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2012 PPACA Checklist

2012 PPACA Checklist

September 12, 2011

Authored by: Serena Yee

While most of the design changes required for group health plans under the Patient Protection and Affordable Care Act, as amended (“PPACA”), became effective in 2010 or 2011, some additional requirements must be implemented for 2012.

All group health plans subject to PPACA must comply with the following requirements, regardless of its status as a “grandfathered health plan”:

  • Provision of a Summary of Benefits.  The summary must include the information specified in the regulations but cannot exceed four double-sided pages. A summary must be provided to participants and beneficiaries as part of any written enrollment materials and a summary must be included for each benefit package offered for which the participant or beneficiary is eligible. However, upon renewal, only the summary for the benefit package in which the participant is enrolled needs to be furnished, unless the participant or beneficiary requests a summary for another benefit package. Unless an

New York Marriage Equality and Benefits – Part 2

New York Marriage Equality and Benefits – Part 2

September 8, 2011

Authored by: benefitsbclp

Last week we looked at the implications of New York’s Marriage Equality Act (“Act”) upon the tax treatment of employer-provided health care benefits for same-sex married couples in New York. Today we’ll consider how the Act affects the administration of family and medical leave, HIPAA special enrollment rights and health care continuation coverage under COBRA and New York’s “mini-COBRA” law.

Limiting Benefits for Drunk Drivers

September 8, 2011

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Limiting Benefits for Drunk Drivers

September 8, 2011

Authored by: benefitsbclp

Should employers include a “drunk driving” benefit exclusion in their death and disability policies? Two recent court cases illustrate that these provisions may determine whether or not an employee is entitled to benefits for injuries that occur while intoxicated.

In Allen v. Standard Insurance Co., an employee was found to be intoxicated when she drove to work, crossed the centerline into oncoming traffic, hit a truck head-on and suffered severe head injuries. Because the long-term disability policy provided by her employer limited benefits for disabilities related to substance abuse, the district court ruled that the employer properly limited her benefits because her disability was caused by a drunk driving accident.

In Thies v. Life Insurance Co. of North America, an employee was found to be intoxicated when he crashed a jet ski and died. His employer-provided life insurance policy did not include a drunk driving benefit exclusion. The district court

Ninth Circuit Ruling: Insurer “logical defendant” in lawsuit to recover ERISA plan benefits

September 6, 2011

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On June 22, 2011, an en banc panel of the Ninth Circuit Court of Appeals issued its much anticipated decision in Cyr v. Reliance Standard Ins. Co., 642 F.3d 1202 (9th Cir. 2011) (en banc). Considering the issue of whether ERISA section 1132(a)(1)(B) authorizes actions to recover plan benefits against an insurer, the Court overruled prior decisions and held that a claimant may sue an insurer directly for unpaid benefits, even if that insurer is not the plan administrator.

 In that case, Plaintiff Laura A. Cyr (“Cyr”) collected long-term disability benefits based on her compensation. While on long-term disability, Cyr sued her former employer for pay discrimination because of her sex. Cyr and the former employer settled that claim and the former employer retroactively adjusted Cyr’s salary. Cyr then approached the long-term disability insurer, Defendant Reliance Standard Life Insurance Company (“Reliance”) about adjusting her disability payments

Does an ERISA Plan Exist?

Does an ERISA Plan Exist?

September 5, 2011

Authored by: Travis Kearbey

This mixed question of fact and law has perplexed courts perhaps as much as it has confused benefits managers in corporations across the nation.  However, for employers operating within the jurisdiction of the Eighth Circuit Court of Appeals (AR, IA, MO, MN, NE, ND, and SD) this question has recently become easier to answer with respect to single-employee agreements.  In August, the Eighth Circuit parted with federal courts in the Fourth, Seventh, and Eleventh Circuits by holding in Dakota, Minnesota & Eastern Railroad Corp. v. Schieffer that a contract governing severance benefits for a single employee does not constitute an ERISA plan.  

