Publications for Employee Benefits
The IRS recently issued proposed regulations that would expand the availability of hardship distributions under 401(k) and 403(b) plans (the “Proposed Regulations”). The Proposed Regulations reflect the changes that were implemented by the Bipartisan Budget Act of 2018 (the “Act”), and address many of the questions that were left unanswered by the Act.
IRC 642(c) Plans, referred to as “Pooled Income Funds” offer unique ways for participants to utilize tax favored deferred compensation.
A. Summary of the New Rules
The Bipartisan Budget Act of 2018 ("Act") includes three provisions that expand the availability of hardship distributions under a qualified retirement plan, each of which is described below.
An employee handbook is an important tool that employers use to communicate with employees about important workplace issues and can serve as an excellent defense to claims.
It can be hard enough for an employer to understand its obligations under state workers’ compensation laws. But it can be downright overwhelming when the myriad of other state and federal statutes, such as the Americans with Disabilities Act and the Family and Medical Leave Act, also come into play.
It is well established that the Michigan Worker's Disability Compensation Act (the "Act") provides that the recovery of benefits under the Act shall be the injured employee's exclusive remedy against an employer.
Public pension systems are increasingly underfunded. Data released in 2017 indicates that the median state funding ratio (the percentage of assets that a state has available for future payments to retirees) fell to 71.1 percent in 2016, down from 74.5 percent in 2015.
With summer right around the corner, many Michigan employers are staffing up with interns to help out with the workloads, and also as part of recruiting programs.
The U.S. Department of Labor (“DOL”) recently announced that its final rule (the “Final Rule”) on disability claims procedures for employer-provided disability benefits will go into effect on April 1, 2018.
In a recent opinion, the U.S. Supreme Court emphatically reaffirmed the requirement that collective bargaining agreements (“CBAs”) must be interpreted according to “ordinary principles of contract law” when deciding whether retired employees are entitled to health care benefits. CNH Industrial N.V. v. Reese, No. 17-515, 2018 WL 942419 (U.S. Feb. 20, 2018).
Since 2008, when the Michigan Medical Marihuana Act (the “MMMA”) went into effect, employers in Michigan have been presented with new and nuanced issues related to how the new marijuana law would impact employment-related decisions.
Many people spend more time working at their jobs than they do engaging in any other activity during waking hours. It’s inevitable, therefore, that workers will get hurt on the job.
The IRS has made changes to the process for amending and receiving approval for qualified retirement plans like 401(k) plans. The changes affected both "individually designed plans" and "pre-approved plans".
On December 22, 2017, the President signed into law the "Tax Cuts and Jobs Act" commonly referred to as "Tax Reform."
A new Michigan law allows some municipalities to issue bonds to fund unfunded pension liabilities or unfunded liabilities for retiree health care benefits. Before, Michigan municipalities had no power to issue bonds for those purposes.
The IRS has announced the cost-of-living adjustments applicable to pension plan limitations for 2013.
Recently, the Sixth Circuit Court of Appeals held that the Workers’ Disability Compensation Act does not preempt the Racketeer Influenced and Corrupt Organizations Act.
The Internal Revenue Service, Department of Labor and Department of Health and Human Services published final regulations describing the summary of benefits and coverage requirement of the Patient Protection and Affordable Care Act.
The Internal Revenue Service recently released the 2013 health savings account contribution limits, out-of-pocket maximums and high deductible health plan deductibles.
The Internal Revenue Service recently issued guidance regarding the $2,500 limit on salary reduction contributions to a health flexible spending account under the Patient Protection and Affordable Care Act.
The U.S. Department of Labor published the final Service Provider Fee Disclosure Regulation. The Final Regulation requires that certain retirement plan vendors who supply services to a "covered plan" disclose certain information to the employer sponsor with regard to the compensation that is received by the vendor for the performance of those services.
A participant who misses the 60-day rollover window may be eligible for an automatic waiver of the 60-day rollover rule if certain requirements are met.
