Welfare Benefit Plan ERISA News
February 2015

 
ERISA Settlements Top $1 Billion
"The largest class-action settlements in claims brought under the Employee Income Retirement Security Act topped $1.3 billion in 2014, almost 10 times the sum of the biggest settlements from the previous year. No other area of employment workplace law saw that kind of explosive growth last year." Read full article by Nick Thornton.
DOL Increasing Health & Welfare Plan Audits
"'I still talk to DOL investigators on a pretty regular basis, and they tell me they're really focused on health and welfare plans right now...,' [says David Donaldson, a former senior investigator with the EBSA (2009-2011), currently serving as president of the employee benefit consulting firm ERISA SMART]. 'During my last quarterly training session while I was still an investigator for the DOL, they were already instructing that for every 401(k) or retirement plan we had in our case file, we were to go ahead and open up a case for the health and welfare plan if one happened to exist. We can see now that the focus on health and welfare is intensifying.'
Donaldson says this trend goes back to provisions of the Patient Protection and Affordable Care Act (or ACA) granting EBSA the ability to bill and get reimbursed by the Department of Health and Human Services (HHS) for auditing work related to health and welfare plans.
'EBSA's motivation also makes sense when you consider there are about 707,000 pension plans in the U.S., compared with about 2.5 million health and welfare plans,' Donaldson adds.
But in the past few years there has been an interest by the Government Accountability Office (GAO) and others inside and outside the Department of Labor to try and make EBSA do more random audits--in the interest, they say, of being more transparent and fair." John Manganaro, Plan Advisor. Read more.
New Insurance Covers DOL Investigations
"Traditionally, fiduciary [liability] insurers have recognized a DOL investigation as a covered claim only after the DOL has sent a letter identifying alleged breaches of fiduciary duty at the end of its investigation. Under this structure, there is no coverage for defense costs during the investigation period. Pre-claim investigation coverage changes that. As soon as the first notice of an investigation is received from the DOL, filed with the insurer and accepted as a claim, the insurer is obligated to start paying defense costs." (Segal Consulting)
House Passes 40-Hour Workweek Bill
The House of Representatives recently approved the Save American Workers Act of 2015 (H.R. 30), a bill that would increase from 30 to 40 the number of hours an employee must work per week to be considered "full-time" under the Affordable Care Act (ACA). The number of employees that are considered full-time under the ACA is important for determining whether the employer meets the 50-employee threshold that would trigger the law's pay-or-play shared responsibility mandate. Critics of the ACA's 30-hour-per-week definition have claimed it will encourage employers to reduce employee hours and/or hiring in order to remain below the pay-or-play mandate floor. Critics of the Save American Workers Act contend that more workers will lose jobs and benefits by being cut from 40 to 39 or fewer hours than by being cut from 30 to 29 or fewer hours. While changing the definition has received some bipartisan support, the bill still must clear a Senate hurdle and survive the President's threatened veto. More Information
Health FSA--HRA--HSA Comparison Chart
"This chart provides a general overview of the structure and operation of health flexible spending arrangements, health reimbursement arrangements, and health savings accounts, respectively. The chart highlights both the similarities as well as the key differences among these arrangements." (Buck Consultants at Xerox)
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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.

 

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