A new California state law requires an employer to notify its employees who participate in a flexible spending account (including health, dependent care, or adoption assistance flexible spending accounts) of any deadline to withdraw their funds before the end of the plan year. The employer must provide such notice in at least two of the following five forms, only one of which may be electronic: (i) email, (ii) telephone, (iii) text message, (iv) postal mail, or (v) in-person. Given that many flexible spending accounts have run-out periods that extend after a plan year ends, it appears that this notice requirement would apply when there is a termination of employment or other loss of coverage that requires submission of claims before the end of the plan year. However, the legislative history indicates that the statute is concerned with the “use it or lose it” rule for flexible spending accounts. Guidance under… Continue Reading
Registration now open! Insurance professionals and counsel are invited to attend our 4th Annual Texas Insurance Academy Conference on October 24, 2019, at the Haynes and Boone office in Dallas, Texas. Attendees can expect to learn from risk managers, coverage counsel and brokers about important insurance issues affecting businesses from a broad range of industries. Our experienced panels will share their knowledge on how to navigate through a hard market, including: • State of Play: Hardening Insurance Markets • Factors Driving the Hardening Market • Top 10 “Don’ts” When Negotiating Your Policy • Important Developments in Texas Insurance Law • Strategies for Dealing with the Hardening Market • A Look at Future Risks Date: Thursday, October 24, 2019Time: 7:45 a.m. – 4:30 p.m.Location: Haynes and Boone, LLP, 2323 Victory Avenue, Suite 700, Dallas, TX 75219 Register HereAgenda For more event information please email Patricia Kirven. About the Texas Insurance Academy: The… Continue Reading
Chevron Deference and the USPTO’s Determination of Applicant Delay in the Calculation of Patent Term Adjustment
Angela Oliver, Associate, Haynes and Boone, LLP With administrative law principles becoming increasingly important in patent law, a recent decision from the Federal Circuit highlights the relevance of those principles in patent prosecution. In Intra-Cellular Therapies, Inc. v. Iancu, the Federal Circuit extended Chevron deference to the USPTO’s determination that an applicant’s failure to submit a proper reply to a final Office action constituted “fail[ure] to engage in reasonable efforts to conclude prosecution of the application” under 35 U.S.C. § 154(b)(2)(C)(i), thus resulting in the accrual of applicant delay for patent term adjustment purposes. Congress set forth the framework for calculating patent term adjustment (“PTA”) in 35 U.S.C. § 154(b) (“the PTA statute”). Section 154(b)(1) enumerates the types of Patent Office delay that will lead to PTA accrual, while § 154(b)(2) provides that PTA may be reduced for delays caused by an applicant. The dispute in Intra-Cellular Therapies pertained to the calculation of… Continue Reading
Health plans that offer prescription drug coverage must distribute the Annual Medicare Part D Notice of Creditable Coverage (the “Notice”) prior to October 15, 2019. The Notice informs participants whether the plan’s prescription drug coverage constitutes creditable or non-creditable coverage. Employers must provide the Notice to all Medicare-eligible participants and dependents. The Centers for Medicare and Medicaid Services has posted forms and instructions for providing this Notice, which are available here.