The United States Supreme Court issued its long awaited ruling regarding the constitutionality of the Patient Protection and Affordable Care Act. The Supreme Court upheld PPACA, including the individual mandate that requires individuals to obtain health care insurance coverage or pay a penalty.
The Patient Protection and Affordable Care Act requires employers to report the aggregate cost of "applicable employer-sponsored health coverage" on each employee's Form W-2 beginning with the 2012 tax year. The Internal Revenue Service has released new guidance regarding this reporting requirement.
The Patient Protection and Affordable Care Act requires that the aggregate cost of "applicable employer-sponsored health coverage" be reported on an employee's Form W-2 beginning with the 2012 tax year.
The IRS recently issued guidance that addresses the tax-free treatment of employer-provided cell phones.
All qualified retirement plans that are categorized as "Cycle A" plans must be restated and submitted to the IRS for approval on or before January 31, 2012.
For plan years prior to January 1, 2009, qualified retirement plans were required to attach Schedule SSA to Form 5500 to report information relating to terminated employees who had deferred vested benefits payable from the plan.
Michigan's Health Insurance Claims Assessment Act was approved by Governor Snyder on September 20, 2011 and given immediate effect.
The IRS has announced the cost-of-living adjustments applicable to pension plan limitations for 2012.
What do you do when an employee says he needs leave to care for his "significant other’s kids?"
The Department of Labor recently issued a final regulation that extends the applicability dates for the Service Provider Fee Disclosure and the Participant-Level Fee Disclosure Regulations.
The U.S. Supreme Court has held that equitable relief may be available to employees under ERISA Sec. 502(a)(3) to reform the terms of a pension plan in the event of a fiduciary breach.
Effective for the first plan year that begins on or after August 1, 2012 (January 1, 2013 for a calendar year plan), a non-grandfathered group health plan is required to provide certain preventive health services for women.
The U.S. Department of Labor recently issued an interim policy regarding how an employer can electronically disclose to plan participants information that must be provided pursuant to the DOL’s Final Participant Level Fee Disclosure Regulation.
On September 24, 2011, Governor Snyder signed into law the Publicly Funded Health Insurance Contribution Act.
On September 24, 2011, Governor Snyder signed into law the Publicly Funded Health Insurance Contribution Act.
The Act makes many changes, including taxing income from pensions and other types of retirement plans. This articles summarizes those changes.
Senators Herb Kohl and Mike Enzi introduce new legislation to the Senate Finance Committee designed to protect retirement savings in 401(k) plans.
Group health plans that offer prescription coverage to Medicare eligible participants must provide notices to participants advising them whether their drug coverage is creditable or non-creditable.
As employers work to evaluate the impact of the Patient Protection and Affordable Care Act on their workers, insurance needs and balance sheet, many are wondering if and when the PPACA will apply to them.
The IRS requires that qualified plans report certain information relating to participants with deferred vested benefits in a qualified deferred compensation plan.
The United States Supreme Court recently held that for purposes of ERISA Sec. 502(a)(1)(b), the terms of a summary plan description cannot be enforced as terms of the plan it summarizes.
The IRS has recently identified compliance with the universal availability requirement as a recurring problem during its audits of Code Section 403(b) tax deferred annuity plans.
Certain cafeteria and health care reimbursement plan amendments must be adopted by June 30, 2011.
Many plans, in particular 401(k) plans, allow the participants to direct the investment of the amounts allocated to their respective accounts.
The U.S. Department of Health and Human Services’ Office for Civil Rights recently imposed a civil monetary penalty of just over $4.3 million against Cignet Health of Prince George’s County in Maryland.
Many governmental and nongovernmental nonprofit employers maintain retirement plans that are described as "403(b) Plans."
Qualified retirement plans, such as 401(k) Plans, ESOPs, Profit Sharing Plans and other retirement plans, virtually always provide a benefit payable to a beneficiary following the participant’s death.
