A federal district court in Washington recently granted preliminary approval to a $6 million settlement of a mental health parity class action suit against Regence Blueshield. Plaintiffs claimed that defendants routinely excluded and limited coverage of the essential therapies to treat children with developmental disabilities. A fairness hearing is scheduled for September 11, 2015. The case is K.M. v. Regence Blueshield, No. 13-1214 (W.D. Wash. Apr. 22, 2015).
The First Circuit recently applied an abuse of discretion standard of review to a claim for top hat plan benefits. Plaintiff Robert Niebauer, a former executive of Crane, brought a claim for executive severance plan benefits and a claim under ERISA section 510 for interference with his rights to benefits. The district court granted summary judgment in favor of Crane on both claims, finding that the denial was not arbitrary or capricious, and there was no adverse employment action to support his interference claim. Continue Reading
On April 16, 2015, the Equal Employment Opportunity Commission (EEOC) released proposed regulations covering wellness programs that involve disability-related inquiries or medical examinations. The release of the proposed regulations follows months of EEOC enforcement actions against employers alleging that wellness programs sponsored by the employers violated the Americans with Disabilities Act (ADA) despite compliance with 2013 regulations jointly issued by the Department of Labor (DOL), the Department of the Treasury (Treasury) and the Department of Health and Human Services (HHS) that permitted such programs under ERISA and the Affordable Care Act (ACA). With a few notable exceptions (described below), the proposed regulations are somewhat consistent with the existing DOL guidance on employer-sponsored wellness programs. However, the EEOC has requested comments on multiple topics that could significantly alter the regulatory requirements. Continue Reading
Beginning July 1, 2015, California employers will be required to grant paid sick leave to nearly all California employees in compliance with California’s new paid sick leave law, the Healthy Workplaces, Healthy Families Act of 2014. The law applies to all employers who employ at least one employee who works in California for at least 30 days in a given year, and covers any such employee, including part-time, temporary, and/or seasonal employees. The law includes rules regarding accrual rates, carryover of unused time, usage, payment (including amounts and timing), notices to employees, workplace posters, recordkeeping and retaliation.
For more information on the requirements of the new California law, please refer to our California Employment Law Blog.
You may also learn more about the law and how to manage implementation in our upcoming webinar on April 29, 2015.
On April 14, 2015, the U.S. Department of Labor (DOL) issued its highly anticipated re-proposed regulation addressing when a person providing investment advice with respect to an employee benefit plan or individual retirement account (IRA) is considered to be a fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (Code). As discussed below, the new proposal (available here) offers a general definition of fiduciary investment advice that would expand the group of people who would be considered fiduciaries. The proposal contains a number of carve-outs for particular types of communications that the DOL does not consider to be fiduciary in nature. The DOL also has proposed a new set of prohibited transaction exemptions and certain amendments to existing class exemptions applicable to fiduciaries that would allow certain broker-dealers, insurance agents and others who provide investment advice to continue to engage in certain transactions and to receive common forms of compensation that would otherwise be prohibited as conflicts of interest. Continue Reading
Yesterday, the U.S. Department of Labor issued its highly anticipated re-proposed regulation addressing when a person providing investment advice with respect to an employee benefit plan is considered a fiduciary under ERISA. The DOL stated that it believes its proposal is necessary because the current regulatory scheme no longer adequately protects plans, participants, beneficiaries, and IRA owners from conflicts of interest, imprudence and disloyalty.
The proposed rule offers a general definition of fiduciary investment advice, subject to specific carve-outs for particular types of communications that are not considered fiduciary in nature. In addition, the DOL has simultaneously proposed a new set of prohibited transaction exemptions and certain amendments to existing exemptions in order to permit certain common fee and compensation practices to continue.
A comprehensive client alert is forthcoming. The text of the proposed rule is available at http://www.dol.gov/ebsa/regs/conflictsofinterest.html.
A federal court recently dismissed ERISA breach of fiduciary duty claims asserted by Delphi Beta Fund, LLC, a hedge fund, against two of its bank lenders, because there was no precedent for applying ERISA’s fiduciary duties to a third party lender to a hedge fund. See Delphi Beta Fund, LLC v. Univest Bank and Trust Co., 2015 BL 89360 (E.D. Pa. Mar. 27, 2015). Continue Reading
A class of former LandAmerica Financial Group employees agreed to a $5 million settlement of stock-drop claims arising from LandAmerica’s 2008 bankruptcy, and have submitted the agreement for court approval. LandAmerica filed for bankruptcy following the 2008 collapse of its title insurance subsidiary. Continue Reading
Defendants Ameriprise Financial, Inc., the fiduciary committees of the Ameriprise 401(k) plan, and individual committee members agreed to settle a lawsuit brought by a class of participants in the Ameriprise 401(k) plan for $27.5 million. Continue Reading
Less than a week after issuing significant modifications to the Employee Plans Compliance Resolution System (EPCRS) (as described in our March 31, 2015 blog), the Internal Revenue Service (IRS) further modified EPCRS through the release of Revenue Procedure 2015-28. The new guidance provides welcome relief (provided certain requirements are met) from the current standard (or safe harbor) EPCRS correction method for elective deferral failures, which has been widely viewed as providing affected participants with a windfall. Also, in an effort to facilitate the adoption of automatic contribution arrangements and prompt correction of failures, the IRS has established favorable safe harbor correction methods for elective deferral failures. Continue Reading