The U.S. Supreme Court’s ruling this week in Hughes v. Northwestern University will do nothing to stem the rising tide of retirement plan fee litigation. But the ruling doesn’t mean fiduciary breach claims are more likely to be successful either. Instead, the Court kept its ruling very narrow: a broad investment menu with some prudent funds will not automatically mean the fiduciaries are off the hook for offering imprudent funds.
The plaintiffs in Hughes were participants in two 403(b) retirement plans sponsored by Northwestern University. The participants brought claims for breach of fiduciary duty against the University, the retirement plan committee, and the individuals who administered the plans. The participants alleged the fiduciaries breached their duty of prudence by: (1) allowing recordkeeping fees that were too high; (2) allowing plan investments with excessive investment fees; and (3) providing participants too many investment options (over 400!) which resulted in participant confusion and poor investment decisions.Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2022-01-28 12:51:222022-01-28 12:51:22The Tide is High…Keep Holding On For More Retirement Plan Fee Litigation
Last week, the US Supreme Court blocked the OSHA standard requiring private employers with 100 employees or more to vaccinate-or-test for COVID-19 from taking effect (more info here). With the fate of that standard likely sealed, employers may soon give thought to other strategies to incentivize workers to become vaccinated and/or boosted. Employers with self-funded health plans might consider charging unvaccinated (or unboosted) workers a higher premium for that health coverage. Or perhaps, it would be more appropriate to say “reconsider” that approach. Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2022-01-21 12:10:212022-01-21 14:30:26Talk About Bruno . . . Health Plan Premium Surcharges & Vaccination Status
The good news is that the deadline to furnish individuals with the Form 1095-C or Form 1095-B reporting health care coverage in 2021 has been extended to March 2, 2022. The bad news is that the days of good-faith relief are over. You better get them right this year!
Contrary to its stance taken in Notice 2020-76, the Internal Revenue Service (IRS) issued proposed regulations to permanently extend the due date for providing the Form 1095-C (applicable to large employers) and the Form 1095-B (generally applicable to insurance carriers) to participants. Employers and insurers can take advantage of the extension for the 2021 reporting season before the regulations become final. This does not, however, change the deadline for filing the forms with the IRS, which remains February 28, 2022 for paper submissions and March 31, 2022 for electronic filings. Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2022-01-12 14:34:522022-01-12 14:34:52No More Mister Nice Guy…No More “Good-Faith” Relief for ACA Reporting Requirements
The principles governing how ERISA plans determine a participant’s beneficiary haven’t changed much since the country singer George Strait sang “Write this down” in 1999. In short, the participant has to write it down … on the forms and following the procedures established by the plan.
Recently we’ve seen several examples of family members of deceased employees who are surprised by the plan’s record of who was designated as beneficiary. They have tried to argue that the deceased employee’s will should be allowed to designate a beneficiary, or that the plan should look to state laws regarding estates. However, the courts have clearly established that those extraneous sources do not affect the plan’s process. (Most famous are the U.S. Supreme Court’s 2001 Egelhoff decision, and its 2009 Kennedy v. DuPont decision.) Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2022-01-06 11:43:012022-01-06 11:43:43Write This Down … Participants Have to Follow the Plan’s Beneficiary Designation Procedures
Like Earth, Wind & Fire so wisely advised in 1975, “Sing a song, it’ll make your day.” Thanks to all of you who have read our blog throughout the year. We hope you have smiled at our goofy puns and perhaps even learned an interesting benefits bit or two. To remind you of the fun we’ve had and the things we’ve learned, please enjoy the playlist of the songs we used in our 2021 blogs. See you in 2022!
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2021-12-28 12:50:272021-12-28 12:50:27Sing a Song … To Celebrate 2021 and Look Forward to 2022!
Some years ago, I published an article on the importance of understanding the tax rules applicable to equity grants, with a particular focus on being aware of the timing rules for filing an 83(b) election and the importance of making timely elections (available here).
A reader of that 83(b) article approached me recently looking for guidance on when an individual may make an 83(b) election with respect to a stock option. The question was simple – do you make the 83(b) election within 30 days of the grant of the option or within 30 days of exercise of the option? Read more
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2021-12-16 15:47:452021-12-16 17:18:07What About Now? – 83(b) Tax Rules Applicable to Early Exercise of Stock Options
Earlier this fall, the Office for Civil Rights (OCR) issued guidance to help the public understand when a business or employer can request information on an individual’s COVID-19 vaccination status without violating the HIPAA Privacy Rule. This blog addresses the impact of the HIPAA Privacy Rule only. Note there may be other federal or state laws that may apply resulting in a different conclusion.
The HIPAA Privacy Rule does not apply to employment records and generally does not regulate what information can be requested by an employer from employees as part of the terms and conditions of employment that an employer may impose on its workforce. For example, the HIPAA Privacy Rule does not prohibit an employer from requiring or requesting each workforce member to:
Provide documentation of their COVID-19 or flu vaccination.
Sign a HIPAA authorization for a covered health care provider to disclose the workforce member’s COVID-19 vaccination record to their employer.
Wear a mask while in the employer’s facility, on the employer’s property, or in the normal course of performing their duties at another location.