Seventh Circuit Reverses Kraft SJ in 401(k) Fee Case

Seventh Circuit Reverses Kraft SJ in 401(k) Fee Case

September 1, 2011

Authored by: benefitsbclp

Earlier this year, a split Seventh Circuit panel reversed, in part, summary judgment previously granted in favor of Kraft Foods Global, Inc. (“Kraft”) in a class action ERISA breach of fiduciary duty case involving “excessive fees” claims in connection with Kraft’s 401(k) plan. The majority opinion was authored by Judge Adelman, an Eastern District of Wisconsin judge sitting by designation in the Seventh Circuit, and was joined by Judge Rovner.

This entry provides a high-level summary of the issues reversed by the court:

  • The Company Stock Fund Issue:  In 2003, Kraft’s then-parent company, Altria Group, Inc. (formerly Philip Morris), made the decision to move the company stock fund in its 401(k) plan from the unitized stock fund (which generally employs a cash buffer) model to “real time” trading where each participant owned shares of the relevant stock rather than units of a fund that invested in the

New York Marriage Equality and Benefits

New York Marriage Equality and Benefits

September 1, 2011

Authored by: benefitsbclp

Now that same-sex marriage is recognized in New York, what steps do employers need to take with respect to employee benefits? The to-do list must consider the federal Income Tax Code, ERISA, insurance law and of course New York’s Marriage Equality Act (“Act”), which took effect July 24, 2011. This is the first in a series of posts that will discuss this topic.

The Act recognizes all legally performed marriages between same- and opposite-sex couples, whether the marriage took place in New York or elsewhere. This means that same-sex marriages, even those entered into under the laws of another state, must be treated equally under the laws of New York.

COBRA and STD/FMLA

COBRA and STD/FMLA

September 1, 2011

Authored by: benefitsbclp

In Clarcor, Inc. v. Madison Nat’l Life Ins Co. (M.D. Tenn. 2011), the District court for the Middle District of Tennessee upheld a denial of stop-loss coverage by Madison National Life for expenses incurred by an employee who was put on short term disability following FMLA leave.  The employee went on FMLA leave and when that leave expired, she did not return to employment.  Instead, the employer put her on short-term disability. Following the expiration of short-term disability, her employment was terminated and she was offered COBRA.

However, under the eligibility provisions of the self-funded health plan, she was required to be either actively working, on FMLA or on COBRA.  Because she was not in any of those classes, she was ineligible. The employer had a policy providing for continued coverage while employees were on short-term disability, but the policy was not part of the formal plan document.  Therefore, the

Georgia Restrictive Covenant Act

August 31, 2011

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Georgia Restrictive Covenant Act

August 31, 2011

Authored by: benefitsbclp

On May 11, 2011, Georgia Governor Nathan Deal signed House Bill 30 into law, beginning a new era for non-compete, non-disclosure, and non-solicitation agreements under Georgia.  Georgia historically has been an inhospitable forum for employers seeking to enforce restrictive covenants against former employees.  Georgia’s new Restrictive Covenant Act (the “Act”) clarifies and strengthens the ability of employers to restrict conduct during and after employment.

Importantly, the Act applies only to Georgia restrictive covenant agreements entered into on or after May 11, 2011.  Employers with operations in Georgia should revisit their restrictive covenant agreements and consider revising their agreements to take advantage of protections of the new law.  Historically, Georgia law has not required new or additional consideration to support a new restrictive covenant agreement signed by a current employee, so employers are in a good position to strengthen their competitive protections, at this time, should they choose to do so.

Individual PTEs Dodd-Frank Act

Individual PTEs Dodd-Frank Act

August 31, 2011

Authored by: benefitsbclp

Earlier this summer, the DOL issued a “FAQ on Credit Ratings and Individual Prohibited Transaction Exemptions”  concerning how Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) will impact prohibited transaction exemptions (“PTEs”) granted to individual fiduciaries or transactions under Section 408(a) of ERISA.  Section 939A of the Dodd-Frank Act generally requires federal agencies to review and modify existing regulations that refer to, or require reliance on, credit ratings within one year following the enactment of Dodd-Frank (i.e., by July 21, 2011).   Certain individual PTEs refer to or rely upon credit ratings.

In its FAQ, the DOL confirmed its position that individual PTEs do not qualify as “federal regulations”; accordingly, Section 939A of the Dodd-Frank Act does not require review and modification of previously granted exemptions. This means that individual PTEs will remain in force with no modifications despite the Section 939A July deadline.

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