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Post-Dobbs Subpoenas for Protected Health Information Require Special Scrutiny under HIPAA

The landscape of laws governing the provision of abortion-related services, and coverage of such services under employer-sponsored group health plans, is rapidly changing in the wake of the U.S. Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, which overturned Roe v. Wade. Prior to Dobbs, numerous states had enacted “trigger laws” prohibiting or restricting abortions, that were effectuated by Dobbs. Other states may now pass similar anti-abortion laws. Some states, such as Texas, have laws in effect that impose potential liability on parties that “aid or abet” abortions. As a result of the Dobbs decision and the fact that many state laws regulating abortions are now effective, compliance and enforcement investigations and lawsuits may arise. For example, plan sponsors of group health plans that provide coverage for abortion services, such as reimbursements for travel expenses incurred to obtain an out-of-state abortion (“Abortion Services”), could find themselves receiving subpoenas… Continue Reading

U.S. Supreme Court Rules Limited Coverage for Dialysis Does Not Violate Medicare Secondary Payer Statute

On June 21, 2022, the U.S. Supreme Court issued its decision in Marietta Memorial Hospital Health Benefit Plan v. DaVita Inc. In this case, an employer-sponsored group health plan paid limited benefits for outpatient dialysis, and DaVita Inc. (the dialysis provider) sued the plan for violating the Medicare Secondary Payer statute (the “MSP Statute”). Generally, the MSP Statute prohibits an employer-sponsored group health plan from (i) differentiating in its benefits coverage between individuals having end stage renal disease (“ESRD”) and other individuals, and (ii) taking into account that an individual is entitled to or eligible for Medicare due to ESRD. For individuals who have ESRD, the primary treatment is renal dialysis, which is very expensive. The U.S. Court of Appeals for the Sixth Circuit previously ruled that the MSP Statute permits disparate-impact liability and that the limited payments for dialysis treatment had a disparate impact on individuals with ESRD. However, in… Continue Reading

The Reversal of Roe v. Wade: What ‘s Next For Your Group Health Plan?

On June 24, 2022, the U.S. Supreme Court issued its decision in Dobbs v. Jackson Women’s Health Organization. This decision overturned the Court’s prior decisions in Roe v. Wade and Planned Parenthood v. Casey, by holding that the U.S. Constitution does not confer any right to an abortion and returning the authority to regulate abortion back to the states. Some employer-sponsored group health plans provide coverage for abortion procedures and related expenses. The full impact of Dobbs on such coverage is unknown at this time, pending future legal developments in the states, guidance from the federal government, and the results of new court cases which will likely be filed in response to this decision. In the meantime, the following considerations may be relevant for employers that sponsor a group health plan: The application to a group health plan of any new or revised abortion-related laws that are passed in the… Continue Reading

New HIPAA Guidance: Use of Remote Technologies for Audio-Only Telehealth

HHS recently issued guidance to clarify how health plan and health care provider covered entities under HIPAA (each, a “Covered Entity”) may use remote communication technologies to deliver audio-only telehealth services (“Audio Services”) in accordance with HIPAA’s privacy and security rules. Audio Services may be offered by a Covered Entity in order to expand access to health care by individuals who are unable to use video telehealth services due to disability, limited English proficiency, lack of internet availability, or other factors.   Topics addressed by the guidance include: Reasonable safeguards that must be implemented by a Covered Entity that is providing Audio Services, including verifying the identity of the individual who is being provided the Audio Services before any PHI is disclosed; The application of the HIPAA security rule, which imposes requirements on the use and disclosure of electronic PHI, to various forms of communication technologies that may be used… Continue Reading

DOL Fiduciary Rule and Prohibited Transaction Exemption Compliance Date is Approaching

Beginning July 1, 2022, retirement investment providers that provide fiduciary rollover advice must document and disclose to the customer the specific reasons that the rollover to a plan or an individual retirement account (“IRA”) is in the “best interest” of the customer. Investment providers that make such rollover recommendations must comply with Prohibited Transaction Exemption 2020-02 (the “Exemption”) in order to retain investment related fees generated from that advice without running afoul of ERISA’s prohibited transaction rules. In general, advice is in a customer’s “best interest” if it is both prudent and loyal, and does not place the financial or other interests of the investment provider or financial institution ahead of the interests of the customer. As part of the rollover documentation and disclosure to customers, the following factors should be considered: (i) the customer’s alternatives to a rollover, including leaving the money in the plan, if permitted, and selecting… Continue Reading

