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Updated Model Summary Annual Report

The U.S. Department of Labor has released updated model Summary Annual Reports (“SARs”) for retirement plans and for welfare benefit plans that are subject to ERISA. Generally, a plan that is required to file an annual Form 5500 is also required to distribute a SAR to plan participants and beneficiaries within nine months from the end of the plan year. View the updated model SAR for welfare plans. View the updated model SAR for retirement plans.

Patent Eligibility of GUI-Related Claims in Light of the Federal Circuit’s Recent Decision in Trading Techs. Int’l. v. IBG LLC

In Trading Techs. Int’l. v. IBG LLC, the Federal Circuit affirmed the Patent Trial and Appeal Board’s decision that the claims in a GUI-related patent, U.S. Patent No. 7,783,556 to Singer et al. (“the ’556 Patent”), were ineligible under 35 U.S.C. § 101.[i]  Generally, the ’556 Patent relates to displaying a trading screen on a graphical user interface (“GUI”).[ii]  The trading screen displays market information to a trader and also places orders for a trade from the trader.[iii]  Using the Alice framework, the Federal Circuit determined that the claims were “directed to” an abstract idea at step one of the Alice framework, and that there were no additional elements that transformed the claims into a patent eligible application at step two of the Alice framework.[iv]  At first glance, this decision might be disappointing to inventors of GUI-related technology.  However, a review of the ’556 Patent reveals support for this decision, which still… Continue Reading

IRS Releases 2020 Inflation-Adjusted Amounts for HSAs and HDHPs

The IRS recently issued Revenue Procedure 2019-25, which sets the 2020 calendar year limits on (i) annual contributions that can be made to a health savings account (“HSA”) and (ii) annual deductibles and out-of-pocket maximums under a high deductible health plan (“HDHP”). The 2020 limits are as follows: Annual HSA contribution limits: $3,550 for self-only coverage ($50 increase from 2019); $7,100 for family coverage ($100 increase from 2019) Minimum HDHP deductibles: $1,400 for self-only coverage ($50 increase from 2019); $2,800 for family coverage ($100 increase from 2019) HDHP out-of-pocket maximum limits: $6,900 for self-only coverage ($150 increase from 2019); $13,800 for family coverage ($300 increase from 2019) View Rev. Proc. 2019-25.

Practice Tip: Warning Signs Your Plan May Have a Missing Participants Problem

When participants in a qualified retirement plan terminate employment with the plan sponsor, it can be challenging to ensure that their contact information in the plan’s records is kept up to date and accurate. Inaccurate contact information is problematic for a variety of reasons, including potentially causing an operational failure when such participants do not receive distribution of their plan benefits by their required distribution date, as well as increasing the possibility of fraud when a participant’s information is sent to the wrong address. In addition, a plan sponsor’s failure to make reasonable efforts to locate missing participants would be a breach of their fiduciary duties of loyalty and prudence. Often, the first indication that a participant may be missing is that mail sent to their last known address is returned undeliverable or their distribution checks are returned or remain uncashed. In addition, a plan sponsor should check to see… Continue Reading

Documentation of ERISA Authorized Representative Procedures

Under ERISA, a participant in an ERISA-covered plan has the right to designate an authorized representative to act on his or her behalf in connection with claims and appeals. The plan may establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant. Earlier this year, the DOL issued an information letter stating, in part, that: “The plan must include any procedures for designating authorized representatives in the plan’s claims procedures and in the plan’s summary plan description (“SPD”) or a separate document that accompanies the SPD.” Employers that sponsor ERISA plans should (i) verify that the claims procedures in each plan and SPD contain reasonable procedures for designating authorized representatives and (ii) amend the plan and SPD as needed. View the DOL information letter.