In Kinsinger, a federal district court in North Carolina significantly penalized a plan administrator that failed to timely respond to employees’ request for plan documents related to an employer-sponsored group health plan subject to ERISA. The documents were not provided until 748 days after the ERISA required 30-day period to provide documents had expired, and then only in response to a lawsuit claiming an ERISA fiduciary breach for misappropriating employee contributions. The federal district court assessed a penalty of $55 per day (half of the statutory maximum of $110 dollars per day) for the failure to provide the required documents—a penalty determined by the court to reflect “both the egregiousness of the [plan administrator’s] misconduct as well as the extraordinary length of delay.” This opinion serves as a cautionary warning to ERISA plan administrators to not ignore document requests; however, not all documents requested by plaintiff’s attorneys are required to… Continue Reading
Jason Whitney, Counsel, Haynes and Boone, LLP After the U.S. Supreme Court tightened the requirements of 35 U.S.C. Section 112 in Nautilus, Inc. v. Biosig Instruments, Inc. by holding that claims must describe “the scope of the invention with reasonable certainty,” some envisioned the possibility of a reinvigorated indefiniteness standard standing as a bulwark against overly broad or vaguely drafted patent claims. Indeed, just months after Nautilus, the Court of Appeals for the Federal Circuit hinted at such a future with Interval Licensing LLC v. AOL, Inc., which established the rule that terms of degree “must provide objective boundaries” for claimed inventions. But as the Federal Circuit has continued to define the contours of Nautilus over the following years, indefiniteness attacks have met uneven success and produced inconsistent application of Section 112. The Federal Circuit’s recent opinion in Guangdong Alison Hi-Tech Co. v. ITC, which examined the term of degree… Continue Reading
The IRS recently published final regulations addressing changes enacted by the Tax Cuts and Jobs Act of 2017, the Bipartisan Budget Act of 2018, and other prior changes to the tax code. The final regulations do not contain any substantive differences to the proposed regulations issued by the IRS in November 2018. The new final regulations: • Permit, but do not require, hardship distributions from a participant’s elective contributions, QNECs, QMACs (including safe harbor matching contributions), and any earnings on those amounts, regardless of when they were contributed or earned. • Prohibit plans from containing a requirement that a participant may not contribute to the plan for any period of time following a hardship distribution (in other words, eliminate the six-month suspension rule). • Eliminate the requirement that a participant take out all available plan loans before receiving a hardship distribution (although plans may continue to contain such a requirement).… Continue Reading
HHS’s Office for Civil Rights(“OCR”), which is the government agency responsible for enforcement of the HIPAA privacy, security, breach notification, and enforcement rules (the “HIPAA Rules”), recently issued a new fact sheet (“Fact Sheet”). The Fact Sheet recaps the provisions in the HIPAA Rules for which a HIPAA business associate may be held directly liable for compliance. HIPAA business associates of an employer-sponsored group health plan, which is a “covered entity” under HIPAA, would include, for example, the health plan’s third-party claims administrator, a health plan consulting firm, a benefits broker, and the health plan’s outside legal counsel, if such persons or entities create, receive, maintain, or transmit HIPAA protected health information (“PHI”) on behalf of the health plan. The Fact Sheet clarified that OCR has authority to take enforcement action against business associates only for certain requirements and prohibitions of the HIPAA Rules as listed in the Fact Sheet,… Continue Reading
In MTD Products Inc. v. Iancu, the U.S. Court of Appeals for the Federal Circuit described how to identify a means-plus-function limitation under 35 U.S.C. § 112, ¶ 6. In particular, the court clarified that the question of whether § 112, ¶ 6 applies is distinct from the determination of what structure corresponds to the means-plus-function limitation, and held that the description in the specification of corresponding structure does not determine if § 112, ¶ 6 applies. MTD is a decision on appeal from an inter partes review (“IPR”) of U.S. Patent No. 8,011,458 (“the ’458 patent”), owned by MTD Products. The ’458 patent describes zero turn radius (“ZTR”) vehicles such as riding lawnmowers, and explains how for prior art ZTR steering systems, when a vehicle was moving forward, it turned in the direction the steering wheel was rotated, but when the vehicle was moving in reverse, it turned… Continue Reading
Federal Departments Announce No Enforcement Action Regarding Drug Manufacturer Coupons Counting Toward Out-of-Pocket Maximums
HHS’s 2020 Notice of Benefit and Payment Parameters (“NBPP”) provides that a group health plan does not have to count drug manufacturer coupons for brand-name drugs towards an annual out-of-pocket maximum if there is a medically appropriate generic equivalent. Many questions were raised by this rule, including (i) how it interacted with health savings account guidance and (ii) what types of arrangements and/or plans to which it applied. The DOL, HHS, and the Treasury Department (collectively, the “Departments”) announced in an FAQ (available here) that the Departments will not initiate any enforcement action if a group health plan does not count the value of drug manufacturer coupons toward an out-of-pocket maximum. This no enforcement policy lasts until HHS’s 2021 NBPP becomes effective, and the 2021 NBPP should clarify how this rule affects employer-sponsored group health plans.