The recently passed Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ("2010 Tax Relief Act") reduced the employee-share of the Old-Age, Survivors, and Disability Insurance Program ("OASDI") portion of social security taxes from 6.2% to 4.2% of wages earned in 2011 up to the taxable wage base of $106,800.
The Regulations Under the Genetic Information Nondiscrimination Act of 2008 (GINA) became effective January 10, 2011 for private employers (and certain other entities) with 15 or more employees.
Recently published IRS Notice 2011-1 delays the effective date of the Patient Protection and Affordable Care Act's (PPACA) nondiscrimination provisions.
On October 20, 2010, the U.S. Department of Labor published a final regulation implementing new disclosure requirements for participant-directed individual account plans.
Employer-provided cell phones and other similar telecommunications devices are no longer subject to heightened substantiation requirements under Internal Revenue Code Section 280F(d)(4) in order to be excluded from an employee’s taxable income as a working condition fringe benefit under Code Section 132(d).
Sponsors of qualified retirement plans should note certain approaching deadlines for amending their plans.
On November 26, 2010, the IRS issued guidance for 401(k) and 403(b) plans that permit "in-plan Roth rollovers."
The grandfathered health plan regulations issued this past summer contained rules for determining when changes to a group health plan would cause the plan to lose its grandfathered status.
The Final Regulations of Title II of the Genetic Information Nondiscrimination Act (GINA) were issued on November 9, 2010 and become effective 60 days later on January 10, 2011.
The IRS has announced the cost-of-living adjustments applicable to pension plan limitations for 2011.
Since the issuance of our Fall 2010 Employment, Labor & Benefits Quarterly, the IRS, on October 12, 2011, announced that it will postpone until 2012 the new reporting requirement that employers report the cost of coverage under an employer-sponsored group health plan.
Nonqualified deferred compensation arrangements were required to comply, in writing, with the highly technical rules of Internal Revenue Code Section 409A ("Section 409A") effective as of January 1, 2009.
The IRS recently issued guidance regarding whether paid time off ("PTO") credits donated under an employer-sponsored leave-sharing program are taxable to the donor employee if the donation is made by waiving the PTO credits before the PTO is earned.
Thousands of Americans lose health care coverage each year due to rescissions.
The Sixth Circuit recently broke precedent and joined a number of other U.S. circuit courts by preventing an ERISA plan administrator from correcting an inaccurate benefit calculation.
Each participant in a retirement plan is often given the opportunity to invest his or her plan account balance in various investment vehicles.
The Sixth Circuit Court of Appeals, the federal appeals court that governs Michigan, recently addressed the ability to transfer a pregnant employee to a light duty position without the transfer constituting an adverse employment action.
The IRS recently issued IRS Notice 2010-59 clarifying the definition of a qualified "medical expense" under the Patient Protection and Affordable Care Act.
The U.S. Department of Labor recently published new regulations that affect 401(k) plans and 403(b) plans that are subject to ERISA.
The Patient Protection Portability Care Act requires the distribution of certain notices describing changes that take effect for plan years beginning on or after September 23, 2010.
PPACA provides that certain group health plans and health insurance coverage in existence on March 23, 2010 are subject to only certain provisions of the PPACA.
The Affordable Care Act provides that certain group health plans and health insurance coverage existing as of March 23, 2010, are subject only to certain provisions of the Affordable Care Act.
A very small section of the Patient Protection and Affordable Care Act (PPACA) makes some major changes in Form W-2 reporting which will impact employers in the near future.
Early retirees are individuals age 55 and older who are enrolled in a certified employment-based plan, and not eligible for coverage under Medicare.
Section 1558 of PPACA amends the Fair Labor Standards Act by prohibiting discrimination against an employee who...
The IRS has just announced that during the week of May 17, 2010, a letter was sent by its Employee Plans Compliance Unit (EPCU) to 1,200 sponsors of 401(k) plans.
The Patient Protection and Affordable Care Act as amended ("PPACA") made several changes to cafeteria plans. Some of the most significant changes are summarized below.
