As outlined in previous Duane Morris Alerts, the coronavirus, or COVID-19, presents a potentially serious risk to the safety and welfare of employees and the financial health of companies. With employers facing the prospect of government-mandated business closures and employees who need time off to care for children unexpectedly home for multiple weeks due to school closures, COVID-19 presents numerous employee benefit-related questions and challenges. This Alert will provide employers with a roadmap for addressing COVID-19 concerns that affect health insurance plans (including potential HIPAA privacy obligations thereunder), welfare benefit plans and retirement plans.
Federal Judge: ACA Unconstitutional After Individual Mandate Was Struck Down in the Tax Cuts and Jobs Act
On December 14, 2018, in Texas v. United States, a federal judge in the Northern District of Texas ruled the entirety of the Patient Protection and Affordable Care Act (ACA) to be unconstitutional due to the elimination of the individual mandate in last year’s Tax Cuts and Jobs Act (Tax Act). The court ruled that the individual mandate was such an essential provision of the ACA that rewriting the ACA without it is beyond the power of a federal court and that the individual mandate is inseverable from the ACA’s remaining provisions.
The court’s decision sent shockwaves through the legal community and news outlets—particularly as the ACA’s annual enrollment period for 2019 was set to end on December 15, 2018. However, while the decision of the court should not be understated, it will be appealed to the U.S. Court of Appeals for the Fifth Circuit (and almost certainly after that to the U.S. Supreme Court) and the ACA remains in place during the appeals process.
New Disability Claims Procedure Regulations Take Effect on April 1, 2018
The U.S. Department of Labor has issued final regulations for the processing of disability claims under certain benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). The rules are effective for disability determinations filed on or after April 1, 2018.
Affected plans include disability benefit plans subject to ERISA and other ERISA plans that condition the payment of a benefit based upon a disability determination. This latter group of plans may include qualified retirement plans (such as defined benefit plans, 401(k) plans, profit sharing plans and 403(b) plans), as well as severance pay plans, nonqualified deferred compensation plans and supplemental retirement plans. Some programs that provide benefit payments upon a finding of disability may, however, be classified as payroll practices that are not subject to ERISA, and therefore not covered by these new rules.
U.S. Department of Labor Finalizes Regulations Authorizing States to Establish Retirement Savings Programs
Blog post by Lawrence I. Davidson
On August 25, 2016, the U.S. Department of Labor (DOL) released its Final Rule that will facilitate state legislatures in establishing employee retirement savings programs that are ERISA compliant. Currently, roughly one-third of all workers do not have an opportunity to save for retirement through retirement savings accounts offered by their employers. To date, eight states, including Illinois and California, have already passed legislation which creates retirement savings account programs for employees. While the specific rules of these employee retirement savings programs vary for each state, all of them have the purpose of encouraging residents of their State to save for retirement. Often this is accomplished through a state “auto-IRA” law which requires employers that do not offer workplace retirement savings programs to automatically enroll their employees in payroll deduction IRAs administered by the state. Continue reading “U.S. Department of Labor Finalizes Regulations Authorizing States to Establish Retirement Savings Programs”