IRS Updates Correction Procedures for Qualified Plans

Recently, the IRS issued Revenue Procedure 2021-30 to update its guidance on the correction program under the Employee Plans Compliance Resolution System (EPCRS). Under EPCRS, plan sponsors are permitted to correct failures using one of three correction methods: the Self-Correction Program (SCP), the Voluntary Correction Program (VCP), and the Audit Closing Agreement Program (“Audit CAP”). Rev. Proc. 2021-30 Read More

IRS Has New Requirements for Employer Discretionary Matches

Every six years, sponsors of 401(k) plans that utilize pre-approved plan documents must update those documents and file them with the IRS for approval. Then, employers using these pre-approved plan documents must adopt the updated pre-approved plan. Employers must adopt the most recent Cycle 3 restatement by no later than July 31, 2022. The IRS has new Cycle 3 restatement requirements for employers that utilize a Read More

PBGC Issues IFR on Special Financial Assistance for Distressed Multiemployer Plans Under ARPA

On July 9, 2021, the Pension Benefit Guaranty Corporation (PBGC) issued an interim final rule (IFR) on the process for eligible distressed multiemployer pension plans to calculate and apply for Special Financial Assistance (SFA) awards under the American Rescue Plan Act of 2021 (ARPA). Following is a summary of the key components of the IFR: SFA Award Calculation Plan sponsors that qualify for PBGC assistance may Read More

The ARPA Rescue Plan for Distressed Multiemployer Plans

Under the American Rescue Plan Act of 2021 (ARPA), certain financially troubled multiemployer pension plans are eligible for financial assistance from the Pension Benefit Guaranty Corporation (PBGC), which estimates that approximately 11 percent of multiemployer pension plans in the U.S. are in critical condition. Plan sponsors that qualify for PBGC assistance may apply for a one-time lump sum payment to cover all Read More

American Academy of Actuaries Provides Comments on ARPA’s Temporary Funding Relief Provisions for Multiemployer Pension Plans

On July 22, 2021, the American Academy of Actuaries (“the Academy”) provided comments to the Department of Treasury and the IRS on temporary funding relief under the American Rescue Plan Act of 2021 (ARPA). The comments pertain to interpretive issues and considerations for the temporary funding relief provisions outlined in sections 9701, 9702, and 9703 of ARPA as follows: Section 9701. Temporary Delay of Read More

California Grocery Stores Fined for Not Complying With COVID Leave Rules

California’s labor commissioner has levied fines totaling almost $448,000 against three El Super grocery stores for their failure to comply with California’s COVID-19 paid sick leave policy for 95 workers affected by the coronavirus. The state labor commissioner's office launched an investigation in September 2020 after receiving complaints from El Super employees and a referral from the labor union that represents Read More

Understanding the Interplay Between the No Surprises Act and State Laws

The No Surprises Act (NSA), which was part of the Consolidated Appropriations Act, 2021, that became law in December 2020, restricts medical providers from sending consumers surprise medical bills for emergency care, transport by air ambulance, or non-emergency care at an in-network facility when patients are unknowingly treated by an out-of-network doctor or lab. The NSA includes a provision that exempts Read More

Minnesota District Court Dismisses Cross-Plan Offsetting Claim

On May 20, 2021, the U.S. District Court for the District of Minnesota dismissed a breach of fiduciary duty class action against UnitedHealth Group over an overpayment recovery process known as cross-plan offsetting that the plaintiffs claimed is a prohibited transaction under ERISA. The court found that the plaintiffs lacked standing to challenge the practice since none of them had been denied benefits or suffered Read More

IRS Updates FAQs on ARPA-Related Paid Sick and Family Leave Tax Credits

On July 29, 2021, the IRS updated its FAQs on the paid sick and family leave tax credits under the American Rescue Plan Act of 2021 (ARPA). The updated FAQs now include wages paid for leave taken by workers who accompany individuals to COVID-19 vaccination appointments and those who care for individuals recovering from any COVID-19 vaccine-related illness. Following are the FAQs updated by the IRS on paid sick and Read More

Are Captives An Equalizer for Small Employer Health Plan Cost Mitigation?

One of the first lawsuits to be filed over vaccine mandates was dismissed in June by a Texas district court that found limits on employee behavior is “part of the bargain” of employment. The suit challenged Houston Methodist Hospital’s vaccine mandate after the hospital suspended 178 employees for failing to meet the vaccination deadline.  In their claim, Houston Methodist employees argued that taking the vaccine Read More