Seventh Circuit Holds Individuals Personally Liable for the Corporation?ÇÖs Withdrawal Liability from a Multiemployer Pension Plan
Messina Trucking withdrew from a multiemployer pension plan after the collective bargaining agreement ceased.?á The pension plan filed suit for collection of withdrawal liability against, among others, Messina Trucking?ÇÖs owners, Mr. and Mrs. Messina, and other businesses owned by the Messinas.?á While passive investors are not trades or businesses for these liability purposes, the Seventh Circuit Court of Appeals, citing a prior opinion, held that renting property to a withdrawing employer is ?Ç£categorically?Ç¥ a trade or business.?á It was undisputed that the Messinas rented property to their closely-held corporation; therefore, the Messinas were personally liable to the pension plan for the company?ÇÖs withdrawal liability. The Court also held another entity owned by the Messinas was a trade or business even though it had no employees, regular business activity, real estate, or other assets, aside from an investment in another entity.?á The court concluded that this entity was a trade or… Continue Reading
Eighth Circuit Holds Employer Not Liable for Civil Penalties for Failing to Timely Deliver COBRA Notices
A terminated employee sued his prior employer for failing to provide him with notice of his right to COBRA continuation coverage after his termination of employment.?á The COBRA law permits a court to hold a plan administrator personally liable to a plan participant in an amount of up to $110 per day of noncompliance with COBRA?ÇÖs notification requirements. Here, it was undisputed that the employer failed to provide the employee with the required COBRA notices at the employee?ÇÖs initial enrollment and after his termination; however, due to a clerical error, the employer continued to provide the employee with health insurance coverage for nearly two years after the employee?ÇÖs termination.?á Upon discovering the error, the employer retroactively canceled the employee?ÇÖs coverage, and the insurer sought to ?Ç£claw back?Ç¥ the amount of benefits it had paid for the employee.?á After the employee filed suit, the employer reversed course and retroactively reinstated the… Continue Reading
The federal Departments of Health and Human Services, Treasury, and Labor (collectively, the ?Ç£Departments?Ç¥) issued proposed regulations (?Ç£Proposed Regulations?Ç¥) that were published on February 6, 2013.?á The Proposed Regulations amend rules previously enacted under the Patient Protection and Affordable Care Act, as amended (?Ç£PPACA?Ç¥), which required coverage for certain preventive health services (?Ç£Prior Rules?Ç¥), including certain women?ÇÖs contraceptive services, without cost sharing under non-exempt, non-grandfathered group health plans and health insurance coverage.?á The Proposed Regulations simplify the definition of ?Ç£religious employers,?Ç¥ which are exempt from the contraceptive coverage requirement, to generally mean churches, other houses of worship, and their affiliated organizations, regardless of the religious affiliation of their served communities or of their employees.?á The Proposed Regulations also create an accommodation for certain non-profit, religious ?Ç£eligible organizations,?Ç¥ whereby an eligible organization would not be required to contract, arrange, pay, or refer for any contraceptive coverage to which the eligible organization… Continue Reading
Consumer reviews posted on the popular website Yelp have sparked recent litigation in Florida and Virginia. One case concerned the admissibility of Yelp reviews as evidence, and the other raised the issue of unconstitutional prior restraint. Florida Court Permits Use of Yelp Reviews to Show Actual Confusion Proving likelihood of confusion is a key element of a trademark infringement claim. A trademark infringement case often will turn on whether the plaintiff can show that consumers are likely to confuse the plaintiff?ÇÖs goods or services with those of the defendant. Evidence of actual consumer confusion can weigh powerfully in the plaintiff?ÇÖs favor. In You Fit Inc. v. Pleasanton Fitness LLC, the plaintiff had submitted two Yelp reviews of a fitness club as evidence that consumers were actually confused by the defendants?ÇÖ use of its ?Ç£YOU FIT?Ç¥ mark. According to the court’s February 11, 2013 order, the defendants were two former franchisees… Continue Reading
The United States Court of Appeals for the Second Circuit recently held that a participant was not required to exhaust her administrative remedies when she reasonably interpreted a plan?ÇÖs terms not to require exhaustion of her administrative remedies, and as a result, did not exhaust her remedies. The plaintiff, a participant in the plan, believed that she lost an early retirement subsidy as a result of the plan sponsor?ÇÖs sale of a subsidiary. She sent letters to the benefits department, which did not respond, and received a confusing response when she called. She then received a letter with a pension quote that was lower than her pension quote from five years prior. She then filed a lawsuit. The U.S. federal district court dismissed the plaintiff?ÇÖs lawsuit reasoning she had failed to exhaust her administrative remedies under the plan. The Second Circuit Court of Appeals vacated. The relevant part of the… Continue Reading
PBGC Releases Technical Update on Reportable Events, Funding-Related Determinations, and Missed Quarterly Contributions
The Pension Benefit Guaranty Corporation (the ?Ç£PBGC?Ç¥) published Technical Update 13-1 (the ?Ç£Update?Ç¥) providing guidance on (i) funding-related determinations for purposes of waivers, extensions, and the advance reporting threshold test; and (ii) missed quarterly contributions. The Update is generally applicable for plan years commencing after 2012. A copy of the guidance is available here.
A Final Rule was released which amends the Health Insurance Portability and Accountability Act (?Ç£HIPAA?Ç¥) to incorporate the changes made by the Health Information Technology for Economic and Clinical Health Act (?Ç£HITECH?Ç¥) and the Genetic Information Nondiscrimination Act (?Ç£GINA?Ç¥), and to make HIPAA more ?Ç£workable?Ç¥ for covered entities, such as employer-sponsored group health plans. An Alert discussing the Final Rule can be found here.
?Ç£Large employers?Ç¥ (employers with at least 50 full-time and full-time equivalent employees) may be subject to a PPACA penalty in 2014 if the employer?ÇÖs group health coverage does not meet certain requirements imposed by PPACA. A short summary of action steps to help employers plan for the penalty?ÇÖs avoidance can be found?áhere.
The IRS issued final regulations confirming that, for purposes of determining eligibility for the premium tax credit under PPACA, coverage is considered affordable for dependents if the employee must pay not more than 9.5 percent of household income for employee-only coverage. Employers wishing to offer ?Ç£affordable?Ç¥ coverage in order to minimize the penalty on healthcare coverage that is effective in 2014 must only ensure that the premium charged for employee-only coverage meets this 9.5 percent test. The final regulations can be found here.
Proposed rules were released regarding individuals who are exempt from the requirement under the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥) to maintain ?Ç£minimum essential health coverage,?Ç¥ and expanding the definition of what constitutes such minimum essential health coverage. The IRS also released proposed rules regarding an individual?ÇÖs liability for a ?Ç£shared responsibility payment?Ç¥ due to a failure to maintain minimum essential health coverage. The proposed rules can be found?áhere?áand here.