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Federal Court Ruling Deals Another Blow to Cigna?ÇÖs Attempts at Overpayment Recoupment

On March 8, 2017, the U.S. District Court for the District of Connecticut (the ?Ç£Connecticut Court?Ç¥) ruled, in Connecticut General Life Insurance Company v. True View Surgery Center One, LP, that Connecticut General Life Insurance Company (?Ç£Cigna?Ç¥) was barred from pursuing recoupment from True View and other affiliated surgery centers (collectively, the ?Ç£Surgery Centers?Ç¥) for reported overpayments attributable to the Surgery Centers?ÇÖ alleged fee-forgiving billing practices. Cigna served as a health benefits insurer and/or a third-party claims administrator for 316 health plans, 293 of which were subject to ERISA (collectively, the ?Ç£ERISA Plans?Ç¥). The Surgery Centers were out-of-network medical care providers that rendered services to participants in the ERISA Plans. With respect to the ERISA Plans, Cigna brought this case in its capacity as claims administrator and plan fiduciary of the plans, alleging that the Surgery Centers (i) lured participants to their facilities by offering services at less than normal… Continue Reading

Subject Matter Eligibility Guidance from the Federal Circuit: Thales Visionix v. United States

Subject Matter Eligibility Guidance from the Federal Circuit: Thales Visionix v. United States

Both the courts and the Patent & Trademark Office (PTO) have struggled to define the metes and bounds of the subject matter eligibility analysis under 35 U.S.C. ?º 101.?á The Court of Appeals for the Federal Circuit?ÇÖs recent decision on March 8, 2017 in Thales Visionix Inc. v. United States1?áfurther clarifies the first step of the eligibility analysis, while confirming the significance of that step. Under ?º 101, patent protection is available to ?Ç£[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.?Ç¥?á Patent claims directed to laws of nature, natural phenomena, and abstract ideas, however, are not patent-eligible subject matter.2?á Courts and the PTO evaluate the subject matter eligibility of claims under a two-step framework set forth by the Supreme Court in Mayo Collaborative Servs. v. Prometheus Labs., Inc.3?áand Alice Corp. Pty. Ltd. v. CLS Bank Int?ÇÖl.?á… Continue Reading

IRS Releases Memo Addressing Hardship Withdrawal Substantiation Requirements for 403(b) Plans

The IRS recently released a memorandum (the “403(b) Memo“) directed to its Employee Plan Examinations agents regarding the documentation they should obtain from plan administrators in order to determine whether distributions from 403(b) plans were made on account of an immediate and heavy financial need. The 403(b) Memo follows a similar memorandum that was recently released by the IRS that related to hardship substantiation requirements for 401(k) plans (the “401(k) Memo“). The 403(b) Memo states that since hardship distributions from a 403(b) plan are subject to the same rules that apply to such distributions from a 401(k) plan, 403(b) plan administrators and recordkeepers should follow the same steps as outlined in the 401(k) Memo to substantiate a participant’s claimed hardship, namely the plan administrator or recordkeeper should, prior to making the distribution, (1) obtain source documents from the employee substantiating the hardship or (2) obtain a summary of the information… Continue Reading

DOL Announces Enforcement Relief from Fiduciary Rule

The U.S Department of Labor (“DOL“) recently published Field Assistance Bulletin 2017-01 (“FAB 2017-01“), in which it announced a temporary policy for enforcement of its new fiduciary duty rule and related exemptions (the “Fiduciary Rule“). On March 2, 2017, the DOL proposed regulations to delay the effective date of the Fiduciary Rule from April 10, 2017 to June 9, 2017. In response to concerns expressed by financial service institutions that uncertainty about whether the effective date of the Fiduciary Rule will actually be delayed could result in investor confusion and marketplace disruption, the DOL indicated in FAB 2017-01 that (1) in the event that it issues a final rule after April 10, 2017 to delay the effective date of the Fiduciary Rule, it will not initiate an enforcement action based on non-compliance with the rule during the “gap” period between April 10, 2017 and the date that the delay is… Continue Reading

No Respite On The Horizon For CBM Patents

No Respite On The Horizon For CBM Patents

The Patent Trials and Appeals Board (?Ç£PTAB?Ç¥) and the Federal Circuit have continued their hostility to payment and financial technology patents, recently invalidating three patents and reversing a large damage award in?áSmartflash LLC v. Apple Inc., Case No. 2016-1059 (Fed. Cir. March 1, 2017 (Smartflash). Given this stance, it seems as though the Covered Business Method (?Ç£CBM?Ç¥) patent review under the America Invents Act (?Ç£AIA?Ç¥), along with the decision in Alice Corp. v. CLS Bank Int?ÇÖl, have become the death knell for many such patents moving forward. In Smartflash, the Federal Circuit invalidated three patents held by Smartflash LLC (?Ç£Smartflash?Ç¥) that were asserted against Apple Inc. (?Ç£Apple?Ç¥) two years ago, resulting in a decision of $533 million in damages in favor of Smartflash. ?áHowever, the overturning of the two-year old verdict from the Eastern District of Texas seemed likely after the PTAB found, in multiple CBM patent reviews, that the… Continue Reading

