United States: Benefits Counselor February 2018

General Developments

DOL Confirms Final Disability Claim Regulations to Apply After April 1, 2018

The Department of Labor ("DOL") announced its final decision that the new disability claim regulations will apply to claims filed after April 1, 2018. The DOL had delayed the applicability date of the final regulations to allow commenters the opportunity to submit data and information on the regulation's costs and benefits. The DOL determined that the comments it received did not establish that the final regulations impose unnecessary regulatory burdens or significantly impair workers' access to disability benefits.

Sixth Circuit: City Can Require Winning Bidders to Contribute to Training Fund and Provide Benefits

In Allied Constr. Indus. v. City of Cincinnati, 879 F.3d 215 (6th Cir. 2018), the U.S. Court of Appeals for the Sixth Circuit held that the City of Cincinnati can require winning bidders for city construction projects to contribute to an apprenticeship fund and certify whether they provide health and retirement benefits. According to the court, the city's "responsible bidder ordinance" is enforceable because it is not preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"). The court held that the ordinance does not interfere with ERISA because the city was acting as a market participant, not a regulator, when it established the requirements for winning bidders. This is the first case wherein the Sixth Circuit has adopted the "market participant" doctrine with respect to ERISA. The market participant doctrine exempts a state law or local ordinance from federal preemption when the legislating body acts as a participant, not as a regulator, of a market. Five out of twelve circuits (Second, Third, Fifth, Sixth and Ninth) now apply various forms of the market participant doctrine in ERISA cases.

Retirement Plan Developments

PBGC Increases Civil Monetary Penalties

The Pension Benefit Guarantee Corporation ("PBGC") published final regulations increasing the maximum civil penalties for failures to provide certain notices or other material information under ERISA sections 4071 and 4302.

The maximum penalties under ERISA section 4071 are increased from $2,097 per day to $2,140 per day. Section 4071 penalties apply if a plan fails to provide a notice or other information required under subtitles A, B, C or D of Title IV of ERISA, or ERISA sections 303(k)(4) or 306(g)(4). Among other things, these include: annual reports; plan termination insurance coverage and plan termination provisions; employer liability (other than multiemployer plan withdrawal liability); payment of the variable rate portion of PBGC's premium; the financial condition of contributing sponsors of certain underfunded, single employer plans; and notices regarding the nonpayment of contributions.

The maximum penalties under ERISA section 4302 are increased from $279 per day to $285 per day. Section 4302 penalties apply to multiemployer plans that fail to provide certain notices regarding withdrawal liability.

IRS Publishes Compensation Tables for 2018

On January 8, 2018, the Internal Revenue Service ("IRS") issued compensation tables for 2018 for employers to calculate "permitted disparity" when integrating benefits under tax qualified pension, profit sharing and stock bonus plans with Social Security benefits. The taxable wage base to determine covered compensation increased from $127,200 for 2017 to $128,400 for 2018. The tables replace those released in November 2017.

PBGC Releases Premium Filing Instructions for 2018

The PBGC published its premium filing requirements for 2018 plan years. The annual premium rates for 2018 increased as follows:

2017 Rate 2018 Rate
Flat‑Rate Premium for Single Employer Plan $69 $74
Variable‑Rate Premium (per $1,000 of unfunded vested benefits) $34 $38
Cap on Variable‑Rate Premium $517 x Number of Participants $523 x Number of Participants

The premium filing requirements for 2018 are substantially similar to those for 2017, but plan sponsors should review their specific circumstances.

Seventh Circuit Upholds Slayer Statute, Plan Not Required to Provide Surviving Spouse Benefits

The U.S. Court of Appeals for the Seventh Circuit held that a woman who killed her husband, but was later found not guilty by reason of insanity, is not entitled to receive surviving spouse pension benefits. The court held that ERISA does not preempt Illinois' "slayer statute," which prohibits a person from financially benefitting from a murder. The U.S. Supreme Court has not yet addressed the issue of whether ERISA preempts slayer statutes, which nearly every state has adopted.  Other courts have also held that ERISA does not preempt slayer statutes in North Dakota, New York, and Nevada. The case is Laborers' Pension Fund v. Miscevic, No. 17‑2022, 2018 BL 28557 (7th Cir. Jan. 29, 2018).

Seventh Circuit Refuses to Consider Arguments Not Raised in Withdrawal Liability Arbitration

The U.S. Court of Appeals for the Seventh Circuit ruled that a Taft‑Hartley pension fund must refund over $600,000 in disputed withdrawal liability payments to an employer because the fund did not first raise its arguments in the arbitration. The dispute began after the employer paid the fund's withdrawal liability assessment, but then successfully challenged the assessment in arbitration under an exemption for companies in the business and construction industry. The fund argued that the arbitrator misinterpreted the exemption and asked that the Seventh Circuit overturn the award.  The court refused, holding that the fund should have raised the statutory interpretation arguments in the arbitration.  The case is Laborer's Pension Fund v. W.R. Weis Co., Inc., No. 16‑2944, 2018 BL 5953 (7th Cir. Jan. 8, 2018).