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2021-12-07 14:05:352021-12-07 14:05:35Ooh Baby It’s a Wild World…Your Vaccination Status: What Does HIPAA Actually Protect and Prohibit
The Tide is High…Keep Holding On For More Retirement Plan Fee Litigation
/in 401(k) Plans, 403(b) plans, 457(b) plans, ERISA, Fees, Fiduciary Duties, Investments, Litigation, Retirement Plansby Brenda Berg
The U.S. Supreme Court’s ruling this week in Hughes v. Northwestern University will do nothing to stem the rising tide of retirement plan fee litigation. But the ruling doesn’t mean fiduciary breach claims are more likely to be successful either. Instead, the Court kept its ruling very narrow: a broad investment menu with some prudent funds will not automatically mean the fiduciaries are off the hook for offering imprudent funds.
The plaintiffs in Hughes were participants in two 403(b) retirement plans sponsored by Northwestern University. The participants brought claims for breach of fiduciary duty against the University, the retirement plan committee, and the individuals who administered the plans. The participants alleged the fiduciaries breached their duty of prudence by: (1) allowing recordkeeping fees that were too high; (2) allowing plan investments with excessive investment fees; and (3) providing participants too many investment options (over 400!) which resulted in participant confusion and poor investment decisions. Read more
Talk About Bruno . . . Health Plan Premium Surcharges & Vaccination Status
/in Health & Welfare PlansBy Kevin Selzer
Last week, the US Supreme Court blocked the OSHA standard requiring private employers with 100 employees or more to vaccinate-or-test for COVID-19 from taking effect (more info here). With the fate of that standard likely sealed, employers may soon give thought to other strategies to incentivize workers to become vaccinated and/or boosted. Employers with self-funded health plans might consider charging unvaccinated (or unboosted) workers a higher premium for that health coverage. Or perhaps, it would be more appropriate to say “reconsider” that approach. Read more
No More Mister Nice Guy…No More “Good-Faith” Relief for ACA Reporting Requirements
/in Health & Welfare Plans, IRSby Becky Achten
The good news is that the deadline to furnish individuals with the Form 1095-C or Form 1095-B reporting health care coverage in 2021 has been extended to March 2, 2022. The bad news is that the days of good-faith relief are over. You better get them right this year!
Contrary to its stance taken in Notice 2020-76, the Internal Revenue Service (IRS) issued proposed regulations to permanently extend the due date for providing the Form 1095-C (applicable to large employers) and the Form 1095-B (generally applicable to insurance carriers) to participants. Employers and insurers can take advantage of the extension for the 2021 reporting season before the regulations become final. This does not, however, change the deadline for filing the forms with the IRS, which remains February 28, 2022 for paper submissions and March 31, 2022 for electronic filings. Read more
Write This Down … Participants Have to Follow the Plan’s Beneficiary Designation Procedures
/in 401(k) Plans, 403(b) plans, 457(b) plans, 457(f) plans, Defined Benefit Plans, Equity Compensation, ERISA, ESOPs, IRS, Retirement Plans, State Benefits Lawsby Elizabeth Nedrow
The principles governing how ERISA plans determine a participant’s beneficiary haven’t changed much since the country singer George Strait sang “Write this down” in 1999. In short, the participant has to write it down … on the forms and following the procedures established by the plan.
Recently we’ve seen several examples of family members of deceased employees who are surprised by the plan’s record of who was designated as beneficiary. They have tried to argue that the deceased employee’s will should be allowed to designate a beneficiary, or that the plan should look to state laws regarding estates. However, the courts have clearly established that those extraneous sources do not affect the plan’s process. (Most famous are the U.S. Supreme Court’s 2001 Egelhoff decision, and its 2009 Kennedy v. DuPont decision.) Read more
Sing a Song … To Celebrate 2021 and Look Forward to 2022!
/in UncategorizedLike Earth, Wind & Fire so wisely advised in 1975, “Sing a song, it’ll make your day.” Thanks to all of you who have read our blog throughout the year. We hope you have smiled at our goofy puns and perhaps even learned an interesting benefits bit or two. To remind you of the fun we’ve had and the things we’ve learned, please enjoy the playlist of the songs we used in our 2021 blogs. See you in 2022!
What About Now? – 83(b) Tax Rules Applicable to Early Exercise of Stock Options
/in Equity Compensation, Executive Compensation, IRSby Bret F. Busacker
Some years ago, I published an article on the importance of understanding the tax rules applicable to equity grants, with a particular focus on being aware of the timing rules for filing an 83(b) election and the importance of making timely elections (available here).
A reader of that 83(b) article approached me recently looking for guidance on when an individual may make an 83(b) election with respect to a stock option. The question was simple – do you make the 83(b) election within 30 days of the grant of the option or within 30 days of exercise of the option? Read more
Ooh Baby It’s a Wild World…Your Vaccination Status: What Does HIPAA Actually Protect and Prohibit
/in Health & Welfare Plansby Leslie Thomson
Earlier this fall, the Office for Civil Rights (OCR) issued guidance to help the public understand when a business or employer can request information on an individual’s COVID-19 vaccination status without violating the HIPAA Privacy Rule. This blog addresses the impact of the HIPAA Privacy Rule only. Note there may be other federal or state laws that may apply resulting in a different conclusion.
The HIPAA Privacy Rule does not apply to employment records and generally does not regulate what information can be requested by an employer from employees as part of the terms and conditions of employment that an employer may impose on its workforce. For example, the HIPAA Privacy Rule does not prohibit an employer from requiring or requesting each workforce member to:
Read more