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FMLA Final Rule Defining Spouse Will Not Be Enforced in Four States – For Now

On the eve of the March 27, 2015 effective date for the DOL’s final rule amending the definition of “spouse” under the federal Family and Medical Leave Act (“FMLA”), a Texas district court preliminarily enjoined the rule’s application to the states of Texas, Arkansas, Louisiana and Nebraska. The case is Texas v. U.S., No. 7:15-cv-0056 (N.D. Texas 2015) and the full opinion may be found here.

Under the final rule, employers must look to the state where the marriage was entered into (instead of the state in which the employee resides) to determine the employee’s spouse. The revised definition of spouse includes same-sex marriages, common law marriages, and same-sex marriages entered into abroad that could have been entered into legally in at least one state. The rule was enacted in response to the Supreme Court’s Windsor decision, which held that the definition of marriage

DOL’s Expansion of the Definition of Investment Advice (or “Fiduciary”)

Who's Holding Your Piggy Bank?Acting on reaction to a proposed and subsequently withdrawn regulation from October 2010 and attempting to address concerns expressed by both interested parties to the initial proposed regulation and an economic analysis by the Council of Economic Advisors (that the Investment Company Institute considers flawed), the Department of Labor has issued a new proposed regulation expanding the definition of investment advice. The DOL’s stated purpose in doing so is to protect retirement plan and IRA investors from practices engaged in by some advisors whose interest in providing investment advice is conflicted and not in the best interest of the participant or IRA owner.

The proposed rule does not expand the definition of fiduciary per se, but instead it expands the areas of advice that are rendered by

EEOC Finally Lets the Wellness Cat Out of the Bag

WellnessOn April 16, the Equal Employment Opportunity Commission (the “EEOC”) finally gave a peek into its thinking about what constitutes a “voluntary” wellness program under the Americans with Disabilities Act (the “ADA”). Recall that, while there are extensive wellness rules under HIPAA and ACA for these types of programs, there was always a gray area with regard to whether these programs were considered “voluntary” for ADA purposes. The EEOC recently started suing companies over their programs and was heavily criticized for doing so without issuing any guidance (aside from a couple of non-binding opinion letters). These proposed regulations are the beginnings of the guidance the critics have requested. While not binding, they are a good starting point for understanding where the EEOC may end up.

Under the proposed rules,

IRS issues updates to the Retirement Plan Correction Program

IRS issues updates to the Retirement Plan Correction Program

April 15, 2015

Authored by: benefitsbclp

In response to comments from the employee benefits community, the IRS has issued two updates in quick succession for the Employee Plans Compliance Resolution System (EPCRS). The new procedures – Rev. Proc. 2015-27 and Rev. Proc. 2015-28 – do not replace, but provide modifications and clarifications to Rev. Proc. 2013-12.

Rev. Proc. 2015-27

Issued on March 27, 2015, Rev. Proc. 2015-27 clarifies the methods that may be used to correct overpayment failures and makes changes to various provisions of Rev. Proc. 2013-12. For overpayment failure corrections, plan sponsors are no longer required to only recoup large overpayments from plan participants and beneficiaries, but may explore alternative methods of correction. A brief summary of the Rev. Proc. 2015-27 modifications is available here. The modifications are effective July 1, 2015, but plan sponsors may apply these provisions beginning on March 27, 2015.

The IRS

Discretionary Clawback Policies: Risk of Variable Stock Plan Accounting

ChartCompanies should be aware that at least some major accounting firms are questioning whether discretionary aspects of clawback policies trigger variable accounting for compensatory equity awards granted by those companies. Existing accounting guidance (ASC 718-10-30-24) would seem to suggest that clawback features should not disrupt fixed accounting treatment because of their contingent nature.

Now, however, PricewaterhouseCoopers and KPGM, at least, are publicly expressing concerns about clawback policies focusing on their discretionary, rather than contingent, nature. A 2013 PricewaterhouseCoopers survey of 100 companies indicated that nearly 80% of those companies had clawback policies that had problematic discretionary provisions. A clawback policy could involve discretion as to what circumstances it may apply; whether it should be applied; and, if applied, how severely it should be applied. It seems that all aspects of discretion may be problematic. Companies

How to Avoid the “Kitchen Sink” Appeal and Other Nuances for A Self-Insured Health Plan

For many years, medical plan drafting was viewed as a commodity. Insurance companies, third-party administrators and brokers often prepared summary plan descriptions and plan documents for self-insured medical plans using form documents. With the passage of the Affordable Care Act and other health-care related laws, however, medical claims, appeals and litigation have increased exponentially. In many instances, the terms of the plan documents have been outcome-determinative with respect to these disputes. There never has been a better time for an employer to step back and take a comprehensive review of the terms of the employer’s self-insured medical plan document and summary plan description, not only for compliance reasons but also to put the employer in the best position in the event of any dispute. The following are three drafting tips which might be considered during such a review.

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FMLA Rules for Couples: Can My Employee Take FMLA Leave Even Though She/He Has A Stay-At-Home Spouse?

BabyPreviously in this series of blog posts relating to the federal Family and Medical Leave Act (“FMLA”), we discussed which couples do not have FMLA rights under the definition of “spouse,” as well as the limitations that can be placed on couples’ leave rights when both spouses work for the same employer.

To wrap up this series, we ask a “couples” question that you may have been thinking but were afraid to ask: Do I have to let my employee take leave to care for a covered family member (such as a child or parent), when the employee has a stay-at-home spouse who may be available to provide the necessary care?

The bottom line: Yes.

The FMLA provides a right to eligible employees to take leave for qualifying reasons.

De-Risking? The PBGC Wants to Know About It

De-Risking? The PBGC Wants to Know About It

April 1, 2015

Authored by: Denise Erwin

Risk BoggleIn the past few years, several large pension plan sponsors have sought to decrease the risk associated with their pension plans by purchasing group annuities to cover future payments or by offering a lump sum window during which eligible participants were permitted to elect a cash lump sum buyout. Many other plan sponsors are considering following suit. This trend has been accelerating in response to higher PBGC premiums, lower interests rates and updated mortality tables reflecting increased longevity.

The PBGC has an interest in tracking this activity because the decrease in the number of participants reduces the per-participant premiums collected by the PBGC making it more difficult for it to fulfill its role in protecting pension benefits. As a result, beginning with the PBGC premium filings for 2015,

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