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Self-Funded ERISA Health Plans May Opt Into New Law Regarding Out-of-Network Service Providers

New Jersey recently enacted a law that is intended to address the issue of “surprise out-of-network charges” to patients who obtain healthcare from healthcare providers in New Jersey. The law, entitled the “Out-Of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act” (the “NJ Act”), applies with respect to patients who have insured health coverage, but may also apply to patients who participate in employer-sponsored, self-funded health plans subject to ERISA (each, a “Self-Funded Health Plan”) if such plans voluntarily “opt in” to the NJ Act. The NJ Act imposes numerous new disclosure obligations on healthcare providers in New Jersey regarding information to be posted on their websites or delivered directly to patients who will receive their services. Such information includes (i) the provider’s network status with respect to the patient’s health benefit plan, (ii) a listing of the standard charges for items and services provided by a healthcare facility and… Continue Reading

Oracle v. Google – Redefining The Applicability and Scope of The Fair Use Defense for Software

2018 Summer Associate Mira Park contributed to this post. On March 27, 2018, in Oracle America Inc. v. Google LLC, No. 17-1118 (Fed. Cir. 2018), the Court of Appeals for the Federal Circuit held that Google’s use of Oracle’s software code did not constitute a fair use and remanded for a trial on damages. Oracle is the copyright owner of the “declaring code”, as well as the structure, sequence, and organization (“SSO”) of the Java application programming interface (“API”) packages at issue in this case. A Java API package is a collection of pre-written Java source code programs for providing computer functions, and allows programmers to provide desired functions into their own programs without the need to write the corresponding code from scratch. In 2005, Google wrote its own code to run programs written in the Java language on its Android platform, but used the declaring code verbatim (i.e. 11,500… Continue Reading

Association Health Plan Final Regulations Issued

The DOL released final regulations expanding the groups of employers that may participate in one ERISA-covered employee group health plan (an “Association Health Plan”). Generally, employers (including working owners with no employees) may participate in an Association Health Plan as long as they are in the same industry, state, or metropolitan area. A major benefit of joining together to participate in one ERISA-covered group health plan, as opposed to being treated as maintaining separate ERISA group health plans, is that the total number of employees participating in the Association Health Plan, from all participating employers, will determine whether the Association Health Plan is treated as “large group,” “small group,” or individual coverage for purposes of the mandates under the Affordable Care Act (the “ACA”). The ACA places a number of requirements on small group and individual coverage that do not apply to large group health plans. An Association Health Plan… Continue Reading

$4.3 Million in Civil Monetary Penalties Awarded for Encryption Failures under HIPAA

An administrative law judge for HHS upheld an award of $4.3 million in civil monetary penalties (the “Penalties”) against a Texas-based healthcare provider for violations of the HIPAA privacy and security rules (the “HIPAA Rules”). The provider is a “covered entity” under HIPAA (“CE”), and the Penalties are the fourth largest ever awarded to the Office of Civil Rights (“OCR”), 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 (“EPHI”) of over 33,500 individuals. OCR’s investigation found that, although the CE had written encryption… Continue Reading

Consider Periodic Internal Plan Audits to Ensure Proper Application of Plan’s Definition of “Compensation”

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’s definition of compensation typically includes dozens of components that all must be properly coded in the plan sponsor’s payroll system as eligible or ineligible plan compensation. Plan sponsors should periodically compare the plan’s definition of “compensation” to the employer’s 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.

Employer Document Retention Policies: Relevant ERISA Requirements

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 “as long as any possibility exists that they might be relevant to a determination of benefit entitlements.” Employers should ensure that their document retention policies have been reviewed for consistency with… Continue Reading

Plan Loans: Plan Document and Forms May Require Updates Due to Tax Reform

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’s 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’s federal income tax return for the year in which the plan loan offset occurred. Plan sponsors should confirm… Continue Reading

IRS Increases ACA Employer Affordability Percentage for 2019

Generally, the Affordable Care Act (the “ACA”) requires coverage under a group health plan sponsored by an “applicable large employer” (at least 50 full-time equivalent employees) to be “affordable”, as determined under the ACA, in order to avoid certain ACA penalties. “Affordability” is based on whether the premium for employee-only coverage is less than a certain percentage of an employee’s 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).  In a case of first impression, the court held that “specific elements from within a television show—as opposed to the title of the show itself—[can] receive trademark protection.” Viacom is the owner of SpongeBob SquarePants, an animated television series created for Viacom’s Nickelodeon Network that first premiered in 1999, and recently renewed for a twelfth season.  The series follows the life of the title character, SpongeBob SquarePants, and his friends in the underwater town of Bikini Bottom.  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

IRS Releases 2019 Inflation-Adjusted Amounts for HSAs and HDHPs

The IRS recently issued Revenue Procedure 2018-30, which sets the 2019 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 2019 limits are as follows: Annual HSA contribution limits: $3,500 for self-only coverage ($50 increase from 2018); $7,000 for family coverage ($100 increase from 2018) Minimum HDHP deductibles: $1,350 for self-only coverage (no change from 2018); $2,700 for family coverage (no change from 2018) HDHP out-of-pocket maximum limits: $6,750 for self-only coverage ($100 increase from 2018); $13,500 for family coverage ($200 increase from 2018) View Rev. Proc. 2018-30.

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