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DOL Rules that Audio Recordings and Transcripts of Telephone Conversations with Plan?ÇÖs Insurer may have to be Disclosed

The DOL recently issued Information Letter 06-14-2021 addressing whether the claims procedure regulations under ERISA require plan fiduciaries to provide, upon request, the audio recording and transcript of a telephone conversation between a claimant and a representative of the plan?ÇÖs insurer relating to an adverse benefit determination. The claims regulations under ERISA provide that a document, record, or other information is relevant to a claim for benefits, and therefore must be provided to a claimant upon request, if it (i) ?Ç£was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination?Ç¥ or (ii) ?Ç£demonstrates compliance with the administrative processes and safeguards.?Ç¥ The DOL concluded that a recording or transcript of a conversation between a claimant and a plan?ÇÖs insurer would not be excluded from the ERISA disclosure requirements on the… Continue Reading

Group Health Plan Service Contracts Trigger Compensation Disclosures

Among the new requirements that are, or soon will be, imposed on employer-sponsored group health plans subject to ERISA (?Ç£GHPs?Ç¥) by the Consolidated Appropriations Act of 2021 (the ?Ç£CAA?Ç¥) are compensation disclosure requirements which apply to GHPs and certain of their third-party service providers. Background ERISA contains prohibitions on certain transactions between an employee benefit plan, including a GHP and a party-in-interest, such as a third-party service provider.?á Section 408(b)(2) of ERISA provides an exemption from the prohibited transaction rules for reasonable contracts entered into by a plan and a service provider for necessary plan-related services (?Ç£Contract?Ç¥), provided that no more than reasonable compensation is paid for such services (the ?Ç£Prohibited Transaction Exemption?Ç¥). The relevant fiduciary of the plan under ERISA (the ?Ç£Fiduciary?Ç¥) is responsible for determining whether compensation to be paid under the Contract is reasonable in order to comply with the Prohibited Transaction Exemption. Disclosure Requirement under the… Continue Reading

DOL Increases Civil Monetary Penalties for Certain ERISA Violations

The DOL recently issued a final rule that adjusts for inflation the amounts of civil monetary penalties assessed or enforced in its regulations, including for certain ERISA violations. The adjusted penalty amounts apply to penalties assessed after January 15, 2021 and for which the associated violations occurred after November 2, 2015. Some of the penalties that were increased include the following: The maximum penalty for failing to properly file a pension or welfare benefit plan?ÇÖs annual Form 5500 increased from $2,233 per day to $2,259 per day. The maximum penalty for failing to provide notices of blackout periods or of the right to divest employer securities increased from $141 per day to $143 per day (each statutory recipient is a separate violation). The maximum penalty for failing to provide employees the required Children?ÇÖs Health Insurance Program (CHIP) coverage notices increased from $119 per day to $120 per day (each employee… Continue Reading

Get Ready to Update HIPAA Privacy Policies Next Year

Last week, HHS issued a Notice of Proposed Rulemaking that proposes changes to the HIPAA Privacy Rule that will affect HIPAA privacy policies and procedures for employer group health plans.?á The proposed revisions affect (i) an individual?ÇÖs right to access ?Ç£protected health information?Ç¥ (?Ç£PHI?Ç¥), (ii) the content required in the Notice of Privacy Practices, and (iii) the ability to use and disclose PHI based on professional judgment, to avert a threat to health or safety, or for coordination of care and case management.?á HHS proposed that compliance with the changes would be required within 180 days after the effective date of a final rule.?á HHS has requested comments on the proposed changes within 60 days after their publication in the Federal Register, which publication should occur soon.?á The Notice of Proposed Rulemaking is available here.

Regulations Provide for More Cost Transparency in Health Coverage

The federal Departments of Health and Human Services, Labor, and the Treasury (collectively, the ?Ç£Departments?Ç¥) have jointly issued final regulations that are intended to provide for more transparency in health coverage (the ?Ç£Regulations?Ç¥). The Regulations have important implications for employer sponsors of certain group health plans (?Ç£Plans?Ç¥) and health insurers. The Regulations do not apply to health plans that are grandfathered under the Affordable Care Act, health reimbursement arrangements, certain other account-based group health plans, or short-term limited duration insurance. The Regulations require two key forms of disclosures (collectively, the ?Ç£Disclosures?Ç¥) in order to provide for this improved transparency: Self-Service Disclosure. First, the Regulations require Plans and insurers in the individual and group markets to disclose certain cost-sharing information upon request to a participant, beneficiary, or enrollee (or his or her authorized representative), including (a) an estimate of the individual?ÇÖs cost-sharing liability for covered items or services furnished by a… Continue Reading

