New Immigration Rules Create Issues for Employer Health Plans
(Posted on August 9, 2018 by )

Department of Homeland SecurityA 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:

  1. Employees may have questions about whether they can or should switch coverage from the Marketplace or CHIP to the employer’s health plan.
  2. 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.
  3. 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.

Outlook on Employee Benefits
(Posted on April 24, 2017 by )

Carol V. Calhoun spoke at the 2017 Stable Value Investment Association (SVIA) Spring Seminar on “Outlook on Employee Benefits.” The Meeting Booklet, and outlines of each of the topics covered, are below:


Copy of the meeting booklet


A Trump Presidency: What Does It Mean for Employee Benefits?”


  • Issue: protecting plan participants and retirement investors from receiving advice that is in the interest of the adviser rather than the participant
  • Monitoring of formal advice programs has been in place before the fiduciary rule. See DOL Advisory Opinion Letter 2007-01A, which said, “If Subsidiary B is a fiduciary by virtue of rendering investment advice within the meaning of 29 CFR 2510.3-21(c), the provision of such investment advice involving self-dealing will subject the fiduciary adviser to liability under section 406(b) of ERISA.”
  • The DOL issued proposed regulations in 2010 and 2015. Each iteration of the rules has attempted to balance more carefully a desire to promote participant education with a desire to prohibit advisors from operating in their own self-interest.
  • New rule covers more ground, including rollover distribution conversations and retirement readiness tools.
  • Plan sponsors will need to be aware of circumstances in which there has been a “recommendation” made regarding the investment, distribution or account management of a retirement account.


  • Determine the structure of the committee including appropriate size, membership, designated responsibilities, and frequency of meetings.
  • Clear appointment process (name or function, but not both)
  • Both selection and training designed to ensure expertise
  • Ongoing monitoring, e.g., regular reports to the company’s board of directors
  • Document all committee actions and decisions.


  • Affordable Care Act
    • MacArthur Amendment
      • Would generally preserve ban on preexisting conditions exclusions, coverage up to age 26, and essential health benefits
      • Would increase age-related spread on premiums from 3:1 to 5:1.
      • Would allow applications for waivers from essential health benefits and from community rating rules (except gender). Waiver of health status rules would need to be accompanied by participation in federal or state high risk pools.
    • Alternative: Try to get the ACA to implode by not appropriating funds to cover cost-sharing reductions.
      • For people less than 250% of the federal poverty line, insurance companies may not charge deductibles, but are supposed to be reimbursed by the federal government
      • Not clear whether this is to be funded by special appropriation (which Congress has failed to pass).
      • Obama administration funded it out of general appropriation, was sued by the House.
  • Changes to HSAs
    • Ryan would like to increase the HSA limit to the maximum out-of-pocket cost.
    • Can act almost as a retirement account, but targeted to medical costs.
    • Downside is that they are available only with a high deductible health plan.
  • Hostility to socially responsible investing/economically targeted investments
    • Interpretive Bulletin 94-01, 29 C.F.R. 2509.94–1: “if the above requirements are met, the selection of an ETI, or the engaging in an investment course of action intended to result in the selection of ETIs, will not violate section 404(a)(1)(A) and (B) and the exclusive purpose requirements of section 403.”
    • Interpretive Bulletin 08-01, 29 C.F.R. 2509.08-1: “In light of the rigorous requirements established by ERISA, the Department believes that fiduciaries who rely on factors outside the economic interests of the plan in making investment choices and subsequently find their decision challenged will rarely be able to demonstrate compliance with ERISA absent a written record demonstrating that a contemporaneous economic analysis showed that the investment alternatives were of equal value.”
    • Interpretive Bulletin 2015-01 withdrew Interpretive Bulletin 08-01, and returned to the guidance of Interpretive Bulletin 94-01.
    • Will we go back to Interpretive Bulletin 08-01?
  • Diminished enforcement of protections for LGBT employees.
    • Federal employment
      • Retained Executive Order 13672, which prohibited contractors from discriminating on the basis of sexual orientation or gender identity.
      • Eliminated Executive Order 13673, which required companies wishing to contract with the federal government to show that they had complied with various federal laws and other executive orders.
    • Other employment
      • EEOC’s Strategic Enforcement Plan (SEP): treat discrimination based on sexual orientation or gender identity as sex discrimination under Title VII
      • Several cases won, mostly on transgender issues
      • In U.S. EEOC v. Scott Medical Health Center, District Court for the Western District of Pennsylvania denied a motion to dismiss case on discrimination against a gay employee.
      • Will this administration continue this policy? And if not, what is the prospect for participant lawsuits?


