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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice.  U.S. Treasury Regulations require us to notify you that any tax-related material in this blog (including links and attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties, and may not be referred to in any marketing or promotional materials.  While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you. 

Wednesday
Jul132016

Proposed Regulations Create (Some) Executive Compensation Design Opportunities for Tax-Exempt Employers

It has been a long time coming (nine years to be exact), but the Treasury Department has at last published proposed regulations that harmonize important concepts governing deferred compensation arrangements under Code Section 409A and Code Section 457.  The proposed regulations contain no major surprises that would shake up the world of deferred compensation for tax-exempt employers.  But the proposed regulations do provide important new rules under Code Section 457 that:  (1) explain the meaning of “substantial risk of forfeiture”; (2) develop existing regulations regarding plans that are not subject to Code Section 457; and (3) help calculate amounts to be included in income under the Code Section 457 tax regime.  The new proposed regulations provide greater clarity regarding these important concepts and can be said to offer new opportunities to tax-exempt employers in designing certain types of executive compensation arrangements (or perhaps, more accurately, resurrect design elements that have fallen into disuse).    

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Wednesday
May252016

EEOC Doubles Down: Final Wellness Program Rules Under ADA and GINA – Part II

Last week the Equal Employment Opportunity Commission (EEOC) issued final rules for wellness programs under both the Americans with Disabilities Act (ADA) (the “Final ADA Rule”) and the Genetic Information and Nondiscrimination Act (GINA) (the “Final GINA Rule”). 

Part I of this two-part series addressed the Final ADA Rule.  In Part II, we discuss the Final GINA Rule.  Like the Final ADA Rule, the Final GINA Rule is generally consistent with the proposed rule published by the EEOC in October 2015.  The Final GINA Rule simply clarifies the type of information regulated by the rule and the level of financial incentives that may be offered by an employer in exchange for certain health information about an employee’s spouse and children. 

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Friday
May202016

EEOC Doubles Down: Final Wellness Program Rules Under ADA and GINA – Part I

The Equal Employment Opportunity Commission (EEOC) has issued final rules for wellness programs under both the Americans with Disabilities Act (ADA) (the “Final ADA Rule”) and the Genetic Information and Nondiscrimination Act (GINA) (the “Final GINA Rule”).  The release is accompanied by Frequently Asked Questions posted to the EEOC website, as well as interpretive guidance discussing the Final ADA Rule.  Employers must comply with both sets of rules as of the first group health plan year that begins on or after January 1, 2017.  Despite a torrent of highly critical comments submitted during the comment period and ongoing litigation surrounding the EEOC’s interpretation of the limits imposed on wellness programs by the ADA and GINA, the final rules differ very little from the proposed rules and continue to depart in significant ways from the final regulations issued by the Department of Labor, Department of the Treasury, and the Department of Health and Human Service under the Health Insurance Portability and Accountability Act (HIPAA) (the “Final HIPAA Regulations”).  In this two part series, we discuss the differences between the proposed and final versions of each rule and highlight changes that may be required to existing wellness programs.  Part I concerns the Final ADA Rule.

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Monday
Apr042016

Including Limitations Periods in Denial Letters: From “Best Practice” to Necessity 

Sponsors of group health plans in the First Circuit must now describe any contractual limitations period, if the plan applies one, in the letter advising a participant of a final adverse benefit determination.  In light of the decision of the U.S. Court of Appeals for the First Circuit in Santana-Diaz v. Metro. Life Ins. Co., No. 15-1273, 2016 WL 963830 (March 14, 2016), the failure to include such a description would preclude the application of a contractual limitations period.  ERISA does not prescribe a statute of limitations for initiating a civil action.  However, as discussed in our 2015 Mid-Year Client Advisory, a plan sponsor may limit the amount of time a participant has to initiate a lawsuit under ERISA by adding a contractual limitations period to its plan.  The limitations period should be included in the plan document and the SPD and, until recently, it was a “best practice” to make the limitations period known in adverse benefit determination letters.  Following Santana-Diaz, however, including a description of the applicable limitations period in the final benefit determination is now a necessity for plan sponsors in the First Circuit.

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Wednesday
Mar092016

Avoiding a Patchwork of Pitfalls: Gobeille v. Liberty Mutual Insurance Co.

In the first decision issued since the passing of Justice Scalia, the Supreme Court of the United States held that ERISA preempts a Vermont statute requiring third party administrators of self-insured group health plans to report claims information to state health care databases.  Gobeille v. Liberty Mut. Ins. Co. addresses two important issues for benefit plans: (1) the scope of ERISA preemption; and (2) mandated reporting to state maintained “all-payer claims databases” (APCDs), which an increasing number of states are attempting to create in an effort to assess the cost, quality, and utilization of health services.  Employers should benefit from the broad ERISA preemption standard re-affirmed in the majority opinion authored by Justice Kennedy.  Plan sponsors, insurance carriers, and third party administrators should also take comfort in avoiding a patchwork of state APCD reporting requirements that may create foot faults for these entities.

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