Employee Benefits

By now, many employers have had at least one case of COVID-19 in their workplace. Especially considering the sweep of tort lawsuits across the country, employers’ responses to the presence of an infection in the workplace is of crucial importance to managing both legal and reputational risk exposure. As your legal risk management partner, HBL offers the following three strategies for responding to cases of COVID-19 in the workplace… Tip #1: Promptly identify and safely isolate employees who are experiencing COVID-19 symptoms. When employees suspect they may have COVID-19 or are experiencing COVID-19 symptoms, your most important job (from a…
A class action lawsuit has been filed in the U.S. District Court in Minnesota against UnitedHealth Group over an overpayment recovery process known as cross-plan offsetting that the plaintiffs claim is a prohibited transaction under ERISA. Cross-plan offsetting is a common practice that has been used for years by insurers and third-party administrators (TPAs) to recover overpayments made to health service providers. To make themselves whole, insurers and TPAs “recover” the overpayment by withholding another health plan’s payment to the same provider. The new case — Scott et al. v. UnitedHealth Group Inc. — claims that UnitedHealth breached its fiduciary…
The Treasury Inspector General for Tax Administration (TIGTA) recently released a heavily redacted audit report – Improvements Are Needed to Ensure That Employer Shared Responsibility Payments Are Properly Assessed – in which it faults the IRS for being too lenient on Affordable Care Act (ACA) employer shared responsibility mandate reporting and compliance. The ACA shared responsibility mandate requires that employers with at least 50 or more full-time employees offer affordable, minimum essential health coverage to at least 95% of their full-time employees and their dependents. Employers must report their compliance annually to the IRS via Forms 1094-C and 1095-C. Once…
Earlier this year, a lawsuit was filed in U.S. District Court for the Southern District of Texas against Shell Oil Company by several participants in the company’s 401(k) plan, claiming that Shell allowed its plan recordkeeper – Fidelity Investment Institutional Operations Company, Inc. (FIIOC) – to use the participants’ personal information to cross-sell other financial products and services outside the plan in breach of its fiduciary duties under ERISA. At the heart of the plaintiff’s case is their contention that 401(k) plan participant data is a plan asset and the use of that data for nonplan purposes constitutes a breach…
On June 29, 2020, the U.S. Department of Labor (DOL) issued a Notice of Proposed Class Exemption (“Notice”) that reinstated its previous “five-part test” to determine who is an investment advice fiduciary under ERISA as well as a proposed prohibited transaction exemption for investment advice fiduciaries that is based on the Department’s temporary policy adopted after a 2018 ruling by the Fifth Circuit Court of Appeals vacated the DOL’s 2016 Fiduciary Rule. Reinstatement of DOL’s 5-Part Test for Investment Advice The DOL amended the Code of Federal Regulations to execute the Fifth Circuit’s order, which effectively reinstated the Department’s “five-part…
On October 14, 2020 the Equal Employment Opportunity Commission (EEOC) issued a final rule that amends its procedural regulations. By increasing the EEOC’s efficiency, these procedural changes may result in an increase to employers’ liability exposure.  The regulations make the following two relevant changes: Formalize a procedure for the electronic transmission of EEOC complaints and other charge-related documents. Adopt a more understandable notice structure for claims that are denied.  These new regulations make the EEOC process more efficient and accessible for employees. On one hand, a more efficient EEOC could be useful in weeding out claims that lack merit. On…
On June 23, 2020, the Department of Labor (DOL) issued a proposed rule to clarify investment duties for plan fiduciaries under the Employee Retirement Income Security Act of 1974 (ERISA) when it comes to environmental, social and governance (ESG) investing. Under ERISA, plan fiduciaries are required to act solely in the financial best interests of plan participants and beneficiaries. The DOL has issued prior guidance regarding ESG investing that clarified economic returns on an investment must be a fiduciary’s primary consideration – in other words, fiduciaries cannot sacrifice returns or assume additional risk when making investment choices for ERISA plans,…
On June 26, 2020, the IRS issued Notice 2020-51, which provides guidance on the waiver of required minimum distributions (RMDs) for 2020 from certain retirement plans under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the required beginning date for RMDs under the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”). The SECURE Act extended the age for beginning RMDs to 72 for all those who turned 70 ½ after December 31, 2019. Under the SECURE Act, RMDs from an employer-sponsored retirement plan or IRA must begin on April 1 of the calendar year…
During times of stock market volatility, there is typically an increase in the number of ERISA claims filed seeking recovery of investment losses. The COVID-19 pandemic certainly qualifies as a market volatility event, giving plaintiffs an opportunity to bring breach of fiduciary claims based on company stock losses in qualified retirement plans. In these cases, plaintiffs typically assert that, based on information that plan fiduciaries had about the value of company stock, they should have reduced or eliminated a plan’s investment in company stock or disclosed that information so the stock would be properly valued. However, doing so would most…
The Employee Retirement Income Security Act of 1974 (ERISA) became law before the computer age, so there are no provisions in the Act dealing with cybersecurity. In addition, there is no formal guidance from the IRS or Department of Labor on cybersecurity responsibilities either, leaving it to the courts to determine responsibilities under ERISA when a cybersecurity breach occurs that results in theft from a participant’s account. This was the case in Leventhal v. MandMarblestone Group LLC, where a plan participant sued his third-party plan administrator and plan custodian after his 401(k) account was drained by cyber criminals. Claim and…