Employee Benefits Archives - Page 31 of 142

The Overturning of Roe v. Wade

by McDermott Will & Emery | Jun 27, 2022 | Benefit Controversies, Digital Health, Employee Benefits, Health and Welfare Plans, Privacy and Data Security

On June 24, 2022, the Supreme Court of the United States issued its decision in Dobbs v. Jackson Women’s Health Organization (Dobbs), overturning Roe v. Wade (Roe) and upending 50 years of precedent protecting a woman’s right to privacy in choosing to abort a pregnancy prior to the point of viability.

The effect of this decision on US companies cannot be understated. Any organization whose operations touch family planning services in any way (e.g., providers, those that facilitate operations, investors, payors, employers that provide family planning benefits and health plan service providers) should immediately examine their precise services, geographic footprint, corporate structure and organizational priorities.

To determine the best steps to take for you and your business, we invite you to join us for the second program in our new webinar series on Wednesday, June 29, at 2:00-3:00 pm EDT with McDermott Partners Stacey Callaghan, David Gacioch and Caroline Reignley and Associate Sarah Raaii, who will analyze and share the latest developments around the reversal of Roe and its likely impacts on US companies.

Register for the webinar here.

Mature ESOPs: Remodeling the House You Own

by Allison Wilkerson | Jun 23, 2022 | Employee Benefits, Employee Stock Ownership Plans (ESOPs), Fiduciary and Investment Issues, Retirement Plans

On May 5, 2022, McDermott Partner Allison Wilkerson delivered a presentation during the 2022 TEA National Conference titled “Mature ESOPs: Remodeling the House You Own.” Her presentation focused on the traits of a sustainable employee stock ownership plan (ESOP), common concerns of a mature ESOP and other ESOP-specific investment issues. Allison and her co-presenters also discussed redemption, re-leveraging and the hot acquisition market.

The presentation concluded with the following suggestions:

There are options available no matter where you are in the ESOP life cycle.
Gauge your employee-owners.
Respond with changes that make the ESOP more relevant.
Reach out for help—the ESOP community is vested in your company’s success.

For questions about employee benefits matters, please contact Allison or McDermott’s employee benefits practice team.

Proposed Minimum Distribution Regulations Prompt Concerns

by Todd Solomon | Jun 22, 2022 | Employee Benefits, Fiduciary and Investment Issues, Retirement Plans

Employee benefits professionals are inquiring about relief options for proposed regulations for required minimum distributions (RMDs). According to this Tax Notes article, the proposed regulations would make determining the RMDs during the plan participant’s lifetime and the designated beneficiary more challenging for plan sponsors, IRA trustees and custodians, and third-party administrators. One of the major concerns is the implementation of the 10-year distribution period for most beneficiaries of individuals who die in 2020 or later. McDermott Partner Todd Solomon said the 10-year distribution period is a “somewhat surprising development [that] is likely to leave some beneficiaries and their advisers confused and frustrated because of the added layer of complexity and the inability to stretch distributions as under prior law.”

See What’s Next with McDermott+Consulting’s 340B Ligitation Tracking Tool

by Emily J. Cook and Rodney Whitlock | Jun 17, 2022 | Employee Benefits, Health and Welfare Plans

The 340B program landscape is constantly shifting. Wednesday’s US Supreme Court American Hospital Association v. Becerra decision is of critical importance to hospitals that participate in the 340B program. The Court held that the US Department of Health and Human Services (HHS) improperly imposed a payment cut of almost 30% on 340B drugs paid by Medicare. Yet, while this decision is significant, it is not the end of the litigation surrounding the payment cut. The case has been remanded for further deliberation, which will include a determination of the remedies.

McDermott+Consulting has launched the 340B Litigation Tracking Tool, an up-to-date resource following the 30+ state and federal 340B program legal challenges. No more searching online or sorting through your newsfeed for updates on important case developments. This tracker, available 24/7 and routinely monitored by our team, delivers concise updates to help you make informed risk analyses on what’s next for your business in the evolving 340B landscape.

View the 340B litigation tracking tool here.

