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Employee Benefits Legal Resource Site
Employee Benefits Legal Resource Site
2018 Supplement to the Governmental Plans Answer Book Published
(Posted on September 20, 2018 by Carol V. Calhoun)
The 2018 supplement to the Fourth Edition of the Governmental Plans Answer Book has now been published.
The 2018 Supplement to Governmental Plans Answer Book gives subscribers the most relevant, current, and practice-oriented answers to the issues faced daily by plan administrators, attorneys, actuaries, consultants, accountants, and other pension professionals as they navigate the requirements and procedures involved in administering their plans. The 2018 Supplement to Governmental Plans Answer Book examines the following significant changes and case law in this area and includes:
- Recent state-level legislative developments affecting design, eligibility, and related issues (see Q 2:126) and investment, including divestiture (see Q 7:98) and fiduciary education requirements (see Q 7:32).
- Law sources and practical points to consider in discerning whether a participant is allowed to make a beneficiary designation by electronic means (see Q 12:5.1).
- Court decision that recognizes, even on interpleader, deference to a claims administrator’s discretionary authority (see Q 12:25).
- Updated explanations about community-property laws (see Chapter 12).
- How a provision in the Constitution of the United States and in many states’ constitutions might preclude applying a revocation-on-divorce statute to a beneficiary designation or contract made before the statute was enacted or took effect (see Q 12:54).
- Citations for the laws of three states that do not end a person’s minor status at age 18 (see Q 12:57).
- Recent court decision that an order that conditions a payment on whether the payee remains unmarried is not a qualified domestic relations order (see Q 13:10.1).
- Information about state laws that restrict a plan-approved domestic relations order to provisions more restrictive than those allowed for a non-governmental plan’s qualified domestic relations order (see Chapter 13).
- A 2018 ethics interpretation about a lawyer’s duties concerning the lawyer’s errors (see Chapter 13).
- Updated explanations about same-sex marriage and domestic partnerships (see Chapters 12 and 13).
- The Securities and Exchange Commission’s Regulation Best Interest applicable to broker-dealers that advise employee benefit plans (see Q 7:2).
- Expanded coverage of cases in text cross-referenced to Appendix E, Recent Court Decisions of Interest Involving Governmental Plans (see Appendix E).
For more information on this book, written by Carol V. Calhoun, Cynthia L. Moore, and Keith Brainard, you can use the following links:
New Immigration Rules Create Issues for Employer Health Plans
(Posted on August 9, 2018 by Carol V. Calhoun)
A leaked draft of Proposed Department of Homeland Security (“DHS”) regulations indicates that certain non-US citizens may be disadvantaged in extending or adjusting their immigration status if they obtain health insurance coverage through the Health Insurance Marketplace (“Marketplace”) set up under the Patient Protection and Affordable Care Act (“ACA”) or Medicaid, or obtain benefits under the Children’s Health Insurance Program (“CHIP”) for their dependents (even US citizen dependents). From an employee benefits perspective, the proposed rules have three effects on employers:
- Employees may have questions about whether they can or should switch coverage from the Marketplace or CHIP to the employer’s health plan.
- Employers are required to give notices to employees on hiring about the availability of health insurance through the Marketplace, and annually about the availability of CHIP. Employers may want to consider adding information to these notices regarding the potential impact on immigration of accepting either of these benefits.
- Employers that wish to retain non-US citizen employees may wish to improve health benefits (particularly for dependents) to discourage use of the Marketplace or CHIP.
The change in regulations would have a number of effects on employers who hire non-US citizens, particularly in instances in which the employer is sponsoring them (such as for an H-1B visa or a green card) which are beyond the scope of this post. However, this post discusses the specific impact on employee benefits of the proposed regulations, and potential employer responses to them. Read more.
Carol V. Calhoun quoted in “Will the Nick Sabin tax apply to Nick Sabin?”
(Posted on March 26, 2018 by Carol V. Calhoun)
Carol V. Calhoun was quoted in a March 12, 2018 article in Tax Notes, dealing with the issue of whether the new excise taxes on excess compensation and excess severance benefits will apply to public colleges and universities. The wording of the law makes it unclear whether the law should apply to the very governmental entities most likely to have employees that would otherwise be affected by it.
