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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. 

Thursday
Aug072014

Deadline Approaches for Business Associate Agreement Compliance Updates

Employer group health plans and other covered entities that have not already amended business associate agreements (BAAs) to incorporate changes required by the Final Omnibus Rule must do so by September 22, 2014.  (You can read our prior blog post on the Final HIPAA Omnibus Rule here.)

In January 2013 the Department of Health and Human Services published the Final HIPAA Omnibus Rule.  Among other things, the Final Omnibus Rule expanded the scope of entities considered “business associates,” extended direct liability to business associates who fail to comply with certain HIPAA requirements, and required the addition of certain language to new and existing BAAs.  Specifically, the Final Omnibus Rule required that existing BAAs be amended and new BAAs be drafted to include (among other things) provisions requiring a business associate to: 

  • Comply with applicable provisions of the HIPAA security rule;
  • Ensure that any subcontractor creating, receiving, maintaining, or transmitting protected health information (PHI) on behalf of the business associate agrees in writing to the same restrictions and conditions that apply to the business associate with respect to such information;
  • Report to the covered entity breaches of unsecured PHI as required by the breach notification rules; and
  • To the extent the business associate carries out a covered entity’s obligations under the privacy rule, comply with the requirements of the privacy rule that apply to the covered entity in the performance of such obligations.

New and existing BAAs were required to comply with the Final Omnibus Rule by September 23, 2013, though parties with a BAA in place prior to January 25, 2013 were given the opportunity to delay amending the BAA for an additional year.  Specifically, if, prior to January 25, 2013 (the publication date of the Final Omnibus Rule), the covered entity and the business associate were parties to a BAA that complied with the prior provisions of the HIPAA rules and the BAA was not renewed or modified after March 25, 2013, the parties could delay amendment of the BAA until September 22, 2014. 

Employers who sponsor self-funded group health plans should review their existing BAAs to ensure that they comply with the Final Omnibus Rule.  (HHS has provided sample language.)  One final thought.  Since the Final Omnibus Rule makes clear that covered entities may be liable for the acts of their business associates functioning in an agent capacity, employers should consider adding language to their BAAs to affirmatively disavow any agency relationship with a business associate in appropriate cases.  This type of protective provision does not appear in the model language published by HHS, but competent legal counsel certainly can provide it.

Wednesday
Jul162014

2014 Mid-Year Supreme Court Case Review

The 2013-2014 term of the Supreme Court of the United States produced opinions that will have substantial effects on the design and administration of most employee benefits plans. This summary highlights three key decisions, one significant procedural ruling, and an emerging issue likely headed for Supreme Court review, all of which deserve the attention of employee benefits professionals.

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Wednesday
Jul162014

2014 Mid-Year Compliance Update

While 2014 has been a relatively quiet year in terms of new rules affecting retirement plans, the January 1, 2015 effective date for the Affordable Care Act employer shared responsibility mandate is now in sight. This summary discusses a few key developments regarding employee benefit plans – especially group health plans – for employers to consider as they move into the second half of 2014.

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Tuesday
Jun032014

Fiduciary Committee Best Practices – Part 2: Preparing Meeting Minutes

In Part 1 of this two-part series we suggested that the key to compliance with the fiduciary requirements of ERISA can be boiled down to a simple proposition: follow a prudent process and document it.  We used that proposition as a basis for offering five foundational steps that a fiduciary committee charged with overseeing the administration of an ERISA retirement plan should take, especially when the committee has responsibility for the investment of plan assets.  One of those foundational steps involves the preparation of minutes of committee meetings.  In this second part of the series we focus entirely on the preparation of meeting minutes.  The goal is make sure your fiduciary committee gets the most mileage out of meeting minutes from a compliance standpoint and avoids stubbing its toe in the event that the minutes find their way into the hands of someone seeking to hang the committee by its own documentation.

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Wednesday
May142014

Fiduciary Committee Best Practices – Part I: The Basics

Even in areas of law where the landscape of rules, regulations, and risks seems constantly to be changing, certain core concepts and basic principles hold fast.  In the case of fiduciary responsibility under ERISA, the core concepts and basic principles can be boiled down to three key elements: (1) establish a prudent process; (2) adhere to the process; and (3) document the process.  These principles apply no matter what kind of benefit plan is involved (if it is governed by ERISA) and no matter what role the fiduciary plays in the operation of the plan.  And courts have affirmed the strength and validity of these principles time and time again even when the decisions made by fiduciaries look really bad in hindsight.  In this first part of a two-part series we will highlight five best practices that we recommend to any employer who maintains a retirement plan is subject to ERISA.  These practices apply to both defined contribution plans where participants typically control the investment of their individual accounts (such as 401(k) plans and 403(b) plans that include employer contributions) and defined benefit pensions plans (where the investment risk is essentially on the employer).  The key fiduciary responsibility requirements of ERISA do not vary based on the size or sophistication of the employer. Therefore, while the implementation of these best practices may vary to some extent based on the size and sophistication of the employer, the efficacy of the practices will not. 

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