Category Archives: Employee Benefits/ERISA

EMPLOYEE BENEFITS: WHAT IS THE OFFICIAL PLAN DOCUMENT?

We have previously discussed The Importance of the Official Plan Document including the uncertainty of whether one document could perform double duty as “the Plan document” and the summary plan description (“SPD”). While it is still “not a sure bet” as to how the U.S. Supreme Court would rule, a recent ruling has held that the SPD can, in fact, be the governing plan document. Read More »

EEOC LOSES BATTLE, BUT MAYBE NOT THE WAR, OVER WELLNESS PROGRAMS

It is now a part of the strategic business plan for most employers to have implemented some form of wellness program for their employees.  These programs are intended to improve the health of employees with the goal of preventing sickness and motivating employees to lead healthier lives.  From the employer’s perspective, these programs are aimed toward the critical financial goals of decreasing (i) the rising cost of healthcare, (ii) illness related absenteeism, and (iii) reduced performance while at work.  Often, these programs include wellness screening tasks, including the collection of biometric data (height, weight, blood pressure, cholesterol, and blood glucose levels) to identify health risks.  It is estimated that 80% or more of employers with a wellness program screen their employees for evaluation and preventive interventions.  As part of the wellness landscape, however, the Equal Employment Opportunity Commission (EEOC) has been challenging employer wellness programs for allegedly violating the Americans with Disabilities Act (ADA). Read More »

THE STATUTE OF LIMITATIONS ROLLS ON FOR ERISA FIDUCIARIES’ DUTY TO MONITOR

On May 18, 2015, the U.S. Supreme Court in Tibble, et al. v. Edison International et al, unanimously held that there is a continuing duty under ERISA for fiduciaries to monitor and remove imprudent investments.  With this ruling, the Supreme Court vacated a 9th Circuit case which had held that, under ERISA’s 6-year statute of limitations, a claim alleging a breach of fiduciary duty concerning a plan investment initially selected outside the 6-year statutory period could only be brought if there was a change in circumstances which would trigger a fiduciary to re-examine the fund’s inclusion in the plan.  The Supreme Court ruling also – in effect – reversed similar prior rulings in the 4th and 11th Circuits.  Essentially, for all intents and purposes going forward, the Supreme Court ruling in Tibble provides for a rolling 6-year fiduciary liability window for a violation of the continuing duty to monitor investments. Read More »

SUPREME COURT RULES NO “THUMB ON THE SCALE” FAVORING LIFETIME RETIREE HEALTH BENEFITS

The Supreme Court of the United States recently vacated a decision that made an employer responsible for the lifetime costs of its retirees’ health benefits, despite there being no language in the labor agreement with the union stating that the employer had this responsibility.  The Court sent the case back to the appellate court to determine whether the parties intended for the employer to pay for all of the retiree health care costs in perpetuity.Banner_Benefits%20Calculator_iStock_000018547355LARGE

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EMPLOYEE BENEFITS: THE IMPORTANCE OF THE OFFICIAL PLAN DOCUMENT

“Every employee benefit plan shall be established and maintained pursuant to a written instrument.”  That is the first sentence in ERISA’s fiduciary responsibility provision.  The ERISA-mandated “written instrument” – the official plan document – is a powerful document; it defines the employer’s contractual undertaking with respect to the plan’s participants.  In recent decisions, courts have distinguished between a writing that is enforceable as “the plan” and other plan-related instruments such as the summary plan description (“SPD”), an insurance policy, or an administrative services agreement (“ASA”).

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AFFORDABLE CARE ACT SWITCHING FROM COBRA TO MARKETPLACE COVERAGE – ANOTHER OPPORTUNITY

The first open enrollment period for obtaining health coverage through the ACA’s Health Insurance Marketplace ended on March 31, 2014.  That means that individuals without coverage can no longer obtain private coverage through the Marketplace for 2014 unless they are eligible for special enrollment by virtue of having a “qualifying life event.”  Qualifying events for purposes of COBRA are also “qualifying life events” under the Marketplace rules.  So, for example, a participant in an employer-sponsored group health plan who loses coverage under the plan due to termination of employment (other than for gross misconduct) is eligible for COBRA coverage or may purchase Marketplace coverage in lieu of COBRA.  This “special enrollment event” for Marketplace coverage is available for 60 days from the time coverage under the employer’s group health plan ends.

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EMPLOYER BENEFITS PLANS: HEALTH FLEXIBLE SPENDING ACCOUNTS JUST GOT MORE FLEXIBLE

Good news may be on the horizon for those employees who find they are scrambling to buy an extra pair of glasses or rush to the dentist in order to spend the remaining funds in their Health Flexible Spending Account (HFSA or FSA) before the end of the plan year.  On October 31, 2013, the IRS released Notice 2013-71 which modifies the “Use-or-Lose” rule for Health FSAs.  Beginning immediately, employers may amend their Section 125 cafeteria plans to permit employees to carryover up to $500 in unused funds into the next plan year.  Read More »

MODEL COBRA ELECTION NOTICE REVISED TO REFLECT ACA PROVISIONS

In May 2013, the U.S. Department of Labor (“DOL”) issued a guidance and a revised model COBRA election notice in anticipation of the approaching effective date of the insurance exchanges required by the Affordable Care Act (“ACA”).  Specifically, beginning on January 1, 2014, individuals and employees of small businesses will have access to coverage through a new private health insurance market known as the Health Insurance Marketplace.  Open enrollment for health coverage through Marketplace began on October 1, 2013.   Read More »

THE AFFORDABLE CARE ACT: TWO NEW EMPLOYER RESPONSIBILITIES WENT INTO EFFECT ON OCTOBER 1, 2013

As this article is being written there is much uncertainty surrounding the “Patient Protection and Affordable Care Act (PPACA)” aka the “Affordable Care Act (ACA)” aka “Obamacare.” Whatever you call it, barring a major change, there are two steps that employers must take now to remain in compliance with the law as it is currently written.  Beginning October 1, 2013, all employers subject to the Fair Labor Standards Act (FLSA) must provide a notice to new and current employees regarding coverage options available through a health insurance “Marketplace” (previously called an “Exchange”), as a part of the ACA.  Employers should be aware that notification of the marketplace is required regardless of whether they offer health insurance to their employees or not. 

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U.S. AIRWAYS, INC. V. MCCUTCHEN: SCOTUS SAYS ENFORCEMENT OF ERISA PLAN TERMS IS NOT “INEQUITABLE”

Employer-sponsored group heath plans typically allow reimbursement to the plan for benefits paid in connection with injuries sustained as a result the tortious conduct of a third party.  That right of reimbursement arises when the injured plan participant obtains a recovery against the tortfeasor and is enforceable, as an equitable lien by contract, against the proceeds of any recovery.  Plan terms also, as an alternative remedy, subrogate the plan to the rights of the injured participant and allow the plan to pursue the participant’s tort claim in its own name.  Read More »