The DOL Announces Final Rule for Electronic Delivery of ERISA-Required Retirement Plan Disclosures

The DOL recently announced a final rule which provides an additional ?Ç£Notice-and Access?Ç¥ safe harbor for plan administrators to electronically deliver ERISA-required notices and disclosures. The final rule is substantially similar to the proposed rule (which we discussed in a previous blog post here). Under the final rule, plan administrators may electronically deliver certain ?Ç£covered documents?Ç¥ to ?Ç£covered individuals?Ç¥ with electronic addresses by (i) posting the covered documents on a website and sending a notice of Internet availability (?Ç£NOIA?Ç¥) to the covered individual?ÇÖs electronic address or (ii) sending covered documents directly to a covered individual?ÇÖs electronic address. The NOIA may be sent on an annual basis, describing multiple covered documents, and must include (x) a description of the covered documents being posted, (y) the address of or hyperlink to the website where the covered documents are posted, and (iii) information about the covered individual?ÇÖs right to request covered documents in… Continue Reading

DOL Issues Relief for Plan Fiduciaries

The DOL’s Employee Benefits Security Administration (?Ç£EBSA?Ç¥) recently issued EBSA Disaster Relief Notice 2020-01. Notice 2020-01 applies to employee benefit plans, employers, labor organizations, and other plan sponsors, plan fiduciaries, participants and beneficiaries, and service providers subject to ERISA. Notice 2020-01 remains in effect from March 1, 2020 until 60 days after the announcement of the end of the presidentially declared national emergency due to COVID-19 (the ?Ç£National Emergency?Ç¥). Untimely Notice Relief Fiduciaries of ERISA plans generally have an obligation to provide notices and disclosures in accordance with the timing requirements of ERISA. However, under Notice 2020-01, the employee benefit plan and the responsible plan fiduciary will not be considered to violate ERISA for failing to timely furnish a notice, disclosure, or document that must be furnished between March 1, 2020 and 60 days after the announced end of the National Emergency, if the plan and responsible fiduciary act in… Continue Reading

SEC Proposes Rules Requiring New Pay-for-Performance Disclosure

On April 29, 2015, the U.S. Securities and Exchange Commission (the “SEC“) voted to propose rules under Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requiring companies to disclose the relationship between executive compensation actually paid and the financial performance of the company. ?áThis new “pay-for-performance” disclosure (the “Disclosure“) would include information for the company and peer group companies set out in a table that is incorporated into the proxy or other information statements in which executive compensation disclosure is required. ?áThe Disclosure would present (a) executive compensation actually paid for the principal executive officer (i.e., the total compensation as disclosed in the proxy statement’s summary compensation table (the “SCT“), with adjustments for pension and equity award amounts); (b) the average compensation actually paid to the remaining named executive officers identified in the SCT; and (c) the total annual shareholder return of the company and its… Continue Reading

SEC Proposes Rule Requiring CEO Pay Ratio Disclosures

The SEC recently released a proposed rule that would require public companies to disclose the median annual total compensation of all their employees and the ratio of such median to the annual total compensation of their CEO.?á This requirement is commonly known as the ?Ç£pay ratio disclosure?Ç¥ requirement.?á?áThe proposed rule can be found?áhere.

DOL Allows 401(k) Plans to Reschedule Disclosure of Investment Comparative Chart

The Department of Labor (DOL) issued Field Assistance Bulletin 2013-02, which provides temporary enforcement relief with respect to the deadline for plan administrators of participant-directed individual account plans (e.g., 401(k) plans) to distribute the comparative chart of investment options. ?áIn general, the initial disclosure was due no later than August 30, 2012, with succeeding annual disclosures due no later than the one-year anniversary of the initial disclosure. ?áUnder the new guidance, plan administrators may reset the deadline one time, for either the 2013 or 2014 comparative chart, if (i) the plan fiduciary determines that doing so will benefit the plan?ÇÖs participants and beneficiaries, and (ii) no more than 18 months pass before the participants receive their next comparative chart. A copy of the guidance is available here.

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