Sample Subrogation and Reimbursement Clauses for Summary Plan Description Now Available
(Posted on March 16, 2018 by Carol V. Calhoun)
A new article by Carol V. Calhoun, published by Lexis Practice Advisor, provides sample subrogation and reimbursement clauses to be used in a summary plan description. Such clauses are typically used in an instance in which an employer’s health or disability plan wants to avoid a situation in which a participant gets a double recovery for the same illness or injury. For example, an employee covered by both the employer’s health plan and a spouse’s health plan should not have the same medical expenses paid by both plans. Or an individual who is hit by a car, and recovers lost wages from the driver’s insurance company, should not also be able to receive disability benefits for the same period.
“Effect of the Tax Cuts and Jobs Act of 2017 on Nonprofits and Governments,” PowerPoint now available
(Posted on February 15, 2018 by Carol V. Calhoun)
The Tax Cuts and Jobs Act of 2017 made a number of changes affecting the compensation and benefits that governmental, church, and other tax-exempt organizations can provide to their employees. Given the short time between introduction and passage of the Act, it is not surprising that many of the new provisions are unclear in their application. Moreover, some of them may produce unintended consequences for these organizations.
As part of a symposium on “Recent Developments in Benefits/Executive Compensation Affecting Tax Exempt Organizations,” Carol V. Calhoun gave a presentation on the ways in which the Tax Cuts and Jobs Act of 2017 will affect the compensation and benefits of such organizations. A copy of the PowerPoint for her speech can be found at this link.
“Overview of the Tax Cuts and Jobs Act: What Individuals and Business Owners Need to Know,” PowerPoint now available
(Posted on February 1, 2018 by Carol V. Calhoun)
The PowerPoint slides for the presentation entitled “Overview of the Tax Cuts and Jobs Act: What Individuals and Business Owners Need to Know,” given at the offices of Venable LLP on February 1, 2018, are now available at this link.
Nonprofits and Governments Face Compensation and Benefits Issues under the New Tax Law
(Posted on January 11, 2018 by Carol V. Calhoun)
The recently passed tax bill imposes a 21% excise tax on excess compensation and excess severance benefits of certain executives of nonprofit and governmental employers. The provision has a substantial impact on the compensation and benefits that such organizations can provide for their executives. Moreover, the determination of which employers, and which executives, are covered includes several traps for the unwary.
New chart: Pre-approved Plan Eligibility Checklist
(Posted on January 5, 2018 by Carol V. Calhoun)
The IRS maintains pre-approved plan programs (1) for retirement plans described in I.R.C. § 401(a) (qualified plans), and (2) for annuity contracts or custodial accounts described in I.R.C. § 403(b) (403(b) plans). A new chart shows what types of plans are and are not eligible to use the pre-approved plan program.
New article: Executive Compensation Arrangements for Tax-Exempt Organizations
(Posted on January 2, 2018 by Carol V. Calhoun)
Tax-exempt organizations face special legal challenges in developing compensation packages for their executives. A new article published in the Lexis Practice Advisor provides practical guidance on developing benefits for executives of nonprofits.
Navigating Pension and Annuity Payments: General Rule and Taxation Guidelines
(Posted on December 18, 2017 by Carol V. Calhoun)
A 76-page PowerPoint presentation from a live Lorman Telecom webinar, “Navigating Pension and Annuity Payments: General Rule and Taxation Guidelines,” is now available by clicking here.
The webinar covered distributions from qualified plans (pension, profit sharing, stock bonus, and 401(k), including Roth accounts), IRAs (regular and Roth), and commercial annuities. Topics covered:
- Sources of distributions (employer contributions, employee deferrals, Roths, after-tax contributions, and rollovers);
- Restrictions on how early and how late distributions can be taken;
- Penalties on early withdrawals;
- Taxation of lump sum distributions;
- Taxation of withdrawals and partial distributions;
- Taxation of annuities and other periodic payments;
- Plan withholding and reporting; and
- Participant reporting.
A download of the program and other information can be found at this link, which also contains a 50% discount code.