• Posts by Lisa Wintersheimer Michel
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    Lisa Wintersheimer Michel is the leader of the Employee Benefits & Executive Compensation Group. Her practice primarily involves all aspects of qualified retirement plans, including profit sharing plans, 401(k) plans ...

Lawsuits by 401(k) plan participants related to employer stock in a 401(k) plan are nothing new. These lawsuits typically allege that ERISA plan fiduciaries failed to protect employees' retirement savings when the employer stock price falls. In the wake of the U.S. Supreme Court's Dudenhoeffer decision, which included the elimination of the presumption of prudence, these suits are often dismissed. However, during oral arguments for the case of IBM et al. v. Jander et al., the Supreme Court is now faced with reconciling the tension between federal securities law and ERISA ...

Plans and issuers will be required to use the new 2021 Summary of Benefits and Coverage (SBC) template in connection with coverage and plan years beginning on or after January 1, 2021. Updated instructions and other materials are also available on the agencies' websites. Specifically,

  • The new form revises the minimum essential coverage statement to reference the impact on premium tax credit eligibility, and removes the reference to the individual mandate (given the mandate has been effectively eliminated),
  • Likewise, the Uniform Glossary has removed references to the ...

This month the IRS announced increased retirement plan contribution limits for 2020. Employees in 401(k) plans will be able to contribute up to $19,500 next year, and the catch-up contribution limit for employees aged 50 and over has increased from $6,000 to $6,500. The complete list of notable employer retirement plan increases are summarized below:

The increased contribution limits for employer sponsored retirement plans stand in contrast to the more stagnant limits for IRAs: the limit on annual contributions to an IRA is unchanged at $6,000, along with the IRA ...

The Seventh Circuit recently issued a stern warning about the importance of strict compliance with ERISA claim review timeframes in holding that the “substantial compliance” standard “does not apply to blown deadlines.” In this case, Fessenden v. Reliance Standard Life Ins. Co. (7th Cir. 2019), the disability plan administrator issued a decision on review about eight days after the time prescribed by ERISA. In the short time period after the ERISA deadline expired and before the decision on review was rendered, the claimant filed suit as he was deemed to have ...

This year, we have seen a string of COBRA class actions seeking monetary penalties on account of defective COBRA notices. Most recently, in Hicks v. Lockheed Martin, the spouse of a former employee alleged various technical defects in Lockheed’s COBRA notice. Although on its face it appeared to include a good deal of required information, the Lockheed notice allegedly failed to state the COBRA coverage termination date, failed to provide an address to which payment should be sent, and failed to sufficiently identify the plan administrator. And, without this information, the ...

On October 22, 2019, the Department of Labor issued proposed rules intended to relax the current (and, in many respects, outdated) electronic disclosure rules. The proposed rules offer additional e-disclosure options and have the potential to save ERISA plans significant time and money. Notably, the proposed rule includes a new, voluntary safe harbor which would allow employers to make retirement plan disclosures via website, subject to certain requirements such as participant notifications and specific website standards. The rule would permit default electronic delivery ...

Has your employee sought premium tax credits (PTCs) for coverage under a health insurance marketplace? If so, this could be an opportunity for you to reduce your ACA penalty risk. When an employer receives notice from a health insurance marketplace that an individual is eligible for PTCs, the best course of action is to read the notice carefully and ask plenty of questions: What is the deadline to appeal? Is this individual still an employee? Are you an applicable large employer under the ACA? Is the employee full-time or part-time?  Was affordable, minimum value coverage offered to ...

In our August Monthly Minute, we touched on the precarious future of drug accumulator programs in light of recently released guidance that appeared to significantly limit their application and usefulness from a cost-management perspective.  Some of those fears have just been put to rest – for the time being. On August 26, 2019, new guidance was released that acknowledged certain ambiguities about the treatment of drug manufacturer’s coupons in circumstances other than in which there is a medically appropriate generic equivalent available. Although the new ...

On September 19, 2019, the final regulations were published making 401(k) hardships easier for participants. Although there are no major departures from last year’s proposed regulations, plan administrators will want to be aware of several key updates, including –

  • The list of safe harbor expenses that are considered to satisfy the “immediate and heavy financial need” threshold has been expanded: the home casualty hardship reason is not limited by IRC 165(h)(5) and need not be in a federally declared disaster area, and expenses incurred as a result of certain federally ...

The DOL recently released a final rule intended to provide small businesses with greater access to quality and affordable retirement plans.  The new rule, effective September 30, 2019, clarifies that a small employer group (association) -- such as employers in the same locale or particular industry/trade -- can band together and offer a defined contribution retirement plan to their employees through an Association Retirement Plan (“ARP”).  This significantly relaxes the “commonality” standard previously required for separate employers to offer a combined retirement ...

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