Welfare Plans

The Supreme Court’s decision last week in Obergefell v. Hodges is big news: it held that the 14th Amendment requires states to license same-sex marriages and to recognize lawful out-of-state same-sex marriages, and thus legalized same-sex marriage throughout the country.  In a final section that begins with a philosopher’s take — “No union is more profound than marriage…”  — and ends with a jurist’s — “It is so ordered.” — the Court captured the attention of SCOTUS junkies and the rest of the country alike, leading to an outpouring of celebrations, headlines, social commentary and musing about the future.

Obergefell clearly is of cultural importance and has personal significance for many people, but what does it mean for private sector employers and their employee benefit plans?  Surprisingly little.  Private sector employee benefits are governed primarily by federal law, which had its watershed moment on this issue in 2013 when the Supreme Court required the federal government to recognize same-sex marriage in United States v. Windsor.Continue Reading Marriage Equality Decision Is Big News (But May Have Little Impact on Private Sector Employee Benefit Plans)

For the second time in three years, the U. S. Supreme Court has upheld a key provision of the Affordable Care Act. The Supreme Court ruled last week in King v. Burwell that premium tax credits are available to lower-income individuals who buy health insurance on a federal exchange, as well as to those who buy insurance on a state exchange. The ruling means that the Affordable Care Act will persist in its current form, at least for now, and employers must continue to grapple with its restrictions, mandates, and reporting requirements.
Continue Reading Supreme Court Saves Affordable Care Act Again

A few weeks ago we posted about a new out-of-pocket limit for group health plans that provide family coverage. HHS announced that the ACA cost-sharing limit for self-only coverage applies to each individual who has family coverage. This embedded individual limit is in addition to the existing limit for family coverage, which applies to the aggregate costs of the covered individuals.
Continue Reading More Guidance on New Cost-Sharing Limit

After years of confusing and sometimes contradictory signals (described in previous posts here and here), the Equal Employment Opportunity Commission has finally proposed a regulation explaining how employment-based wellness programs can satisfy the Americans with Disabilities Act.
Continue Reading EEOC Proposes New Restrictions for Health Awareness Programs

In case you missed this development—which was buried in the preamble of a 129-page Federal Register notice dealing mainly with rules for the individual and small group markets—HHS has created a new out-of-pocket limit for group health plans that provide family coverage. HHS says that the limit for self-only coverage applies to each individual who has family coverage. This new individual limit is in addition to the existing limit for family coverage, which applies to the aggregate costs of the covered individuals.
Continue Reading HHS Creates A New Out-of-Pocket Limit For Health Plans

A recent Supreme Court decision, Perez v. Mortgage Bankers Ass’n, highlights two important points about the authority of the U.S. Department of Labor, IRS, and other administrative agencies to interpret rules:

  1. U.S. courts will generally follow administrative interpretations of statutes and an agency’s regulations, except in rare circumstances. This deference extends to “sub-regulatory” guidance, like opinion letters, rulings, notices, amicus briefs, and probably even FAQs posted on a website; and
  2. Agencies have wide latitude to change their minds on interpretive guidance, without any obligation to consult with the public.

The decision illustrates the practical importance of getting involved in the regulatory process, and advocating for important clarifications before regulations are finalized. Although agencies may change interpretive guidance unilaterally, unambiguous regulations generally cannot be changed without advance notice and an opportunity to comment.

Background.  This case involved whether mortgage-loan officers are eligible for overtime under the Fair Labor Standards Act.
Continue Reading Supreme Court Ruling on Agency Flip-Flopping Affects Rules for Benefit Plans

By now most employers are beginning to come to terms with the Affordable Care Act coverage mandates and reporting requirements that apply to the group health coverage of their U.S. workforce. For global businesses, though, the problems do not stop at the U.S. border. These companies must also determine how ACA affects U.S. citizens and lawful permanent residents working abroad.

Most companies face four major questions concerning health coverage for U.S. expatriates:

  • Must they provide group health coverage to employees working abroad in order to satisfy the employer mandate?
  • Must their employees working abroad maintain a minimum level of health coverage in order to satisfy the individual mandate?
  • If an individual is covered by a foreign group health plan or insurance policy, does that coverage qualify as minimum essential coverage that satisfies the employer and individual mandates?
  • If an employer provides group health coverage to U.S. citizens or residents working abroad, is that coverage subject to the same requirements that apply to employer health coverage in the U.S.?

Continue Reading Affordable Care Act Issues for U.S. Expatriates

Earlier this week, the Supreme Court issued its opinion in M&G Polymers USA v. Tackett, addressing the question whether a collective bargaining agreement is presumed to provide vested retiree medical benefits.  Unlike pension benefits, welfare benefits, such as retiree medical coverage, are not subject to statutory vesting rules under ERISA.  Accordingly, whether an employer may reduce or eliminate retiree medical coverage depends on the promises the employer has made.  These promises are typically analyzed under ordinary contract principles.  However, a seminal 1986 decision in the Sixth Circuit, International Union, United Auto, Aerospace, & Agricultural Implement Workers of America v. Yard-Man, established an inference—perhaps even a presumption—that retiree medical benefits required by a collective bargaining agreement could never be taken away unless the bargaining agreement expressly provided otherwise.  Last Monday, the Supreme Court unanimously overturned Yard-Man and its progeny.
Continue Reading Supreme Court Overturns Inference of Vesting of Bargained Retiree Benefits

New proposed regulations would change some of the requirements for the uniform summary of benefits and coverage (“SBC”) that group health plans must provide to participants.  The Labor Department has also made available proposed updates to the SBC template, coverage examples, uniform glossary of terms, and related materials on its website.  
Continue Reading Changes Proposed for Health Benefits Summary

New proposed regulations modify the rules that would allow employers to offer limited wraparound health coverage as an “excepted benefit” to employees who purchase individual health coverage through an Exchange.  Although the new rules relax some of the controversial requirements proposed in 2013, they also create new restrictions and reporting requirements.

The new proposed regulations include a sunset date that generally allows the coverage to remain in effect for only three years (or for the duration of a collective bargaining agreement, if longer).  The preamble of the new proposal explains that the rules will operate as a pilot program that will allow the agencies to evaluate their effect on employer-provided health coverage.  Employers have until January 22, 2015, to comment on the proposed regulations. 
Continue Reading Agencies Propose Pilot Program for Wraparound Health Coverage