Profits Interest as an Attraction and Retention Tool for Executives

Companies are always looking for creative ways to compensate their top executives.  They want to be able to attract top talent as well as retain the knowledge and experience they already have.  One tool for doing so is profits interests, which are an option for businesses taxed as pass-through entities. A profits interest is an equity right that can be granted to any individual for their service to a partnership Read More

Why an ESOP? Advantages to Employer of Deductible Cash Dividends to ESOP Participants

An Employee Stock Ownership Program or ESOP is a way for owners to share the wealth and success of a company with employees. It is often used for succession planning allowing long-term employees a way to buy out an aging owner and continue the business. ESOPs also offer some tax incentives to the company such as using deductible funds when servicing debt and creating deductible cash dividends. Tax Deductible Debt Read More

ERISA Rules Every ESOP Fiduciary Needs to Know to Avoid Breach Claims

Employee Stock Ownership Plan (ESOP) fiduciaries are governed by ERISA rules just as administrators of other qualified retirement and benefit plans are. This includes any person who has discretion or control in the management of plan assets, provides advice to the plan for a fee, or has responsibility for the administration of the plan. In some cases, these fiduciaries do not act completely independently but rather Read More

IRS Extends 2019 ACA Reporting Deadline to End of March 2020

Pursuant to the December IRS Notice 2019-63 (the “Notice”), the deadline for providing forms 1095-C and 1095-B to covered individuals has been extended from the end of January until March 2, 2020. These forms must also be filed electronically with the IRS by March 31, 2020. These forms are part of the Affordable Care Act’s (ACA) reporting requirements. Employer Shared Responsibility Under IRS Code Section Read More

Buyer Beware! First Circuit Declines to Hold Purchaser Private Equity Fund Liable for Pension Plan Liabilities but Risks Remain

As fiduciary liability cases wind their way from the initial trial to appeals, they are often subject to analysis from outside parties. Policy think tanks, large plan providers, and other entities who will be impacted by the outcome of the case like to review and sometimes even submit comments regarding the impacts of a particular decision one way or the other on the part of the courts. Sun Capital Partners III, Read More

Plan Fiduciaries Beware! Strategies for Avoiding Cybersecurity Breach of Benefit Plan Documents

Plan fiduciaries have numerous responsibilities under the law when administering programs and handling participant funds and benefits, including the responsibility to make sure the technology they choose to use is secure. A cybersecurity breach, especially one that exposes personal identification information (PII) or leads to a loss of funds, can create significant liability for the plan. Who is Legally Read More

Going Viral! COVID-19 Diagnosis and Treatment Cost Relief for Certain Employer-Provided Health Plans

Written by Anne Tyler Hall and Eric Schillinger The impact of the 2019 Novel Coronavirus (or “COVID-19”) has been widespread in the U.S. over the last month, and the implications to employer-provided benefits are no exception. As explained in more detail below, those implications include, among others, recently issued Federal and State guidance regarding COVID-19 diagnosis and treatment cost-sharing relief (and Read More

Solicitor General Argues Against ERISA Pre-Emption in Eighth Circuit PBM Matter

A recent case argued in the Eighth Circuit, Rutledge v. Pharmaceutical Care Management Association, brings up questions of the extent to which ERISA preempts state law.  In Arkansas, the Pharmacy Benefit Managers (PBMs) are regulated by state statute, but the question in Rutledge is whether this statute is preempted by ERISA. While Arkansas law requires PBMs to reimburse pharmacies for a generic drug at a rate that Read More

Why Controlled Group Status Matters to Both Health and Welfare Benefits and Retirement Plans

A controlled group is a group of businesses that have common control by ownership.  The most common form of this arrangement is a parent company that owns 80 percent or more of the subsidiary company.  One or more of these relationships form a controlled group. Just as there can be multiple subsidiaries there can also be multiple, but common, parent companies. Defining the Controlled Group While the 80% control Read More

What Comes After the SECURE Act: Proposed Retirement Plan Legislation for 2020

The SECURE Act, which was signed into law in December 2019, includes major changes impacting retirement plans. Paying attention to the long-term needs and goals of constituents is always a top priority for legislators, so there are a number of further pieces of litigation currently on the table to continue to modify and improve the laws and regulations concerning retirement savings. Automatic Enrollment Safe Read More