IRS Introduces Pre-Examination Compliance Pilot Program

Starting this month, when the IRS selects a tax-qualified retirement plan for examination, it will notify the plan sponsor by letter and provide the sponsor a 90-day window to review the plan document and operations for compliance with all plan qualification requirements.   If the sponsor’s review reveals any operational or documentary failures that would otherwise qualify for self-correction under the IRS’s Employee Plan Compliance Resolution System (“EPCRS”), the sponsor will have the opportunity to self-correct those mistakes. If the plan sponsor’s review reveals any operational or documentary failures that, absent the examination, would require correction under the voluntary correction program (“VCP”) component of EPCRS, the sponsor can request a closing agreement, and the IRS will use the VCP fee structure to determine the sanction amount the sponsor will pay under the closing agreement.  The sponsor must notify the IRS of the errors discovered and the correction within the 90-day window. The… Continue Reading

California Meal and Rest Period Premium Payments Are Wages; How Does This Impact your Retirement Plan?

Under California law, employers who fail to provide the legally mandated meal or rest periods are required to pay nonexempt employees a meal and rest period “premium” payment equal to one hour of wages at the employee’s regular rate of pay. A number of lower court decisions in California were split as to whether such meal and rest period premium payments constituted a penalty payment or wages. In Naranjo v. Spectrum Security Services, Inc., the California Supreme Court settled the issue by holding that meal and rest period premium payments do constitute wages. As such, meal and rest period premium payments may also be covered under an employer’s retirement plan’s definition of compensation, meaning, among other things, that the meal and rest period premium payments may be subject to participant 401(k) deferrals and employer matching contributions. In light of this decision, any plan sponsor with employees in California should review… Continue Reading

It’s Time For Your Fiduciary Check-Up!

Due to the recent surge in ERISA litigation against employers and executives alleging, among other things, that they breached their fiduciary duties to plans and participants by allowing service providers to charge excessive fees, some fiduciary liability insurers have reportedly revamped their processes for evaluating applications for fiduciary liability coverage. These changes may impact an employer’s ability to obtain adequate fiduciary liability coverage, thereby increasing the exposure to plan sponsors and their executives.   Periodic fiduciary check-ups are always a good idea, but in light of these developments, it is perhaps more important than ever that plan sponsors conduct periodic internal reviews to ensure they continue to meet their fiduciary duties to their plans and participants. Among other things, responsible plan fiduciaries should:  Determine whether the committee (or committees) responsible for administering the plan and overseeing plan investments meets regularly and properly documents its meetings, including information on not just what… Continue Reading

IRS Provides Additional Extension of Temporary Relief from Physical Presence Requirement for Certain Retirement Plan Consents

In June 2020, we reported here regarding the temporary relief from the physical presence requirements for certain participant and beneficiary elections under qualified retirement plans provided in IRS Notice 2020-42 (the “Prior Notice”). As we also discussed in our prior blog posts here and here, the IRS provided two extensions of the temporary relief provided in the Prior Notice during the COVID-19 pandemic. In light of the continuing COVID-19 pandemic, the IRS recently issued Notice 2022-27 (the “2022 Notice”) to provide an additional extension of this temporary relief for six months, through December 31, 2022. The 2022 Notice extends temporary relief, under terms identical to those provided in the Prior Notice, from the “physical presence” requirement for any participant election required to be witnessed either by (i) a notary public of a state that permits remote electronic notarization, or (ii) a plan representative. Importantly, the 2022 Notice states that the extension… Continue Reading

BCBSTX Sued in Proposed Class Action for Alleged Violations of Mental Health Parity Rules

As we have discussed in prior blog posts here and here, noncompliance with the Mental Health Parity and Addition Equity Act (the “MHPAEA”) continues to be a source of significant potential legal liability for employers that sponsor group health plans as well as for their third-party claims fiduciaries or health insurers.  As further evidence of that trend, a proposed class action lawsuit has recently been filed against Blue Cross and Blue Shield of Texas (“BCBSTX”), as a designated claims fiduciary or health insurer under the class members’ employer-sponsored group health plans, for alleged violations of the MHPAEA. In particular, the class claims that BCBSTX imposed more restrictive standards on coverage of residential mental health care than the standards applied to coverage of care at skilled nursing facilities. Under the MHPAEA, employer-sponsored group health plans and health insurers that provide mental health or substance use disorder benefits are prohibited from imposing less… Continue Reading

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