Understanding Employee Benefits and key developments in the employee benefits field and items of interest to our clients. MORE

Benefits Notes

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The Department of Health and Human Services released final Health Insurance Portability and Accountability Act (HIPAA) privacy and security regulations on January 25, 2013. These regulations impact covered entities, including group health plans, most health care flexible spending accounts, and their business associates. The new rules were effective March 26, 2013, but covered entities and …

Employers who sponsor health plans for their employees can purchase insurance contracts to fund those plans. Alternatively, employers can self-fund or self-insure those benefits, agreeing to pay the claims themselves. Many employers who provide self-funded plans also buy stop-loss insurance to cover the risk of exceptionally large claims. However, employers must be careful that their …

A taxpayer we will call John worked for a savings bank in New York that was acquired by Washington Mutual Bank. John participated in the New York bank’s supplemental executive retirement plan (SERP) and its deferred compensation plan, both of which were nonqualified deferred compensation plans. When Washington Mutual Bank acquired the New York bank, …

Employers know that benefits under a retirement plan can be split between a participant and a former spouse in the event of a divorce under the terms of a qualified domestic relations order (QDRO). A domestic relations order is qualified if it meets certain technical requirements. A recent decision from the Minnesota Supreme Court highlights …

ERISA requires that plans contain a reasonable claims procedure. Courts have generally required claimants to exhaust that claims procedure before filing a lawsuit. In addition, if the plan gives the plan administrator discretion to interpret the plan and decide claims, a court will often give deference to the plan administrator’s decision. These rules should encourage …

My colleague Jeff Cairns blogged about a recent court case confirming the IRS’s position that discounted stock options can be considered noncompliant nonqualified deferred compensation arrangements under Section 409A of the Internal Revenue Code. Unless structured to be exercised only on a fixed date or an allowable 409A event, discounted stock options will result in …

The Department of Labor has published two checklists that plan sponsors can use to test their compliance with group health plan requirements. One checklist addresses the Affordable Care Act (ACA or health care reform) provisions, including a plan’s status as a “grandfathered” plan exempt from some ACA requirements, and such ACA requirements as limitations on …

Many plan sponsors have selected so-called “target date” funds as the default investment under the plan sponsor’s 401(k) or other qualified plan. A target date fund is one that includes investments in different asset classes (e.g., stocks, bonds, money market) where the balance among the asset classes becomes more conservative as the participant gets older. …