legislation. This one’s a bit different. Its subject matter, fiduciary responsibility, is as old as ERISA itself. In today’s environment of increased litigation risks for plans, it’s critically important to dust off these rules and review these fundamental obligations applicable to all ERISA plan fiduciaries.
ERISA imposes a few specific duties on fiduciaries:
- Loyalty (also called the “exclusive benefit” rule) – the duty to act solely for plan participants and beneficiaries
- Prudence – the obligation to act ...
A December 27, 2019 post to this blog by Jon Nason provided an overview of the many changes affecting retirement plans made by the SECURE Act, which was enacted as part of the Further Consolidated Appropriations Act of 2020 on December 20, 2019. Today’s post takes a deeper dive into one of the key changes.
Division O § 112 of the SECURE Act requires that 401(k) plans extend eligibility for making elective deferral contributions to certain long-term part-time employees. Because this change is mandatory, it is important for employers to understand how it will affect their 401(k) plan as ...
In the summer of 2019, I wrote a short blog on the death of the PCORI fee -- Ding, Dong, the PCORI Fee is Dead!. When enacted as part of the Affordable Care Act, the fee was set to expire with plan/policy years ending after September 30, 2019.
The Further Consolidated Appropriations Act, 2020, signed by President Trump on December 20, 2019, extended the PCORI fee for another ten years. The fee is now set to expire with plan/policy years ending after September 30, 2029.
So, Ding, Dong, the PCORI Fee is NOT Dead!
On June 13, the Departments of Labor, Treasury and Health and Human Services jointly released final regulations dealing with health reimbursement accounts (“HRAs”). These regulations fulfill the Trump administration’s directive to “increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.”
Background.
HRAs are employer-funded account-based plans from which employees may be reimbursed for qualifying medical expenses. HRAs, like other account-based plans ...
On April 29, 2019, the United States Department of Labor (the “DOL”) released a policy statement providing transitional relief from the potential adverse consequences arising from a District Court’s vacating portions of the DOL’s regulations on the alternative test of the definition of “employer” for Association Health Plan (“AHP”) purposes.
By way of background, on June 21, 2018, the DOL published regulations which established an alternative test that described in prior DOL guidance as to who can sponsor an ERISA-covered AHP as an “employer” (the ...