House Republicans Unveil Draft Healthcare Reform Legislation

The House Energy and Commerce and Ways and Means Committees introduced two bills on March 6, 2017, collectively entitled the American Health Care Act (the “Act“). The Energy and Commerce bill primarily addresses Medicaid and other state-based program funding issues, while the Ways and Means bill focuses on the fees and taxes, insurance subsidies, and other provisions that directly affect employer-provided health coverage under the Affordable Care Act (the “ACA“). It is important to note what these bills are and what they are not. The bills do not represent the complete repeal of the ACA or the final word on what the Act may ultimately look like when finished. These are reconciliation bills intended to repeal and replace certain portions of the ACA by a simple majority vote in a way that would not be subject to a filibuster in the Senate if brought to a vote there. The trade-off… Continue Reading

IRS Publishes First Operational Compliance Checklist

The IRS recently published the first Operational Compliance Checklist (the ?Ç£Checklist?Ç¥), which lists changes in qualification requirements that became effective during the 2016 and 2017 calendar years. Examples of items listed on the Checklist include, among others: mid-year changes to safe harbor 401(k) plans; proposed regulations regarding QNECs and QMACs in defined contribution plans; final regulations regarding cash balance/hybrid plans; and the extension of temporary nondiscrimination relief for closed defined benefit plans. The Checklist is only available online and will be updated periodically to reflect new legislation and IRS guidance. The Checklist does not, however, include routine, periodic changes such as cost-of-living increases, spot segment rates, and applicable mortality tables, which can instead be found on the IRS?ÇÖs Recently Published Guidance webpage. View the Checklist

IRS Releases Memo Addressing Hardship Withdrawal Substantiation

The IRS recently released a memorandum (the ?Ç£Memo?Ç¥) directed to its Employee Plan Examinations agents regarding the documentation that should be obtained from plan administrators in order to determine whether distributions from 401(k) plans were made on account of an immediate and heavy financial need. The Memo indicates that a 401(k) plan distribution should be deemed to be a hardship withdrawal if, prior to making the distribution, the employer or recordkeeper either (a) obtained source documents from the employee substantiating the hardship or (b) obtained a summary of the information contained in such source documents, provided that if a summary is used, a notice containing certain information prescribed in the Memo must be provided to the employee. Plan administrators should consult with their recordkeepers to confirm that their processes for requesting and retaining hardship withdrawal documentation complies with the guidelines in the Memo. View a copy of the Memo.

IRS Provides Transition Relief Regarding QSEHRA Notice Deadline

The IRS has provided transition relief under its Notice 2017-20 (the ?Ç£IRS Notice?Ç¥) regarding the employee notice requirement that small employers must meet if they want to provide a ?Ç£qualified small employer health reimbursement arrangement?Ç¥ (?Ç£QSEHRA?Ç¥) to their employees. As background, the 21st Century Cures Act (the ?Ç£Cures Act?Ç¥) permits certain employers who are not ?Ç£applicable large employers?Ç¥ under the Affordable Care Act (i.e., generally, employers with fewer than 50 full-time or full-time equivalent employees) (?Ç£Eligible Employers?Ç¥) to offer QSEHRAs for the reimbursement of substantiated medical care expenses incurred by employees or their family members, effective January 1, 2017. The Cures Act requires Eligible Employers to furnish a written notice to their eligible employees (?Ç£QSEHRA Notice?Ç¥) at least 90 days prior to the beginning of the year in which the QSEHRA will be provided (or in the case of an employee who is not eligible to participate in the QSEHRA… Continue Reading

Disability Plan Can Disclose Disputed Substance Abuse Problem to Employer Without Violating ERISA

A former employee alleged that Aetna, as administrator of FedEx?ÇÖs short-term disability plan, breached its fiduciary duty under ERISA when Aetna reported to FedEx that the employee filed a disability claim for substance abuse and Aetna later failed to correct this report. FedEx?ÇÖs drug policy stated that the disability vendor (Aetna) would notify FedEx when an employee sought benefits for substance abuse. The U.S. Court of Appeals for the Tenth Circuit found that compliance with FedEx?ÇÖs policy could not constitute a breach of fiduciary duty and Aetna had not provided inaccurate information to FedEx and thus the appeals court upheld the district court?ÇÖs summary judgment on the claim. Williams v. FedEx Corp. Services and Aetna Life Ins. Co., No 16-4032 (10th Cir. Feb. 24, 2017)

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