The Department of Labor issued a technical release today addressing the effect of the Supreme Court’s decision in U.S. v. Windsor on employee benefit plans. The Windsor decision struck down section 3 of the Defense of Marriage Act, thereby requiring the federal government to recognize same-sex marriages that are recognized
Continue Reading Not To Miss the Party, Department of Labor Joins the Place Of Celebration Approach Following Windsor
Plan Documents Should Not Be Rewritten When an SPD Does Not Disclose Wear-Away, Industry Groups Say
In an amicus brief filed last week, the ERISA Industry Committee and Chamber of Commerce of the United States of America stated that a court should not rewrite a plan document, or penalize the administrator who follows the plan document, merely because a summary plan description does not disclose wear-away
Continue Reading Plan Documents Should Not Be Rewritten When an SPD Does Not Disclose Wear-Away, Industry Groups Say
Health Coverage Reporting Rules Create New Burdens for Employers
The IRS has released proposed regulations that implement two significant new reporting requirements for employer group health plans. Employers and insurers that provide minimum essential health coverage must report information to the IRS about the coverage provided to each individual for each month, with a copy of the statement to the individual. Employers with at least 50 full-time employees must report additional information to the IRS, with a copy to each full-time employee, to indicate whether the coverage they offer (if any) is affordable and provides minimum value. Both reporting requirements will become effective in 2015. Reporting entities must develop administrative systems and procedures before the effective date so that they will be able to begin collecting the required information in 2015.
Below is summary of the requirements for private employers sponsoring single-employer plans followed by a discussion of the reporting requirements.
| Section 6055 Returns | Section 6056 Returns | |
| Who Must File | Insurer, for insured plans. Employer, for self-insured plans | Employers with 50 or more full-time employees (regardless of whether or how coverage is provided) |
| Form | 1095-B | 1095-C |
| Content |
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| Additional Content for Notice to Individual |
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none |
| Due Date for Returns | To the IRS: February 28 (or by March 31, if filing electronically).
To the individual: January 31 |
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Continue Reading Health Coverage Reporting Rules Create New Burdens for Employers
Celebrating the Arrival of Windsor Guidance: Same-Sex Marriages Will Be Recognized For Federal Tax Purposes Based on Place of Celebration
The IRS issued guidance today defining same-sex marriage for purposes of federal tax rules. Following the Supreme Court’s decision in United States v. Windsor last June invalidating section 3 of the Defense of Marriage Act (DOMA), federal law no longer limits the definition of marriage to opposite sex spouses. However,
Continue Reading Celebrating the Arrival of Windsor Guidance: Same-Sex Marriages Will Be Recognized For Federal Tax Purposes Based on Place of Celebration
Federal Courts Decide Rights of Same-Sex Spouses After DOMA
More than a month after the Supreme Court struck down section 3 of the Defense of Marriage Act (“DOMA”) in United States v. Windsor, employers are still waiting for the federal government to answer fundamental questions about the rights of same-sex spouses in the post-DOMA world. In the meantime, however, lower federal courts have begun to come to grips with these questions in decisions interpreting and applying the Supreme Court’s Windsor decision.
A significant issue for employers is whether they should determine a couple’s marital status based on the law of the state where the marriage was celebrated, even if the couple now resides in a state that does not recognize same-sex marriage. A number of states have “mini-DOMA” statutes declaring that the state will not recognize same-sex marriages, including marriages performed in other jurisdictions.
Although the Supreme Court held in Windsor that the federal government cannot refuse to recognize a same-sex marriage that is recognized under state law, the Supreme Court did not address section 2 of DOMA, which provides that a state is not required to recognize a same-sex marriage performed in a different state. As a result, Windsor leaves open the possibility that a same-sex couple’s marriage might be valid in some states and not in others. A rule that requires plan sponsors to look to a couple’s state of residence rather than to the state of celebration to determine the validity of their marriage would create significant administrative burdens.
Continue Reading Federal Courts Decide Rights of Same-Sex Spouses After DOMA
Final Rules Confirm Contraceptive Coverage Exemption and Accommodation for Religious Institutions
Final regulations issued recently clarify and confirm the contraceptive coverage exemption and accommodation for religious institutions. The Affordable Care Act generally requires non-grandfathered group health plans and insurance policies to cover the cost of contraceptives. A religious employer, however, is entirely exempt from this requirement under the final regulations and under related guidelines issued by the Health Resources and Services Administration.
The final regulations also confirm that certain other organizations with religious objections to the coverage are eligible for an “accommodation.” Under the accommodation, the organization does not need to provide the coverage under its health plan, but its insurer or third party administrator does. Student health plans arranged by eligible organizations are also eligible for the religious accommodation. The regulations, which were issued by the Departments of Treasury, Labor, and Health and Human Services, explain who ultimately pays for coverage under the accommodation.
Continue Reading Final Rules Confirm Contraceptive Coverage Exemption and Accommodation for Religious Institutions
Treasury Delays ACA’s Employer Mandate until 2015
The Department of Treasury announced today that it is delaying the effective date of the tax imposed on employers (with at least 50 full-time employees) who fail to provide health coverage to full-time employees and their child dependents. Under the Affordable Care Act, an employer that does not provide adequate
Continue Reading Treasury Delays ACA’s Employer Mandate until 2015
Supreme Court’s DOMA Decision Has Significant Implications for Employers and Employee Benefit Plans
Earlier today in United States v. Windsor, the Supreme Court struck down section 3 of the federal Defense of Marriage Act (“DOMA”). Section 3 of DOMA limits the definition of marriage for purposes of federal law to marriage between individuals of the opposite sex. The Court held that DOMA deprives same sex couples of due process in violation of the Fifth Amendment. The Court’s ruling applies to marriages recognized under state law; the Court did not address whether the Constitution requires states to recognize same sex marriage.
The Court’s opinion notes that DOMA affects over “1,000 statutes and numerous federal regulations.” Many of the affected statutes and regulations relate to employee benefits. As a result, the decision is likely to affect the benefits provided under employee benefit plans and the tax treatment those benefits receive. In some cases, the Court’s decision could have implications for benefits that have already been paid. We encourage employers to review their benefit plans and plan administration to identify changes that might be required or desirable as a result of the ruling.
Continue Reading Supreme Court’s DOMA Decision Has Significant Implications for Employers and Employee Benefit Plans
Verizon Prevails on Motion To Dismiss Challenge to $7.5 Billion Pension Settlement
Earlier today, a federal district court granted Verizon’s motion to dismiss a class action lawsuit challenging its recent transfer of $7.5 billion of pension liabilities to Prudential (Lee v. Verizon, N.D. Tex.). The court concluded that plaintiffs had failed to state a claim that the transaction violated ERISA’s
Continue Reading Verizon Prevails on Motion To Dismiss Challenge to $7.5 Billion Pension Settlement
ERISA Advisory Council Holds Hearing on Pension De-Risking
The subject of pension de-risking continues to receive considerable attention. Last week, the ERISA Advisory Council waded into the issue, holding a hearing on “Private Sector Pension De-risking and Participant Protections.” The Council, which advises the Secretary of Labor on the Labor Department’s administration of ERISA, is examining the ways in which employers de-risk pension obligations, the legal constraints on these strategies, and whether the Labor Department should revise any current guidance or issue any new guidance addressing pension de-risking.
Continue Reading ERISA Advisory Council Holds Hearing on Pension De-Risking