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Posthumous Abandonment Order is Ineffective as Spousal Waiver

An unmarried participant in a defined benefit plan designated his sister as beneficiary under the plan. When he later married, his spouse automatically became his beneficiary under the plan by operation of law, even though he did not change his beneficiary designation. When the participant died, his sister claimed that his spouse had abandoned him within the meaning of local law. The sister asserted that the abandonment terminated the requirement that the participant obtain spousal consent to designate a beneficiary other than his wife. The district court denied her claim, and held that for abandonment to waive a spouse?ÇÖs rights under ERISA, the participant must have a court order to such effect, and the order must be obtained solely by the participant prior to his death. A posthumous court order of abandonment obtained is ineffective under ERISA. Thomas v. Community Renewal Team Inc., No. 3:10-cv-01022-JCH (D. Conn. Mar. 24, 2011).

No Recordkeeping Violation for Failure to Report Hours Worked when Benefits are Based on Hours Paid

The U.S. Third Circuit Court of Appeals upheld the district court?ÇÖs determination that when a plan document provides that benefits are based on ?Ç£hours paid?Ç¥ rather than ?Ç£hours worked,?Ç¥ an employer does not have an obligation to report unpaid hours (in violation of wage/hour laws) to plan administrators under ERISA?ÇÖs record maintenance requirements. Thus, the claim that there was an ERISA recordkeeping violation failed. Henderson v. UPMC, No. 10-1377 (3rd Cir. April 5, 2011).

HHS to Stop Accepting ERRP Applications

The HHS announced that it will no longer accept applications for the Early Retiree Reinsurance Program (ERRP) after May 5, 2011. PPACA created ERRP as a temporary program to provide reimbursement for a portion of the costs of providing health coverage to early retirees and their eligible dependents. HHS announced that because the funding appropriated to ERRP is expected to be depleted, HHS will not process ERRP applications received after May 5, 2011. The guidance clarifies that the application must be received by the ERRP?ÇÖs intake program by the deadline; an application postmarked by the May 5 deadline is not sufficient. A copy of the guidance is available here.

EBSA Issues Additional FAQs for Affordable Care Act Implementation

The Employee Benefits Security Administration (?Ç£EBSA?Ç¥) on April 4th released a set of six frequently asked questions (?Ç£FAQs?Ç¥) regarding issues for grandfathered plans under the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥). The FAQs were prepared jointly by the Department of Health and Human Services (?Ç£HHS?Ç¥), Department of Labor and Department of the Treasury, and are the sixth set of FAQs issued to help stakeholders implement provisions of PPACA. The new FAQs cover topics such as the anti-abuse rules under the Interim Final Grandfather Regulations and whether certain scenarios would cause a plan to relinquish grandfathered status. This set of FAQs can be found here. Previously issued FAQs are available?áhere.

April 2011
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