  • Executive Order of April 21: Secretary of the Treasury to identify in an interim report to the President all significant tax regulations issued by the Department of the Treasury on or after January 1, 2016 that:
    • impose an undue financial burden on United States taxpayers;
    • add undue complexity to the Federal tax laws; or
    • exceed the statutory authority of the Internal Revenue Service.
    • Identification within 60 days, report on mitigation within 150 days.

  • Decline in both regulations and agency staffing means that plan sponsors and participants will be looking less to the federal government for guidance.
  • States likely to become more involved, meaning you need to look at 50 state laws instead of one federal law. See, e.g., state proposals to require employer participation in IRAs.
  • Lack of regulations means fewer defenses to participant lawsuits.

What’s Happening with the Affordable Care Act?
(Posted on January 25, 2017 by )

Affordable Care ActThe recent flurry of activity around the Affordable Care Act (ACA) has many people confused about where it stands, and what the employer’s obligations are. The following summarizes the activity so far:

Legislative Repeal Activity

A popular meme suggests that the Senate voted to eliminate virtually all of the provisions of the ACA, including the ability to obtain insurance in spite of pre-existing conditions, the requirement to cover adult children up to the age of 26, etc. This is not the case.

Read more.

A Trump Presidency: What Does It Mean for Employee Benefits?
(Posted on November 29, 2016 by )

White HouseBased on both campaign promises and Donald Trump’s plans for his first 100 days, a Trump presidency is likely to make major changes in employee benefits law. The most significant ones are likely to be:

  1. Major changes in the Affordable Care Act (although the timing and extent of such changes are unclear), combined with expansion of health savings accounts.
  2. Postponement or elimination of the recently issued Department of Labor fiduciary regulations.
  3. Loosening of executive compensation rules.
  4. Further cutbacks in IRS guidance and audit activity.
  5. Increased hostility to consideration of noneconomic factors in selecting retirement plan investments.
  6. Diminished enforcement of protections for LGBT employees.
  7. Increased activity at the state level, including establishment of state-sponsored retirement plans for private employers.

These issues, and others of less general concern, are discussed below. Read more.

If You Like Your Insurance, You Can Keep Your Insurance… At Least For Another Year
(Posted on November 14, 2013 by )

HealthInsuranceIn the wake of negative publicity about individuals and small businesses losing their existing health insurance due to the Affordable Care Act, the Department of Health & Human Services, in consultation with the Treasury Department and the Department of Labor, has provided transitional relief. The transitional relief applies only if certain conditions are met, as follows:

Read more

Health care costs now the biggest recurring family expense; governments look to employers to help
(Posted on June 5, 2013 by )

Health care costsA new Milliman report indicates that the average health care cost for a family of four is $22,030. This compares with average annual mortgage payments of $12,732. Indeed, it is close to the average amount spent to send a child to a public college or university ($22,261).

On average, the employer currently pays about $12,886 of the cost of health care in the form of employer subsidy. The Affordable Care Act (“Obamacare”) does not change this reliance on employer subsidies as the main funding mechanism for health care. So, what measures are being taken to encourage employers to continue or expand health care subsidies? Read more

Governmental Health Plans Face New Fee for 2014-2016
(Posted on April 16, 2013 by )

One of the least noticed provisions of the The Patient Protection and Affordable Care Act (PPACA), sometimes referred to as Obamacare, is a transitional reinsurance fee applicable to 2014 through 2016. The Department of Human Services issued regulations implementing this provision on March 11, 2013. These regulations clarify that although governmental entities are exempt from tax and from most of ERISA, health plans that governmental employers maintain for their employees will be subject to the new fee.

Read more