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Fourth Circuit: Plan Administrator Must Obtain “Readily Available Information” in Claims Determination

What is a plan administrator’s obligation under ERISA to seek and obtain information potentially relevant to a participant claim where the participant has not provided it? The Fourth Circuit recently provided guidance on that issue in the case of Harrison v. Wells Fargo Bank, N.A. A copy of that opinion is available here.

Nancy Harrison was an online customer service representative for Wells Fargo Bank. In 2011, she underwent a thyroidectomy to remove a large mass that had extended into her chest and which caused chest pain and tracheal compression. She was unable to work and received short-term disability benefits under the Wells Fargo plan. While she was recovering and waiting for a second, more invasive surgery, her husband died unexpectedly, triggering a recurrence of depression and post-traumatic stress disorder (PTSD) related to the death of her children in a house fire a few years before.

Being Proactive v. Reactive – ACA’s Prohibition on Discrimination in Group Health Insurance

Back in 2010, the ACA enacted a new rule prohibiting insured group health plans from “discriminating” (on the basis of eligibility or provision of benefits) in favor of highly compensated individuals (called “HCIs”). This rule generally became effective January 1, 2011 for calendar year plans; however, there is and has been an enforcement delay pending issuance of IRS regulations. We’ve heard through the grapevine that this is a “high priority” item for the Service, but to date we’ve seen nothing.

Once guidance is issued, we expect a flurry of changes in group health insurance plans and separation practices. The days of “one-off” arrangements for the benefit of separating executives (i.e., terminated exec can stay on active plan and/or receive contributions like an active employee) are likely going to be a thing of the past.

Unless a plan has and continues to have “grandfathered status” (as defined under the statute and

Individual Mandate Regulations Address Affordability – And Why Employers May Care

December 16, 2014

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ACAJust before Thanksgiving, the IRS issued final regulations on the individual mandate under the Affordable Care Act (“ACA”). The individual mandate requires individuals to maintain health insurance (i.e., “minimum essential coverage”) or pay a penalty.

The regulations adopt in part, and clarify proposed regulations addressing how affordability of employer-sponsored coverage is determined for purposes of the regulations and certain types of exemptions from the individual mandate for individuals who cannot afford coverage. This matters to employers because it could impact whether they will be required to pay a play or pay penalty. If employer-sponsored coverage is unaffordable, and the employee does not enroll in it, then the employee may be eligible for a premium tax credit for ACA Marketplace/Exchange coverage. Receiving that tax credit could

Reimbursing Employees for Individual Health Insurance Policies Subjects Employers to Hefty Excise Taxes

What, you may ask? That’s right. It no longer works to reimburse employees for the purchase of an individual health insurance policy. I know, many of you have always done this. Well, not any longer under guidance issued under the Affordable Care Act (ACA). Beginning with an IRS Notice issued in September 2013 and most recently in November 2014 DOL FAQs, the federal government has made it clear that this practice does not work under the ACA. While it flew under the radar for some, this rule became effective in 2014.

 

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Why, you may ask? When an employer reimburses an employee for an individual health insurance premium, or pays the premium directly to the insurer, it has (perhaps inadvertently) established a “group health plan” which is subject to the so-called

Eligible Rollover Distributions – Safe Harbor Notices Revised

Eligible Rollover Distributions – Safe Harbor Notices Revised

December 2, 2014

Authored by: benefitsbclp

In Notice 2014-74, the Internal Revenue Service (“IRS”) issued amendments to the safe harbor eligible rollover distribution notices – one of which describes the rollover options available to distributions from non-Roth accounts and the other of which describes the rollover options that apply to distributions from designated Roth accounts – for changes in the law and other clarifying changes.  Several of the changes in the non-Roth account notice address the tax effects of in-plan Roth rollovers.  Other changes to both notices incorporate guidance from  IRS Notice 2014-54, which provides an explanation of the allocation of pre-tax and after-tax amounts between distributions to multiple destinations – direct rollover, indirect rollover, directly to participant, traditional IRA and/or Roth IRA.

The descriptions in the safe harbor notices of the tax effects of in-plan Roth rollovers and other distribution choices can be helpful language for participant communications, including

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