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Keeping Your (Top) Hat On

Keeping Your (Top) Hat On

April 27, 2016

Authored by: benefitsbclp

Top Hat“Top hat” plans are plans employers maintain for a “select group of management or highly compensated employees.” These plans are exempt from many of ERISA’s protections, including eligibility, vesting, fiduciary responsibility and funding. Thus, they are often used to provide benefits to management employees over and above those provided under the company’s broad-based retirement plans.

Choosing which employees may participate in a “top hat” plan is an important decision, as selecting employees who are ineligible for this type of arrangement may lead to violations of ERISA, penalties, increased taxes, and other liabilities. For years companies, courts, and even the Department of Labor (DOL) have struggled with defining the group of employees who can participate in a “top hat” plan. Two recent federal court cases provide insight into the current state

New ACA, et. al. FAQs Cover Items From “Top” to “Bottom”

Question Mark ManOn April 20, the “Big Three” agencies (DOL, Treasury/IRS, and HHS) released another set of FAQs (the 31st, for those of you counting at home). Consistent with earlier FAQs, the new FAQs cover a broad range of items under the Affordable Care Act, Mental Health Parity and Addiction Equity Act, and Women’s Health Cancer Rights Act. The authors are admittedly curious about how “Frequently” some of these questions are really asked, but we will deal with all of them in brief form below.

1. Bowel Preparation Medication – For those getting a colonoscopy, there is good news. (No, you still have to go.) But the ACA FAQs now say that medications prescribed by your doctor

Education or Advice: The DOL Final Definition of Fiduciary; Conflict of Interest Rule

Changes AheadEarlier this month, the Department of Labor finally released the long-awaited “Definition of Fiduciary; Conflict of Interest Rule.”

This blog post is intended to do two things:

  • Provide a brief history of the proposal, and
  • Provide an overview of the key points of the final rule and how it differs from the 2015 proposal.
  • For additional materials and information on the Final Rule, visit the DOL webpage. In addition, you can access all 200 plus pages of the final rule here.

    I.  The “Conflict of Interest” Rule’s History

    Since the adoption of ERISA, the governing regulations have mandated use of a five-part test that dictates whether an individual will be considered an investment advice fiduciary. In order to rise to the level of an investment

    Investment Plus Partnership-in-Fact = Withdrawal Liability

    Org ChartPreviously, we wrote about the First Circuit decision that a private equity fund constituted a “trade or business” under ERISA as amended by the Multiemployer Pension Plan Amendments Act (“MPPAA”). That dry description is actually very significant since it would mean that private equity funds and their other portfolio companies could be responsible for withdrawal liability, potentially in the millions of dollars, when a portfolio company withdraws from a multiemployer plan. Based on a recent District Court case in that same dispute, it may be even harder for private equity funds and their portfolio companies to escape liability, which could have implications for those companies and the companies that buy them.

    By way of background, multiemployer pension plans are pension plans into which (as the

    Finally: DOL Releases the Final Fiduciary Rule

    April 6, 2016

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    Earlier today, the Department of Labor (DOL) released the Conflict of Interest Final Rule.   Click here to explore all 200+ pages.  Among other things, this rule expands the definition of fiduciary, and requires that persons who give investment advice to retirement investors act in the best interests of those investors.

    The DOL released significant additional guidance in connection with the Final Rule, including the best interest and principal transaction exemptions, a chart illustrating changes from the proposed rule, and FAQs.  To access that additional guidance click here.  We will examine the Rule in further detail, as well as the industry’s reaction to it, in future posts.

    Have You Checked Your SPAM Folder Recently?

    SecurityNearly two years after the Office of Civil Rights (“OCR”) first announced its preparation for another round of HIPAA audits, Phase II of OCR’s HIPAA audit program is finally underway.

    On March 21, OCR began emailing various types of entities to verify their e-mail addresses and contact information.   OCR acknowledged that its email communication may be treated by email filters as spam, but has advised that it expects entities to check their junk or spam email folder for emails from OCR. Recipients have 14 days to verify their email address or provide OCR with updated primary and secondary contact information.

    A pre-screening questionnaire will follow seeking details regarding the entity’s size, geographic location, services and scope of operations. Covered entities will also be asked to identify their business associates. Presumably, OCR

    Tired of the Health Care Hullabaloo?

    April 1, 2016

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    Tired of the Health Care Hullabaloo?

    April 1, 2016

    Authored by: benefitsbclp

    Hullabaloo: noun: a commotion, a fuss.

    In recent years, almost every change to health care has caused a hullabaloo. Today, we thought you might enjoy reading about a few recent and proposed changes that, although important, have not caused quite the uproar to which we have become accustomed.

    The Department of Health and Human Services has finalized the annual in-network out-of-pocket maximums for non-grandfathered health plans for 2017:

    An enrollee in self-only coverage may not pay more than $6,850 for essential health benefits in 2016; for 2017, that number has increased to $7,150.

    An enrollee in any coverage other than self-only may not pay more than $13,700 for essential health benefits in 2016; for 2017, that number has increased to $14,300.

    Section 1411 of the Patient Protection and Affordable Care Act requires federally facilitated marketplaces (but not state facilitated marketplaces) to provide notice to employers when

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