[firm] blog logo

Employers Can Register For Electronic National Medical Support Notices

The electronic National Medical Support Notice (“e-NMSN”) process is a free, voluntary electronic exchange of National Medical Support Notices (“NMSNs”) between state child support agencies and employers, third-party providers, plan administrators, and unions. The HHS Office of Child Support Enforcement (“OCSE”) has issued FAQs about e-NMSN, which went live in February 2022, that highlight its potential benefits and how it operates. The FAQs state that OCSE places NMSN files from child support agencies on the employer’s designated secure server. After the employer completes the NMSN forms, OCSE picks up the NMSN files from the employer’s server and transmits them to the child support agency’s secure server. Along with the benefits associated with being able to administer NMSNs virtually, the FAQs state e-NMSN allows child support agencies to notify employers that health coverage is no longer ordered or is no longer enforced by the child support agency. An employer or plan administrator can register to use… Continue Reading

IRS Extends Certain Amendment Deadlines Under the SECURE Act, CARES Act, and Miners Act

The IRS recently issued Notice 2022-33 (the “Notice”) providing extensions to the amendment deadlines for certain provisions of the SECURE Act, the CARES Act, and the Bipartisan American Miners Act of 2019 (the “Miners Act”). Pursuant to the Notice, non-governmental qualified plans and 403(b) plans now have until December 31, 2025, to be amended for: The SECURE Act; The waiver of 2020 required minimum distributions under the CARES Act; and The Miners Act (which allowed pension plans to permit in-service distributions at age 59½). Notably, the extensions under the Notice do not apply to other provisions of the CARES Act, including coronavirus-related distributions and loan relief. Accordingly, pending further guidance, amendments for all other CARES Act provisions remain due by the end of first plan year beginning on or after January 1, 2022. In all cases, plans must be operated as if the amendment applied as of its original effective… Continue Reading

Principal Wins ERISA Appeal in General Account Fiduciary Case

According to a recent Eighth Circuit Court of Appeals case, insurance companies that offer guaranteed interest rate products in their retirement platforms do not violate ERISA’s fiduciary standards so long as such products are provided for reasonable compensation.  Insurance companies that offer investment platforms to retirement plans in connection with their recordkeeping services generally include guaranteed interest accounts backed by their general account. In an appeal of a district court’s decision in Rozo v. Principal Life Insurance Company, certain plan participants (collectively, the “Plaintiffs”) argued that the insurance company that was providing the plan recordkeeping services, Principal Life Insurance Company (“Principal”), engaged in prohibited fiduciary self-dealing by including a fixed income option because Principal failed to establish that the revenue generated for itself from the plan related to the fixed income option was reasonable.  The Court, in rejecting the Plaintiffs’ arguments and ruling in favor of Principal, held that the… Continue Reading

HIPAA Covered Entity Incurs $300,640 Settlement Penalty Over Improper PHI Disposal

A recent settlement announced by the HHS’s Office for Civil Rights (“OCR”) is a great reminder for all covered entities, including group health plans, to remain vigilant in protecting PHI. OCR recently announced a settlement with a HIPAA covered entity over the covered entity’s improper disposal of PHI under the HIPAA privacy and security rules (“HIPAA Rules”). In this case, the covered entity was a health care provider that routinely disposed of empty specimen containers labeled with PHI by placing them in an outdoor unprotected garbage bin. A breach of PHI occurred when one of the labeled containers was found by a third-party security guard. Upon its investigation into the breach, OCR determined that (i) the covered entity did not maintain appropriate safeguards to protect the privacy of PHI, as required by the HIPAA Rules, and (ii) the covered entity impermissibly disclosed PHI to unauthorized individuals in violation of the… Continue Reading

Is it Time to Give Your Pension Plan a Lift-Out?

While pension plans can provide much needed retirement benefits to an employer’s workforce, the associated liabilities of defined benefit and cash balance plans also can have a number of negative impacts on the employer, including on its financial statements. One method to reduce these negative impacts is to remove some of the liabilities from the plan by using a pension “lift-out.” Essentially, a “lift-out” transfers risk and certain liabilities (usually for retirees or beneficiaries in pay status) to an annuity provider outside of the plan. For the past few years, the value of doing a lift-out has been reduced because of the high cost of the annuities. However, the recent increase in interest rates has made annuities much more affordable, which makes a lift-out a more attractive option in the current market. Plan sponsors considering a lift-out should design a plan to implement the lift-out, which should include, without limitation,… Continue Reading

Litigators View Your 401(k) Plan as a Tempting Target. What Can You Do as the Plan Sponsor?

As noted in our prior blog post here, plaintiffs’ firms—large and small—have been aggressively targeting 401(k) plan fiduciaries. Fiduciary breach claims are on the rise, and it is increasingly the fiduciaries of midsize and small plans who find themselves in the crosshairs. The majority of these lawsuits fall into the “excessive fee” category. The claims may include allegations that fiduciaries breached their duties to the plan by selecting higher fee actively-managed funds instead of index funds, selecting more expensive retail class funds instead of institutional class funds, selecting bundled funds with additional layers of fees (such as certain target date funds), failing to monitor revenue sharing from the selected funds, paying excessive recordkeeping fees, retaining poorly performing investment options for too long, failing to benchmark service provider fees or solicit bids from competing service providers, failing to leverage the plan’s asset size to negotiate lower fees…and the list goes on.… Continue Reading

September 2022
S M T W T F S
 123
45678910
11121314151617
18192021222324
252627282930  

Archives