If you were wondering whether the COBRA subsidy obligation expired on March 31, 2010, Congress has rather belatedly decided that it hasn't.
Congress recently approved an additional extension of the COBRA subsidy eligibility period for certain involuntarily terminated employees.
Nonqualified deferred compensation arrangements are required to comply, in writing, with the highly technical rules of Internal Revenue Code Section 409A ("Section 409A") effective as of January 1, 2009.
Federal law requires that participant contributions to a 401(k) plan be promptly deposited into a qualified trust that is established to hold qualified plan assets.
On February 17, 2010, most of the Health Information Technology for Economic and Clinical Health Act ("HITECH") became binding on the health care industry.
ESOP fiduciaries, generally the ESOP committee or the ESOP trustees, must make several decisions on behalf of the ESOP and may be subject to legal exposure if their decisions are not consistent with ERISA.
On January 29, 2010, the Department of Labor, the Department of the Treasury, and the Department of Health and Human Services jointly issued interim final regulations for the Mental Health Parity and Addiction Equity Act ("MHPAEA").
Effective May 1, 2010, smoking will be banned in all public places, including places of employment.
Employers who wish to review social media or employees’ personal web sites should have a policy in place informing employees that the company has a right to monitor employee use of the systems.
On February 17, 2010, most of the Health Information Technology for Economic and Clinical Health Act ("HITECH") becomes binding on the health care industry.
The Department of Defense Appropriations Act of 2010 (DOD) extends the COBRA subsidy previously created by the American Recovery and Reinvestment Act of 2009.
On December 19, 2009, President Obama signed the Department of Defense Appropriations Act (DDAA) which contains some major expansions and extensions relating to COBRA premium assistance.
Effective for plan years beginning on or after October 9, 2009, Michelle’s Law protects certain dependent children whose eligibility for coverage under a group health plan is based on the child’s full-time student status.
The trial court in Metro. Life Insurance Company v. Hanson, held that a qualified domestic relations order (QDRO), which awarded benefits under an ERISA welfare benefit plan to the participant’s children, was enforceable with respect to a welfare benefit plan.
Qualified retirement plans that are maintained by governmental employers must comply with various tax law changes.
For the second time in the last year, Congress has expanded the scope of the Family Medical Leave Act (FMLA).
The IRS has announced the cost-of-living adjustments applicable to pension plan limitations for 2010.
New Section 402(c)(11) of the Internal Revenue Code was added by the Pension Protection Act of 2006.
The IRS recently published Notice 2009-82. The Notice provides some relief from the age 70½ "required minimum distribution" (RMD) rules for 2009.
On October 28, 2009, President Obama signed into law the Fiscal Year 2010 National Defense Authorization Act (2010 NDAA).
The Federal Trade Commission ("FTC") has further delayed enforcement of the Red Flags Rule until June 1, 2010.
The administrator of a qualified retirement plan is required to provide each recipient of an eligible rollover distribution a written explanation of the tax treatment of that distribution.
The U.S. Department of Labor has issued guidance on the Form 5500 annual reporting requirements for tax-deferred annuity programs described in Section 403(b)...
The IRS recently illustrated two situations in Rev. Rul. 2009-31 in which the dollar equivalent of an employee’s unused paid time off (PTO) can be contributed to an employer’s profit-sharing plan without negatively affecting the plan’s qualified status.
Sponsors of qualified retirement plans should also be aware of approaching EGTRRA restatement deadlines.
Under the Employee Retirement Income Security Act ("ERISA"), an employer who adopts or agrees to participate in a qualified pension plan is required to make ongoing pension contributions to the pension fund.
Employees may be denied unemployment benefits between seasons if the Employer is designated a "seasonal employer" under the law.
Most lawyers, and their clients have historically viewed assets in a retirement plan as “safe” from all but the most highly protected creditors.
The Pension Protection Act of 2006 (“PPA”) and the Heroes Earnings Assistance and Relief Tax Act of 2008 (“HEART Act”) made significant changes to the rules governing qualified retirement plans.