Health and Welfare Plan Developments

Short‑Term Spending Bill Extends CHIP Funding, Delays Cadillac and Other ACA Taxes

On January 22, 2018, Congress passed a short‑term spending bill that re‑opened the federal government after a three‑day shutdown.  The bill extends the Children's Health Insurance Program until fiscal year 2024.  The bill also extends the existing suspensions of the Affordable Care Act ("ACA") tax on high‑cost, employer‑sponsored health coverage (the "Cadillac Tax") until fiscal year 2022 and the medical device excise tax until fiscal year 2020, and suspends the annual fee on health insurance providers for fiscal year 2019.

EEOC Can Revise Wellness Plan Regulations on Own Timeline

The U.S. District Court for the District of Columbia held that the Equal Employment Opportunity Commission ("EEOC") is no longer required to notify the public by August 31, 2018 as to whether it will amend its regulations on incentives for wellness programs.  However, consistent with the district court's prior orders in AARP v. EEOC, No. 1:16‑cv‑02113 (D.D.C. Jan. 18, 2018), the EEOC's existing wellness regulations under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act will become ineffective on January 1, 2019.

HIPAA Covered Entities to Pay HHS $3.5 Million for Breaches

Fresenius Medical Care North America ("Fresenius") agreed to pay $3.5 million to the U.S. Department of Health and Human Services ("HHS") Office for Civil Rights to settle potential violations of the Health Insurance Portability and Accountability Act ("HIPAA") Privacy and Security Rules.  Fresenius also agreed to adopt a comprehensive corrective action plan.  Fresenius provides products and services for people with chronic kidney failure.  In 2013, Fresenius filed five breach reports for separate incidents implicating the electronic protected health information ("ePHI") of five covered entities owned by Fresenius.  The breaches included:  (1) failures to conduct a risk analysis for ePHI; (2) providing unauthorized access to ePHI for purposes not permitted by the Privacy Rule; (3) failures to implement policies and procedures to address security incidents and vulnerabilities; and (4) failures to encrypt and decrypt ePHI when it was reasonable and appropriate to do so.  The corrective action plan requires the covered entities to perform a risk analysis, develop a risk management plan, revise current policies and procedures on device, media and facility access controls, develop an encryption report, and educate its workforce on the revised policies and procedures.

HHS Recommends Software Upgrades to Protect Against a Computer Processor Vulnerability

HHS published a report regarding a vulnerability present in most computer processors sold over the last decade that could potentially expose protected health information. HHS considers the vulnerability of moderate significance because a breach generally could not occur without local access to the computer or device, and vendors are releasing software patches. HHS recommends installing operating system patches to Mac, Linux, and Microsoft systems to mitigate the risks of this widespread processor vulnerability.  As the patches may slow processor performance, HHS recommends that organizations test patches before implementation.

Upcoming Compliance Deadlines and Reminders

Retirement Plan Compliance Deadlines and Reminders

Quarterly Fee Disclosure and Benefit Statements for Participant‑Directed Defined Contribution Plans.  Sponsors of plans that permit participants to direct the investment of their accounts must provide participants with a fourth‑quarter benefit statement, as well as a disclosure of fees and administrative expenses deducted from the participants' accounts during the fourth quarter of the plan year, by February 14, 2018 (or within 45 days after the fourth quarter).

Health Plan Compliance Deadlines and Reminders

  1. HIPAA Breach Reporting. Plans must file their annual breach reports with HHS's Office for Civil Rights by February 28, 2018. The annual breach report is for breaches involving fewer than 500 individuals that occurred during the preceding year. Breaches involving 500 or more individuals must be reported no later than 60 calendar days from the date of the breach's discovery.
  2. Medicare Part D Creditable Coverage Disclosure. Calendar year plans providing prescription drug coverage must provide the annual creditable coverage disclosure to the Centers for Medicare and Medicaid Services by March 1, 2018 (or, for noncalendar year plans, 60 days after the beginning of the plan year).
  3. Form M‑1.  Multiple employer welfare plans providing health coverage must electronically file the annual Form M‑1 by March 1, 2018.  Employers may request a 60‑day automatic extension for the filing.
  4. Forms 1095‑B and 1095‑C.  Forms 1095‑B and 1095‑C must be annually distributed to participants and filed with the IRS.  Plan sponsors of self‑funded health plans and Applicable Large Employers ("ALEs") must distribute Forms 1095‑B and 1095‑C to participants by March 2, 2018, and must file with the IRS by April 2, 2018 if filing electronically (February 28, 2018 if filing by U.S. Mail).
  5. Forms 1094‑B and 1094‑C.  Plan sponsors and ALEs must file Forms 1094‑B and 1094‑C with the IRS by April 2, 2018 if filing electronically (February 28, 2018 if filing by U.S. Mail).  These forms serve as transmittal forms for Forms 1095‑B and 1095‑C.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Reinhart Boerner Van Deuren s.c.
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Reinhart Boerner Van Deuren s.c.
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions