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IRS Releases Pension Smoothing Guidance for Single-Employer Pension Plans

The Highway and Transportation Funding Act of 2014 (“HATFA”) extended for five years the funding stabilization provisions for single-employer defined benefit pension plans that were included in MAP-21. The IRS recently released Notice 2014-53 providing guidance on the funding stabilization rules after the passage of HATFA. The Notice, among other things, provides that a plan sponsor may irrevocably elect to defer, until the first plan year beginning on or after January 1, 2014, the use of the HATFA rates, either for all purposes or solely for purposes of Internal Revenue Code (“Code”) Section 436 funding-based limits on benefits and benefit accruals. The deferral requires the plan sponsor to provide written notice to the plan’s enrolled actuary and plan administrator by the later of (i) the deadline for filing the plan’s 2013 Form 5500, including extensions, or (ii) December 31, 2014. However, an election to defer the plan’s use of the… Continue Reading

Court Holds that Benefit Denial Notices Must Include Time Limits for Judicial Review

In the case of Moyer v. Metropolitan Life Ins. Co., the U.S. Court of Appeals for the Sixth Circuit held that a notice of benefit denial under ERISA must include not only a statement of the claimant’s right to judicial review of the benefit denial, but also any associated time limits for filing a claim for judicial review. Moyer was a participant in an employer-sponsored long-term disability plan that was subject to ERISA (the “Plan”). MetLife was the designated claims fiduciary under the Plan. MetLife denied Moyer’s claim for benefits and his subsequent internal appeal of that denial. Nearly four years later, Moyer sued MetLife for the denied benefits under Section 502 of ERISA. The Plan document specified a three-year limitations period for filing such a lawsuit, but neither MetLife’s benefit denial notice to Moyer nor the Plan’s summary plan description (“SPD”) included any such limitations period. The district court… Continue Reading

IRS Releases Draft Instructions for ACA Reporting Forms

The Internal Revenue Service (the “IRS”) released draft instructions for the forms that employers will use to report certain information required by the Affordable Care Act (the “ACA”).  Draft instructions have been released for Forms 1095-C (Employer-Provided Health Insurance Offer and Coverage), 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns), 1095-B (Health Coverage), and 1094-B (Transmittal of Health Coverage Information Returns).  Large employers (i.e., those with at least 50 full-time employees or equivalents) will use Forms 1095-C and 1094-C, while small employers offering “minimum essential coverage” to their employees will use Forms 1095-B and 1094-B.  Draft versions of these forms were released by the IRS in July.  Although these ACA reporting forms will be required for the first time in early 2016 (to report information related to the 2015 calendar year), the instructions provide that employers may voluntarily report information pertaining to the 2014 calendar year in… Continue Reading

EEOC Sues Employer Over “Involuntary” Wellness Program

The U.S. Equal Employment Opportunity Commission (the “EEOC”) recently sued Orion Energy Systems, Inc. (“Orion”), a Wisconsin employer, for allegedly violating the Americans with Disabilities Act of 1990, as amended (the “ADA”), in connection with Orion’s employee wellness program. Under this program, participants received a 100 percent subsidy on their health plan premiums while non-participants were required to pay the full cost. The EEOC charged that the Orion wellness program was not voluntary, and thus violated the ADA, because (1) it imposed a financial penalty for non-participation and (2) the sole non-participant was terminated from employment shortly after declining to participate in the program. EEOC guidance states that a wellness program is “voluntary” provided that participation is not required and the employer does not “penalize” employees who do not participate. However, the EEOC has not issued formal guidance regarding whether or to what extent an employer may offer financial incentives… Continue Reading

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