DOL Publishes FAQs on Employer Retirement Plan Obligations to Reemployed Service Members Under USERRA
The DOL recently published a series of frequently asked questions (“FAQs”) on its website that provide general guidance to employers on their retirement plan obligations to reemployed service members under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”). Among other things, the FAQs address (i) what military service must be credited for purposes of determining retirement benefits, (ii) an employer’s obligation to make retirement plan contributions while an employee is on a qualifying military leave of absence, and (iii) an employee’s right to make up missed contributions when he or she is reemployed following a qualifying military leave of absence. The FAQs are available here.
The DOL has updated the model notice that employers providing group health coverage may use to notify eligible employees about Medicaid or the Children’s Health Insurance Program (“CHIP”) premium assistance programs available in their home states. Employers must provide this notice before the start of the plan year. The updated model CHIP notice is available here.
Generally, the Affordable Care Act (“ACA”) requires group health plan coverage sponsored by large employers to be “affordable” in order to avoid certain 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 an applicable safe harbor amount. In Notice 2019-29, the IRS announced that the affordability percentage for 2020 would decrease to 9.78% from 9.86% in 2019. Employers should note this change as they set premiums for 2020. Notice 2019-29 is available here.
In Samsung Electronics Co., Ltd. v. Infobridge Pte. Ltd., the Court of Appeals for the Federal Circuit (“the CAFC”) addressed the legal standard for assessing the public accessibility of prior art documents before a patent’s critical date. Appeal No. 18-2007 (Fed. Cir. July 12, 2019). This case arises from an appeal by Samsung to decisions by the Patent Trial and Appeal Board (“the Board”) in two inter partes review proceedings which upheld all challenged claims of U.S. Patent 8,917,772 (“the ’772 patent”) owned by Infobridge. In each proceeding, the Board found that Samsung failed to show that a certain prior art reference was publicly accessible before the critical date for the ’772 patent, and thus could not be considered prior art. The CAFC vacated the Board’s decision, holding that that the correct standard for public accessibility is whether a person of ordinary skill in the art could, after exercising reasonable… Continue Reading
A recent decision from the U.S. Court of Appeals for the Fifth Circuit highlights that a qualified domestic relations order (“QDRO”) can be valid and enforceable even if it is issued after a participant’s death. In Miletello v. RMR Mechanical, Inc., the Fifth Circuit affirmed an award to the former spouse of a deceased 401(k) plan participant, even though (i) the QDRO in favor of the former spouse was not entered into until over a year after the participant’s death, and (ii) the participant was married to a new spouse at the time of his death. Importantly, a divorce settlement executed by the former spouse and the decedent before his death explicitly provided for the award from the 401(k) plan and contemplated that the former spouse would obtain a QDRO to receive the 401(k) plan assets. A copy of the Fifth Circuit’s opinion is available here.
A frequent, but often times avoidable, operational error for retirement plans is the failure to use the proper definition of “compensation” for various plan 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 either eligible or ineligible plan compensation. One such component that is frequently misclassified is the value of employee equity awards, such as stock options and restricted stock. Accordingly, 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 relevant plan purposes. Performing such an audit can help identify any errors and minimize the amount of corrective contributions and other fees or expenses that may be associated with correcting the error.
In Mayne Pharma International Pty. Ltd. v. Merck Sharp & Dohme Corp., (Fed. Cir. June 21, 2019), the Federal Circuit affirmed the decision of the Patent Trial and Appeal Board (“Board”) permitting the petitioner to include an additional real party in interest in its mandatory notice without altering the petition’s filing date. Background Merck Sharp & Dohme Corp. (“MSD”) filed a petition for inter partes review against U.S. Patent Number 6,881,745 (“the ’745 patent”) assigned to Mayne Pharma International Pty. Ltd. (“Mayne”). In its Patent Owner’s Preliminary Response, Mayne urged the Board to decline institution because MSD’s parent company, Merck & Co., Inc. (“MCI”), was not identified as a real party in interest. Based on the record at that time, however, the Board was not persuaded and instituted review. Mayne then requested rehearing, arguing that the Board abused its discretion. The Board rejected this argument and maintained the proceeding. During… Continue Reading
Fifth Circuit Defers to Plan Administrator’s Claim Appeal Decision Involving Competing Medical Opinions
In Rittinger v. Health Alliance Life Insurance Company, the U.S. Court of Appeals for the Fifth Circuit, whose jurisdiction includes Texas, analyzed the claims decision-making process of a group health plan administrator that had been granted discretion under the terms of the employer’s group health plan. The court determined that, based on such grant of discretion, the plan administrator’s decision regarding a participant’s benefits claim appeal was entitled to judicial deference, even with respect to the plan administrator’s selection of competing medical providers’ opinions. Background regarding Grant of Discretion under ERISA Under general standards, a court will consider denials of appealed benefits claims under an employer-sponsored employee benefit plan (including a group health plan) that is subject to ERISA on a “de novo” basis, which means that the court will not give any deference to the plan administrator’s prior decision on a benefit claim appeal, but instead can substitute its… Continue Reading
In BTG Int’l Ltd. v. Amneal Pharms. LLC (Fed. Cir. May 14, 2019), the Federal Circuit affirmed the decisions of the Patent Trial and Appeal Board (PTAB) and the District Court in a consolidated appeal addressing whether generic versions of an anti-cancer drug infringed the claims of U.S. Patent No. 8,822,438 (the ’438 patent) held by BTG International Ltd (BTG). The PTAB and the District Court found that the asserted claims of the ’438 patent were obvious and therefore invalid. The Federal Circuit focused on one of the final written decisions of the PTAB, which it affirmed, rendering the remaining appeals moot. Background BTG produces Zytiga (abiraterone acetate), a CYP17 inhibitor used in conjunction with prednisone to treat refractory prostate cancer. The ’438 patent discloses a method to treat cancer by administering a therapeutically effective amount of a CYP17 inhibitor and a therapeutically effective amount of… Continue Reading
Final regulations were recently released by the U.S. Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) which create two new options for providing employer-sponsored group health coverage under a health reimbursement arrangement (“HRA”). The Departments also issued a set of FAQs which outline key points regarding these new HRA options and other changes reflected in the regulations. An HRA is a type of account-based health plan that employers may use to reimburse employees for their medical care expenses. Individual Coverage HRA The first option, an “Individual Coverage HRA,” may be offered by employers as an alternative to coverage under a traditional group health plan (“Traditional GHP”), subject to certain conditions. In effect, Individual Coverage HRAs extend the federal tax advantages that are afforded to Traditional GHPs (i.e., exclusion of premiums and benefits received from federal income and payroll taxes) to HRA reimbursements of an individual’s… Continue Reading