IRS Opens Determination Letter Program to Merged Plans and Hybrid Plans

In Revenue Procedure 2019-20, the IRS extended the determination letter program, effective as of September 1, 2019, to include merged plans resulting from a corporate merger or similar transaction. For a merged plan to be eligible for a favorable determination letter, (i) the date of the plan merger must occur no later than the last day of the first plan year beginning after the plan year that includes the closing date of the corporate transaction, and (ii) the determination letter application must be submitted between the date of the plan merger and the last day of the first plan year beginning after the date of the plan merger. In addition, the IRS will accept determination letter applications for individually designed statutory hybrid plans during a 12-month window beginning on September 1, 2019. As always, the IRS will continue to process determination letter applications for initial plan qualification and for qualification… Continue Reading

IRS Expands Self-Correction Program Under EPCRS

The IRS recently published Rev. Proc. 2019-19, which sets forth the most current consolidated statement of the correction programs under the IRS’s Employee Plans Compliance Resolution System (“EPCRS”). Pursuant to the new guidance, which became effective April 19, 2019, eligible plan sponsors may use the self-correction program (“SCP”) component of EPCRS to correct certain failures that were previously only correctable under the voluntary correction program (“VCP”) or Audit CAP components of EPCRS. Unlike VCP and Audit CAP, SCP does not require any filings or payments to the IRS. The amended SCP now includes procedures for correcting certain plan document failures and for correcting certain participant loan failures (including defaulted plan loans). Rev. Proc. 2019-19 also expands the circumstances under which certain operational failures may be corrected by plan amendment under SCP. View Rev. Proc. 2019-19. View a summary of the key changes to the SCP component of EPCRS.

Patent Eligibility Used as the Federal Circuit’s Shuttlecock in Weekly Badminton Match

In the months following the release by the USPTO of The 2019 Revised Patent Subject Matter Eligibility Guidance (“2019 Revised Guidance”), anecdotal evidence shows a noticeable uptick in the number of patent ineligibility rejections that have been withdrawn by Examiners at the USPTO, which is promising for applicants and inventors filing patents in technology areas that have been gridlocked since the Supreme Court decision in  Alice Corp. v. CLS Bank International, 573 U.S. 208, 134 S. Ct. 2347 (2014).  While the trend at the USPTO appears to be improving in favor of applicants, a division continues to exist in the Court of Appeals for the Federal Circuit (“CAFC”).  Recently, two different panels of the CAFC made apparently contradictory decisions on patent eligibility within a week of each other that.  Sample claims from each case are reproduced below: Case #1: 1.  A computer-automated method of hierarchical event monitoring and analysis within… Continue Reading

Court Vacates Key Provisions of the DOL’s Association Health Plan Regulations

In its recent decision in State of New York v. U.S. Department of Labor, the federal district court for the District of Columbia vacated key provisions of the final regulations issued in 2018 by the DOL under ERISA regarding the establishment of “association health plans” (the “Final Regulations”). The Final Regulations broadened the criteria under ERISA for determining when a group of employers may join together as a “single employer” to sponsor a single group health plan in the form of an association health plan (“AHP”). The Final Regulations were applicable to fully-insured AHPs as of September 1, 2018, to existing self-funded AHPs as of January 1, 2019, and to newly created self-funded AHPs as of April 1, 2019. See our prior blog post for additional information regarding the Final Regulations. In response to the Final Regulations, 11 states and the District of Columbia sued the DOL alleging that (i) key… Continue Reading

IRS Publishes Updated Operational Compliance Checklist

The IRS recently published an updated Operational Compliance Checklist (the “Checklist”), which lists changes in qualification requirements that became effective during the 2016 through 2019 calendar years. Examples of items added to the Checklist for 2019 include, among other things: Changes to the hardship distribution rules enacted by the Bipartisan Budget Act of 2018, such as eliminating the requirement to first take out all available plan loans and expanding the types of contributions eligible for distribution Proposed regulations enacting certain other changes to the hardship distribution rules, such as eliminating the six-month contribution suspension requirement and expanding the safe harbor list of expenses deemed to constitute an immediate and heavy financial need The extension of temporary nondiscrimination relief for closed defined benefit plans The Checklist is only available online and is updated periodically to reflect new legislation and IRS guidance. The Checklist does not, however, include routine, periodic changes, such… Continue Reading

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