There has been much discussion during the past several months about the American Recovery and Reinvestment Act ("ARRA") and its impact on COBRA continuation health coverage.
Under current law, a 401(k) plan that adopts a 3% safe harbor nonelective contribution to avoid ADP and ACP testing must do so before the beginning of the plan year; the contribution must remain in effect throughout the full 12-month plan year.
For plan years beginning after 2009, all qualified plans must allow a nonspouse beneficiary to elect a direct rollover to an individual retirement account or annuity.
The American Reinvestment and Recovery Act (stimulus legislation) has offered Michigan $138.9 million dollars to be used to expand unemployment compensation.
Several years ago, Congress permitted S corporations to sponsor employee stock ownership plans ("ESOPs").
The Federal Reserve System approved final rules that amend the regulations implementing the Truth in Lending Act of 1968 (“TILA”), widely known as “Regulation Z.”
Representative Rosa DeLauro (D-CT) and Senator Edward Kennedy (D-MA) are expected to reintroduce the Healthy Families Act in both houses.
The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65% reduction in the premium otherwise payable by certain involuntarily terminated individuals and their families who elect COBRA continuation coverage.
The 2009 American Recovery and Reinvestment Act requires a temporary reduction of COBRA premiums for all group health plans that are subject to COBRA.
President Obama recently signed into law Title III of the Children's Health Insurance Program (CHIP), which expands state CHIP (SCHIP) programs.
The American Recovery and Reinvestment Act of 2009 was enacted on February 17, 2009.
The IRS opened its determination letter program for all qualified retirement plans that are categorized as “Cycle D Plans.”
Congress passed the Worker, Retiree and Employer Recovery Act of 2008 on December 23, 2008.
Many employers are increasingly concerned about potential fiduciary liability relating to poor performance of 401(k) plan investment alternatives.
Employees whose employment was involuntarily terminated on or after September 1, 2008, and who failed to elect COBRA following the termination, must be given a second chance to elect COBRA coverage.
All qualified retirements plans categorized as "Cycle C" plans must be restated and submitted to the IRS for approval on or before January 31, 2009.
At long last, the Department of Labor’s Wage & Hour Division has issued the Final Rule under the Family and Medical Leave Act.
Many employers maintain a non-qualified, unfunded, deferred compensation plan (the "Plan") for certain select management and highly-compensated employees.
Traditionally, 403(b) plans have been subject to minimal governmental scrutiny.
On May 7, 2008, the Michigan Supreme Court held that the marriage amendment prohibits public employers from providing health insurance benefits to their employees’ qualified same-sex domestic partners.
The HEART Act was signed into law on June 17, 2008.
Many employers routinely pay severance in exchange for a release of claims embodied within a separation agreement.
In 2004 Congress enacted Internal Revenue Code ("Code") Section 409A, which dramatically changes the requirements for maintaining nonqualified deferred compensation arrangements.
Employers that administer 401(k) plans may be held liable to individual participants for fiduciary violations.
The IRS recently published regulations regarding distributions from a qualified pension plan upon attainment of normal retirement age, but prior to the employee’s separation from service.
The new proposed Treasury regulations governing automatic contribution arrangements under Internal Revenue Code Sections 414(k)(13) and 414(w) require that plan sponsors comply with certain notice requirements.
Current U.S. Department of Labor (DOL) regulations govern the deadline by which amounts withheld from a participant’s wages must be deposited into a qualified plan.
Earlier this year, President Bush signed into law the National Defense Authorization Act.
The Pension Protection Act of 2006 imposes a new filing requirement on certain small tax-exempt organizations (i.e., those with annual gross receipts normally totaling $25,000 or less).
The Pension Protection Act of 2006 (PPA) imposes new distribution requirements on certain retirement plans.
In July 2007, the IRS finalized comprehensive regulations under Section 403(b) of the Internal Revenue Code.
The Michigan Legislature recently adopted the Public Employees Health Benefit Act...