Benefits Bryan Cave

Benefits BCLP

Other Posts

Main Content

After Obergefell, Is it “Get Married Or Else”?

After Obergefell, Is it “Get Married Or Else”?

July 1, 2015

Authored by: Chris Rylands and Denise Erwin

Gavel and RingsAs has now been widely reported, the Supreme Court ruled on June 26 (the second anniversary of the Windsor decision) that same-sex couples have a right to marry in any part of the United States. Despite being hailed as a victory for marriage equality, as this New York Times article points out, it may not be such happy news for currently unwed domestic partners. Specifically, there is a concern, as the article points out, that employers who previously extended coverage to domestic partners out of a sense of equity may now decide not to since both opposite-sex and same-sex couples can now marry.

As the article mentions, there was a concern at one time that domestic partnership rules would be used by some employees to cover individuals with whom they

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,

Second Circuit Affirms that Health Plan’s Same-Sex Spouse Exclusion Does not Violate ERISA

On December 23, 2014, the U.S. Court of Appeals for the Second Circuit upheld the District Court’s dismissal of plaintiffs’ claims alleging that the same-sex spouse exclusion in the employer’s self-insured medical plan violated Section 510 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and also dismissed plaintiffs’ breach of fiduciary duty claim under Section 404 of ERISA.

As you may recall, the underlying case, Roe v Empire Blue Cross Blue Shield, decided by the District Court of the Southern District of New York, involved an employee of St. Joseph’s Medical Center who tried to add her same-sex spouse as a covered dependent under the employer’s self-insured health plan administered by Empire Blue Cross Blue Shield. The plan at issue did not define “spouse” but it did expressly exclude same-sex spouses and domestic partners. The District Court granted defendants’ motion to dismiss the ERISA

IRS and DOL Encourage DC Plan Participants to Hedge Bets Against Outliving Retirement Savings

On October 24th, the Internal Revenue Service (“IRS”) and the Department of Labor (“DOL”) offered guidance on the use of a series of target date funds (“TDFs”) in defined contribution plans that would include investment in deferred annuities in the TDFs for older participants. As baby boomers get older and life expectancies continue to increase, this arrangement has been touted as a way for defined contribution plan participants to invest a portion of their accounts in lifetime income in order to protect themselves from outliving their retirement savings. Many plan sponsors and advisors have hesitated to jump on this band wagon preferring to await guidance on a number of issues that arise from the arrangement.

CalculatorIn Notice 2014-66, the IRS offers some clarity regarding nondiscrimination issues. Guidance

HHS Guidance Recognizes HIPAA Privacy Rights of Same-Sex Spouses and Dependents

On September 17th, the Department of Health and Human Services Office for Civil Rights (“HHS”) issued guidance to assist covered entities and business associates in complying with the privacy requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) following the decision issued by the Supreme Court in United States v. Windsor.  The guidance clarifies that same-sex spouses, determined under the “state of celebration rule,” must be afforded the same privacy rights as opposite-sex spouses.

The guidance from HHS clarifies that for purposes of the HIPAA privacy rules, the term “spouse” includes individuals who are in a legally valid same-sex marriage sanctioned by a state, territory or foreign jurisdiction (as long as a U.S. jurisdiction would also recognize the marriage) whether or not they live or receive services in a jurisdiction that recognizes their marriage.  Similarly, the guidance provides that the term “marriage” includes

Proposed Rule Re-defining ERISA “Fiduciary” Delayed (Still)

Regulations and RulesBroker-dealers and financial advisers may have gained some breathing room as a congressional battle to broaden ERISA’s definition of “fiduciary” loses steam.  In the following discussion, we will summarize the current state of that battle.

At issue is the innocuous-sounding “Conflict of Interest Rule” proposed by the Employee Benefit Security Administration (“EBSA”), that has nonetheless sparked searing critiques from the investment advice industry, which contends it could dramatically increase costs and reduce access to quality investment advice for millions of American workers.  The re-proposal of the controversial rule has been delayed again, this time until January 2015, well after the mid-term elections in November.  Assuming a six-month comment period and six months of hearings to develop final regulations, the final rule could be up for

SCOTUS Speaks in Quality Stores: Severance Payments are Subject to FICA Taxes

On March 25, 2014, the United States Supreme Court issued its unanimous (8-0) decision in U.S.  v Quality Stores, 572 U.S. ____ (2014).  In its opinion authored by Justice Kennedy, the Court held that the severance payments at issue constituted taxable wages for FICA purposes.  The severance payments in question were made to employees in connection with an involuntary termination, were varied based on job seniority and time served, and were not linked to the receipt of state unemployment benefits.  In so holding, the Supreme Court reversed the decision of the Sixth Circuit Court of Appeals and resolved a split in the courts.  See CSX Corp. v. United States, 518 F. 3d 1328 (Fed. Cir.  2008).

The Court reasoned that severance payments of the type described fit plainly within the definition of “wages” under Section 3121 of the Internal Revenue Code, which defines “wages” for FICA tax

Ways and Means Releases Two Bills that Would Limit the Reach of the Employer Mandate

On February 4, 2014, the Committee on Ways and Means sent two bills to the House that, if enacted, would affect the requirement that employers share responsibility for health coverage costs by narrowing the definition of “full-time employee” for purposes of the employer mandate provisions of the Affordable Care Act (“ACA”).

The ACA includes employer shared responsibility provisions that are applicable to employers with 50 or more full-time employees.  According to these “employer mandate” or “play or pay” provisions of the ACA, such employers must either provide adequate health insurance coverage for their full-time employees or pay a penalty.  Currently, the ACA generally provides that a full-time employee is one who performs at least 30 hours of service per week in any given month.

The first bill (H.R. 2575, Save American Workers Act of 2014) working its way through Congress was drafted in response to concerns

The Final “Play or Pay” Regulations Have Arrived!

The Final “Play or Pay” Regulations Have Arrived!

February 18, 2014

Authored by: Denise Erwin and Lisa Van Fleet

The long awaited final regulations regarding the employer shared responsibility provisions of the Affordable Care Act were released on February 10, 2014.  They offer new transition relief and provide much needed guidance in several areas including how to determine which employees are “full-time” for purposes of the mandate.  Although the 59 pages of regulations will surely provide ample fodder for numerous future posts, we’ll start with a rundown of some of the most notable provisions:

New Transition Relief

Employers with 50-99 full time employees have an additional year to comply

    The new compliance date for these employers is January 1, 2016 (or the first day of new plan year beginning in 2016 for non-calendar year plans).  In order to avail themselves of the transition relief, these employers must certify  that they satisfy the following eligibility conditions:

Don’t Miss the April 15th Deadline to File a Protective Refund Claim for 2010 FICA Tax!

As you may recall from our earlier post, the 6th Circuit held in U.S. v. Quality Stores, that severance payments made to employees in connection with an involuntary reduction in force were not “wages” subject to FICA taxes. This decision was contrary to published IRS guidance and created a split in the courts. In October of last year, the United States Supreme Court agreed to review the case and on January 14th, it heard oral arguments. The Supreme Court is expected to issue a ruling by the end of June.

Taxpayers may be entitled to a FICA tax refund if the decision is upheld by the Supreme Court on appeal. In order to preserve the right to a refund, taxpayers must file a protective claim before the applicable statute of limitations runs. As we previously reported in a post last year, the deadline to

The attorneys of Bryan Cave Leighton Paisner make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.