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
District Court Rules in Favor of Fiduciaries in Recent Prudence, Loyalty Breach Claim
A recent lawsuit argued in the federal appeals court for the Southern District of New York handed a win to plan fiduciaries on a prudence and breach of loyalty claim lawsuit. In the case, Patterson v. Morgan Stanley, the court dismissed an appeal filed by Morgan Stanley stating that, contrary to Plaintiff’s claims, ERISA “does not require clairvoyance on the part of plan fiduciaries, nor does it countenance Read More
Mitigation Alternatives to the Excise Tax on “Excess” Compensation
The 2017 Tax Cuts and Jobs Act (TCJA) added a 21% excise tax on “excess” executive compensation paid by tax-exempt organizations to certain employees. It is the organization, not the employee, that is responsible for paying this tax. Because this tax applies to individuals who are generally highly compensated, this can be a significant tax burden for organizations. However, there are some strategies organizations can Read More
Recent ESOP Valuation Case Emphasizes Importance of Fiduciary Duty in CEO Buy-Out
Many businesses use Employee Stock Ownership Plans (ESOPs) to incentivize employees and as a succession planning tool for owners as they look to turn the business they created into a successful and thriving affair without selling it off to another company. ESOPs are governed, in part, under ERISA regulations. As with all ERISA-governed benefits plans, the role and responsibilities of the fiduciary are Read More
Executive Compensation Planning Ideas in an Economic Downturn
Any time the economy is growing, it’s important to consider and plan for the next economic slowdown. When exactly this will occur is something that experts debate, and opinions vary from industry to industry, but planning for lean years during the good years is always wise, especially in the area of executive compensation. Planning creates a smooth path and ensures that executives and management team members are Read More