The SEC recently published Compliance and Disclosure Interpretations (“C&DIs“) relating to the CEO pay ratio disclosure rule. This disclosure rule under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires a public company to disclose the ratio between its CEO’s annual compensation and the median annual compensation of all other employees. The new C&DIs include guidance on the selection of an appropriate alternative compensation measure and clarify that if an alternative compensation measure is utilized to determine the median employee, the time period utilized does not have to be a full annual period. Moreover, the time period utilized does not have to include the date on which the employee population was determined. View our prior post on the SEC’s adoption of the CEO pay ratio disclosure rule here. View the full text of the C&DIs here.
Earlier this month, we provided information regarding the IRS’s release of final Forms 1094 and 1095 and instructions for the 2016 Affordable Care Act (“ACA“) reporting year, which is available here. A more in-depth look at the changes to the ACA’s shared responsibility reporting requirements is available on our new companion blog, HB Health and Welfare. HB Health and Welfare provides more details regarding health and welfare benefits topics of interest, and also provides information about upcoming speaking engagements by Haynes and Boone’s benefits lawyers.
The IRS recently released final instructions for the 2016 Forms 1094 and 1095. Highlights of the changes and clarifications included in the final instructions are provided below. While a of the few items are “neutral” and merely reflect pre-programmed changes under the Affordable Care Act that were already known and set to occur, many of the changes and clarifications are welcome news. Form 1094-B Highlights There are no substantive changes for 2016. View the 2016 Form 1094-B here. Form 1095-B Highlights The statement, “Do not attach to your tax return. Keep for your records.” was inserted underneath the main heading, suggesting that the form will continue to not be required for direct substantiation purposes as part of a personal income tax filing in the future. Part I, Lines #2 and #3 and Part IV, columns (b) and (c) have been updated to reflect that TINs may be substituted for SSNs.… Continue Reading
Institutional Shareholder Services Inc. (“ISS”) recently released the results of its annual global voting policy survey. Respondents include institutional investors, corporate issuers, as well as consultants and advisors to public companies. Survey responses provide helpful insight into the current views of influential institutional investors in addition to signaling changes to ISS voting policies. This year’s survey was light on executive compensation related questions but did provide helpful feedback on two topics. (1) Frequency of Say-on-Pay: 66 percent of institutional investors favor annual say on pay votes, consistent with current ISS policy. (2) Pay for Performance Metrics: 79 percent of institutional investors support the incorporation of financial metrics, in addition to total shareholder returns, into the ISS pay-for-performance models that identify potential misalignments between CEO pay and company performance. The three most popular alternatives were return on investment metrics (e.g., return on invested capital), return metrics (e.g., return on assets or… Continue Reading
A HIPAA Notice of Privacy Practices must be provided to new group health plan participants at the time of enrollment and within 60 days of a material revision. In addition, participants must be notified of the availability of the notice at least once every three years. This requirement can be satisfied by distributing either a copy of the notice or a reminder of the availability of the notice. A reminder of the availability of the notice can be included in annual enrollment materials or other plan publications sent to all participants. For example, group health plans that distributed a new Notice of Privacy Practices in 2013 when the final HIPAA regulations were issued should ensure they have satisfied this reminder requirement in 2016.
As a service to energy industry participants, the lawyers of the Oilfield Services and Bankruptcy Practices at Haynes and Boone, LLP have been tracking and reporting industry developments in oilfield service restructurings. Our research includes details on 100 bankruptcies filed since the beginning of 2015, including secured and unsecured debt totals for each case. The total amount of aggregate debt administered in oilfield services bankruptcy cases in 2015- 2016 is more than $14 billion and the average debt of these cases exceeds $144 million. The largest reported bankruptcy cases involve total debt of approximately $2.7 billion (Vantage), $2.5 billion (Paragon Offshore), $1.7 billion (Seventy Energy), $1.3 billion (Hercules Offshore) and $1.3 billion (C&J). The latest Oilfield Services Bankruptcy Tracker Report is available here. Full link: http://www.haynesboone.com/~/media/files/attorney%20publications/2016/ofstracker.ashx
Federal District Court in Texas Rules on Cigna’s “Fee Forgiveness” Protocol in the Administration of Medical Benefit Claims
The U.S. District Court for the Southern District of Texas recently ruled on motions for summary judgment by both parties in North Cypress Medical Center Operating Company, Ltd v. Cigna Healthcare, holding that Cigna’s application of its “fee forgiveness” protocol (the “Protocol”) in the administration of benefit claims for medical services rendered by North Cypress was legally incorrect and constituted an “abuse of discretion” under ERISA. Cigna performed claims administration services as a third-party service provider for employer-sponsored, self-funded group medical plans and as the insurer under employer-sponsored, fully-insured group medical plans (collectively, the “Plans”). North Cypress was an out-of-network healthcare services provider (an “OON Provider”) that offered to waive or discount patients’ cost-sharing obligations in exchange for prompt payment for its billed services. When North Cypress submitted the patients’ benefit claims to Cigna, Cigna applied the Protocol, which significantly reduced or denied the claim payments to North Cypress based… Continue Reading
On September 29, 2016, the IRS released Rev. Proc. 2016-51, which sets forth the comprehensive Employee Plans Compliance Resolution System (“EPCRS“) and supersedes Rev. Proc. 2013-12 (i.e., the most recent comprehensive statement of EPCRS). The modifications to EPCRS made by Rev. Proc. 2016-51 were primarily ministerial (e.g., making certain changes in response to modifications made to the IRS’s determination letter program). One noteworthy change, which will become effective January 1, 2017, is that the IRS will no longer refund 50% of the user fee in connection with anonymous voluntary correction program submissions for which an agreement cannot be reached. View Rev. Proc. 2016-51.
The IRS has issued a guide for electronically filing ACA information returns (i.e., Forms 1094/1095). Employers who submit their own Forms 1094/1095 through the AIR System may want to review this guide in preparation for filing in January 2017. The IRS also issued the 2016 instructions and final forms for Forms 1094-B and 1095-B, with minor changes from the 2015 versions.
The DOL issued a press release announcing its recent settlement with fiduciaries of a group health plan (the “Plan”) sponsored by Sierra Pacific Industries, a major western lumber producer. The press release followed the conclusion of a DOL investigation that determined the Plan did not comply with the Affordable Care Act (“ACA”) and ERISA in certain respects. In particular, the DOL found problems with the Plan’s claims processing, with the clarity of the Plan’s documents, and with the application of the Plan’s procedures for deciding claims. In addition, the DOL found the Plan had been administered erroneously under ACA “grandfathered status” since January 1, 2013. As a result of this investigation, the Plan’s fiduciaries agreed to (i) revise the Plan’s documents and internal procedures; (ii) re-adjudicate past claims for preventive services, out-of-network emergency services, claims affected by an annual limit, and pay claims in compliance with the ACA and ERISA;… Continue Reading