An administrative law judge for HHS upheld an award of $4.3 million in civil monetary penalties (the ?Ç£Penalties?Ç¥) against a Texas-based healthcare provider for violations of the HIPAA privacy and security rules (the ?Ç£HIPAA Rules?Ç¥). The provider is a ?Ç£covered entity?Ç¥ under HIPAA (?Ç£CE?Ç¥), and the Penalties are the fourth largest ever awarded to the Office of Civil Rights (?Ç£OCR?Ç¥), the HHS agency that enforces the HIPAA Rules, by an administrative law judge or secured via a settlement for HIPAA violations. The Penalties stemmed from an OCR investigation of the CE in response to three separate HIPAA breach reports the CE filed with OCR during 2012 and 2013 involving the theft of an unencrypted laptop computer and the loss of two unencrypted thumb drives, which resulted in the impermissible disclosure of electronic protected health information (?Ç£EPHI?Ç¥) of over 33,500 individuals. OCR?ÇÖs investigation found that, although the CE had written encryption… Continue Reading
Consider Periodic Internal Plan Audits to Ensure Proper Application of Plan?ÇÖs Definition of ?Ç£Compensation?Ç¥
A frequent, but often times avoidable, operational error for retirement plans is the failure to use the proper definition of compensation for various purposes, including, without limitation, calculating employee deferrals and employer contributions. A retirement plan?ÇÖs definition of compensation typically includes dozens of components that all must be properly coded in the plan sponsor?ÇÖs payroll system as eligible or ineligible plan compensation. Plan sponsors should periodically compare the plan?ÇÖs definition of ?Ç£compensation?Ç¥ to the employer?ÇÖs payroll records to verify that the proper definition of compensation has been used for all plan purposes, including calculating employee deferrals and employer contributions. Performing such an audit can help identify any errors and help to minimize the amount of any corrective contributions and other fees and expenses that may be associated with correcting the error.
Many employers maintain policies for compliance with the various laws governing document retention. In developing such a policy, it is important for employers to consider the rules applicable to documents related to plans subject to ERISA: Section 107 of ERISA mandates a six-year document retention period for purposes of its reporting and disclosure requirements (e.g., documents supporting the content of a Form 5500 must be retained for six years after the filing date). Section 209 of ERISA requires an employer to retain benefits records for each employee sufficient to determine the benefits which are or may become due to that employee. No end date is specified, but a proposed DOL regulation specifies that pension records must be retained for ?Ç£as long as any possibility exists that they might be relevant to a determination of benefit entitlements.?Ç¥ Employers should ensure that their document retention policies have been reviewed for consistency with… Continue Reading
Under the terms of many defined contribution plans, if a participant incurs a termination of employment, any outstanding loan will become immediately due and payable. If the participant is unable to repay the loan, the participant?ÇÖs account balance will be offset by the amount of the outstanding loan, and this offset will be treated as a taxable distribution from the plan unless the participant contributes the amount of the loan offset to an eligible retirement plan (such as an IRA). As we previously reported on our blog, the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, extended the period of time a participant has to make such a contribution from 60 days after the date of the offset to the due date (including extensions) for filing the participant?ÇÖs federal income tax return for the year in which the plan loan offset occurred. Plan sponsors should confirm… Continue Reading
Generally, the Affordable Care Act (the ?Ç£ACA?Ç¥) requires coverage under a group health plan sponsored by an ?Ç£applicable large employer?Ç¥ (at least 50 full-time equivalent employees) to be ?Ç£affordable?Ç¥, as determined under the ACA, in order to avoid certain ACA penalties. ?Ç£Affordability?Ç¥ is based on whether the premium for employee-only coverage is less than a certain percentage of an employee?ÇÖs household income or a designated safe harbor amount. The IRS has increased the affordability percentage for 2019 to 9.86 percent, up from 9.56 percent in 2018.
On May 22, 2018, in Viacom Int’l, Inc. v. IJR Captial Invs., LLC, 242 F. Supp.3d 563 (2017), the Fifth Circuit Court of Appeals upheld summary judgment in favor of Viacom International Inc. (Viacom) on its trademark infringement and unfair competition claims against IJR Capital Investments, LLC (IJR).?á In a case of first impression, the court held that ?Ç£specific elements from within a television show?Çöas opposed to the title of the show itself?Çö[can] receive trademark protection.?Ç¥ Viacom is the owner of SpongeBob SquarePants, an animated television series created for Viacom?ÇÖs Nickelodeon Network that first premiered in 1999, and recently renewed for a twelfth season.?á The series follows the life of the title character, SpongeBob SquarePants, and his friends in the underwater town of Bikini Bottom.?á The Krusty Krab, the center of the controversy in this case, is a fast-food restaurant in the submerged town owned by Mr. Krabs, a money-hungry… Continue Reading