[firm] blog logo

IRS Provides New Guidance Under Code Section 162(m)

In December 2017, under the Tax Cuts and Jobs Act, Congress broadened the $1 million deduction limitation under Code Section 162(m) for a public company?ÇÖs top executives by, among other things, broadening the scope of ?Ç£covered employees?Ç¥ and eliminating the performance-based compensation exception. The more restrictive Code Section 162(m) generally applies for tax years after 2017, but certain arrangements in existence on November 2, 2017, may be grandfathered. On August 21, 2018, the IRS issued new guidance on Code Section 162(m) under IRS Notice 2018-68 (the ?Ç£Notice?Ç¥). Notably, the Notice provides guidance with respect to the grandfathering relief (including the impact of negative discretion and what constitutes a material modification), and provides guidance on the expanded scope of who is a ?Ç£covered employee?Ç¥ (and will remain a covered employee). The Notice leaves open for comment several issues, including, the rule which allows certain newly public companies to limit the application… Continue Reading

Reliance on Inherently Disclosed Embodiments in Prior Art is Dangerous

Prior art disclosures, and particularly non-patent literature, can be relied on for more than what they explicitly disclose.?á For example, many prior art references may be interpreted as including inherent disclosures. However, reliance on inherent disclosures does not come without a large amount of risk, requiring a careful analysis of the inherent yet undisclosed characteristics of the reference. The strict test for inherent disclosures was apparent in Endo Pharmaceuticals Solutions, Inc. et al., v. Custopharm Inc., (Appeal Number 2017-1719, Fed. Cir. July 13, 2018) (?Ç£Endo Pharms.?Ç¥), where a showing that an undisclosed (but actually used) formulation in the prior art was insufficient to find an inherent disclosure. In Endo Pharms., Endo Pharmaceuticals Solutions, Inc., Bayer Intellectual Property GHBM, and Bayer Pharma AG(?Ç£Endo?Ç¥) sued Custopharm Inc. (?Ç£Custopharm?Ç¥) over infringement of U.S. Patent No. 7,718,640 (?Ç£the ?Çÿ640 patent?Ç¥) and U.S. Patent No. 8,338,395 (?Ç£the ?Çÿ395 patent?Ç¥). The ?Çÿ640 and ?Çÿ395 patents cover… Continue Reading

OCR Provides Informal HIPAA Guidance Regarding Disposal of Electronic Devices and Media Containing PHI

In a July 2018 newsletter, the Office of Civil Rights (?Ç£OCR?Ç¥) of the U.S. Department of Health and Human Services (?Ç£HHS?Ç¥), the federal agency responsible for enforcement of the HIPAA privacy, security, and breach notification regulations (collectively, the ?Ç£HIPAA Rules?Ç¥), provided informal guidance to HIPAA ?Ç£covered entities?Ç¥, such as employer-sponsored group health plans (?Ç£Covered Plans?Ç¥), regarding the disposal of electronic devices and media that house ?Ç£protected health information?Ç¥ (?Ç£PHI?Ç¥). Examples of such devices and media include desktop and laptop computers, tablets, copiers, servers, smart phones, hard drives, USB drives, and other electronic storage devices. Employer-sponsors of Covered Plans should take note of the following key points raised by the newsletter?ÇÖs guidance: A covered entity?ÇÖs performance of a ?Ç£risk analysis?Ç¥ (which is a required step to comply with the HIPAA Rules) plays a critical role in determining how best to protect PHI stored on electronic devices and media that has reached… Continue Reading

Class Action Case Certified for Failure to Provide COBRA Election Notices in Spanish

A U.S. District Court in the 11th Circuit certified as a class action a case in which the plaintiff argued that her former employer, the Marriott International hotel chain, violated federal law by failing to: (1) provide a COBRA notice in Spanish; (2) adequately explain the procedures to elect healthcare coverage; (3) identify itself as the plan administrator; and (4) provide a notice that an average plan participant would understand. There are over 15,000 potential class members who received the allegedly deficient COBRA notice. Employers subject to COBRA are required to offer employees the option to continue their group health plan coverage after employment termination (among other COBRA qualifying events). These notices need to comply with language and other requirements. Employers that fail to comply with COBRA may face penalties of up to $110 per day for each individual who is sent a defective notice. Vazquez v. Marriott Int?ÇÖl, Inc.,… Continue Reading

Sixth Circuit Decision Highlights Importance of Distributing Accurate SPDs

A recent case decided by the U.S. Court of Appeals for the Sixth Circuit provides yet another example of the importance of ensuring that plan documents and summary plan descriptions (?Ç£SPDs?Ç¥) accurately and consistently describe plan benefits. In Pearce v. Chrysler Group LLC Pension Plan, the plan document provided that a participant who was not actively employed at retirement would be ineligible to receive an early retirement supplement. In contrast, the SPD stated that a participant did not need to be actively employed at retirement to remain eligible for the early retirement supplement. This discrepancy became an issue when an employee accepted a termination incentive, and the employer, relying on the language in the plan document, argued that this made the employee ineligible for the early retirement supplement. The employee requested that the lower court (i) grant equitable estoppel to prevent the employer from relying on the plan document, and… Continue Reading

Texas Insurance Academy

SAVE THE DATE!?áInsurance professionals and counsel are invited to attend our Texas Insurance Academy 2020 Virtual Webinar, where they will learn from risk managers, coverage counsel and brokers about important insurance issues affecting businesses from a broad range of industries. Our experienced panelists will share their knowledge on the issues faced during this unprecedented year and explore creative pathways to handle risk in the future. December 3, 2020 AGENDA Recovery for COVID-19 Related Business Losses: Latest Case Developments 10:00 a.m. ?Çô 11:00 a.m. CT New court rulings come out weekly. Stay abreast of the latest court decisions across the country on insurance recovery for COVID-19 related business losses and understand what prompted favorable policyholder decisions. Speaker: Ernest Martin ?Çô Partner – Haynes and Boone ________________________________________ Alternative Risk Finance Techniques 11:00 a.m. ?Çô 12:00 p.m. CT As a result of the challenges risk managers and in-house counsel are facing in this… Continue Reading

IRS Finalizes Rules Permitting Use of Forfeitures to Fund Safe Harbor Contributions, QNECs, and QMACs

As we previously reported, on January 18, 2017, the IRS proposed amendments to regulations under Section 401(k) of the Internal Revenue Code that would permit the use of forfeitures to fund safe harbor contributions, qualified non-elective contributions (?Ç£QNECs?Ç¥), and qualified matching contributions (?Ç£QMACs?Ç¥). The IRS recently finalized the proposed amendments, effective as of July 20, 2018, without substantive changes. The prior regulations had provided that employer contributions could only qualify as safe harbor contributions, QNECs, or QMACs if they were non-forfeitable and not eligible for early distribution at the time they were contributed to the plan. The final regulations now provide that safe harbor contributions, QNECs, and QMACs be non-forfeitable and not eligible for early distribution at the time they are allocated to participants?ÇÖ accounts. View the final regulations.

August 2018