Federal agencies recently issued updated versions of certain documents that are required to be disclosed to individuals under applicable employer-sponsored group health plans. A set of FAQs regarding the Affordable Care Act (“ACA”) was issued by the federal Departments of Labor (“DOL”), Health and Human Services (“HHS”), and Treasury (collectively, the “Departments”), which describe recent changes made by the Departments to the “summary of benefits and coverage” template under the ACA (“SBC”). Among other minor changes to the SBC, certain verbiage on the SBC and the associated uniform glossary were revised to reflect the prior elimination, as of January 1, 2019, of the tax penalty related to an individual’s failure to comply with the so-called “individual mandate” under the ACA. The FAQs also provide additional guidance regarding the updated SBC coverage examples calculator that was released by HHS late last year. The revised SBC and SBC coverage examples calculator each… Continue Reading
DOL Issues Proposed Regulations for Electronic Delivery of ERISA-Required Retirement Plan Disclosures
The DOL recently issued proposed regulations which provide a “Notice-and-Access” safe harbor for the electronic delivery of ERISA-required disclosures. Under the proposed regulations, plan administrators can fulfill their obligation to provide these disclosures by making the information accessible online and by sending a notice of Internet availability (“Internet Availability Notice”) of the disclosures to participants’ e-mail addresses. The Internet Availability Notice must include a brief description of the document being posted online, a website address where the document is posted, and instructions for requesting a free paper copy of the disclosures or electing paper delivery of such disclosures in the future. Although the Internet Availability Notice must generally be sent each time a disclosure is posted online, the proposed regulations would allow a plan administrator to combine such notices in certain circumstances. The proposed regulations only apply to retirement plans, not health and welfare plans, and a plan administrator must… Continue Reading
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.
The U.S. Department of Labor has released updated model Summary Annual Reports (“SARs”) for retirement plans and for welfare benefit plans that are subject to ERISA. Generally, a plan that is required to file an annual Form 5500 is also required to distribute a SAR to plan participants and beneficiaries within nine months from the end of the plan year. View the updated model SAR for welfare plans. View the updated model SAR for retirement plans.
When participants in a qualified retirement plan terminate employment with the plan sponsor, it can be challenging to ensure that their contact information in the plan’s records is kept up to date and accurate. Inaccurate contact information is problematic for a variety of reasons, including potentially causing an operational failure when such participants do not receive distribution of their plan benefits by their required distribution date, as well as increasing the possibility of fraud when a participant’s information is sent to the wrong address. In addition, a plan sponsor’s failure to make reasonable efforts to locate missing participants would be a breach of their fiduciary duties of loyalty and prudence. Often, the first indication that a participant may be missing is that mail sent to their last known address is returned undeliverable or their distribution checks are returned or remain uncashed. In addition, a plan sponsor should check to see… Continue Reading
Under ERISA, a participant in an ERISA-covered plan has the right to designate an authorized representative to act on his or her behalf in connection with claims and appeals. The plan may establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant. Earlier this year, the DOL issued an information letter stating, in part, that: “The plan must include any procedures for designating authorized representatives in the plan’s claims procedures and in the plan’s summary plan description (“SPD”) or a separate document that accompanies the SPD.” Employers that sponsor ERISA plans should (i) verify that the claims procedures in each plan and SPD contain reasonable procedures for designating authorized representatives and (ii) amend the plan and SPD as needed. View the DOL information letter.
In its recent decision in State of New York v. U.S. Department of Labor, the federal district court for the District of Columbia vacated key provisions of the final regulations issued in 2018 by the DOL under ERISA regarding the establishment of “association health plans” (the “Final Regulations”). The Final Regulations broadened the criteria under ERISA for determining when a group of employers may join together as a “single employer” to sponsor a single group health plan in the form of an association health plan (“AHP”). The Final Regulations were applicable to fully-insured AHPs as of September 1, 2018, to existing self-funded AHPs as of January 1, 2019, and to newly created self-funded AHPs as of April 1, 2019. See our prior blog post for additional information regarding the Final Regulations. In response to the Final Regulations, 11 states and the District of Columbia sued the DOL alleging that (i) key… Continue Reading
When participants in qualified retirement plans are no longer current employees of the plan sponsor, it can be challenging to ensure that the contact information in the plan’s records is up to date and accurate. However, inaccurate contact information in the plan’s records is problematic for a variety of reasons, including causing operational failures when participants do not receive distribution of benefits by the plan’s required distribution date and increasing the possibility of fraud when a participant’s information is sent to the wrong address. Plan administrators should review their procedures for locating missing participants and ensure that they are (1) consistent with available guidance from the IRS and the DOL, (2) appropriate for the plan and its participant population, and (3) being followed consistently by the plan administrator or its delegate. Plan administrators should also document any steps undertaken to locate missing participants. The plan’s procedures should also address how… Continue Reading
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