Homework and Deadlines Matter: New IRS Pre-Audit Compliance Program for Retirement Plans

by Marchan Clark, Jeffrey Holdvogt and Diane Morgenthaler | Jun 16, 2022 | Employee Benefits, Fiduciary and Investment Issues, Retirement Plans

Retirement plan sponsors should be aware of a new Internal Revenue Service (IRS) pilot program, which permits plan sponsors to conduct a pre-examination “check-up” of retirement plan administration before the IRS begins a plan examination. As part of the program, the IRS will send a letter notifying a plan sponsor that its retirement plan has been selected for an upcoming examination and give the plan sponsor 90 days to identify and voluntarily correct any compliance issues that may be self-corrected. Failure to respond by the 90-day deadline will result in an examination. Retirement plan sponsors who receive a pre-examination notice should immediately begin working with their lawyers and other advisors to determine the best way to respond to the IRS notice.

PRE-EXAMINATION PILOT PROGRAM

The IRS pre-examination compliance pilot program gives plan sponsors a chance to correct certain errors before an examination begins. If a plan sponsor identifies errors, then the plan sponsor may be able to self-correct using the procedures set forth in the IRS Employee Plans Compliance Resolution System (EPCRS) program, and the plan sponsor may notify the IRS of its corrective actions. If mistakes are not eligible for self-correction, the plan sponsor may request a closing agreement. With a closing agreement under the pilot program, the IRS will apply the Voluntary Correction Program (VCP) fee structure to determine the sanctions amount rather than the Audit CAP Program fees, which are unpredictable and typically higher. The IRS will review the plan sponsor’s corrective actions and determine whether it agrees that the plan sponsor appropriately corrected the mistakes. The IRS will then determine whether to issue a closing letter or to conduct a limited or full scope audit. The pilot program begins in June 2022.

It’s not clear what factors the IRS will consider when determining whether to conduct a limited or full scope audit following a plan sponsor’s response. However, it stands to reason that a plan sponsor’s efforts at good faith compliance with the correction requirements may serve to limit the scope because typically the IRS wishes to promote self-correction efforts. It’s also not clear whether the 90-day pre-examination period will apply to all retirement plan audits or only to those randomly selected to be part of the pilot program.

NEXT STEPS FOR PLAN SPONSORS

Plan sponsors who receive a pre-examination notice should immediately begin working with their lawyers and other advisors to determine the best ways to respond to the IRS notice. If you receive an initial letter or have questions about the IRS compliance and correction programs, please contact your McDermott lawyer or the authors listed below.

Preparing for the Demise of Roe v. Wade and the Criminalization of Abortion in Some US States: Practical Considerations for a Post-Roe World

by David Quinn Gacioch, Stacey Callaghan, Dana McSherry, Caroline Reignley, Paul Thompson and Sarah Raaii | Jun 15, 2022 | Benefit Controversies, Employee Benefits, Health and Welfare Plans

Sometime in the next several weeks, the Supreme Court of the United States will issue its decision in Dobbs v. Jackson Women’s Health Organization (Dobbs). Based on the draft majority opinion authored by Justice Samuel Alito that was leaked to Politico in early May, there is a significant chance that the Court will overrule Roe v. Wade (Roe) and Planned Parenthood v. Casey (Casey) by holding that there is no federal constitutional right to obtain an abortion and leaving individual states free to substantially restrict abortion or prohibit abortion altogether.

The effect of this likely decision on US companies would be substantial. Every US healthcare provider whose services include any aspect of family planning should give serious thought to how this likely new post-Roe reality will affect its offerings and operations. This includes not only those that provide pregnancy termination services (via surgical or pharmaceutical means, whether brick-and-mortar or telehealth/virtual), but also potentially those providing in vitro fertilization services, and conceivably even some contraceptive providers at some point down the line.

America’s Hospital Regulator Wasn’t Designed for a Pandemic

by Sandra M. DiVarco | Jun 14, 2022 | Employee Benefits, Health and Welfare Plans

According to this Politico article, the US Centers for Medicare and Medicaid Services (CMS) has had difficulty enforcing its own COVID-19-related hospital rules. The agency often lacks the necessary resources to make sure its regulations are followed. McDermott Partner Sandra M. DiVarco said small changes—like allowing patients to wear highly protective N95 face masks—that CMS publicizes are “not always very coordinated.”

Access the article.

Understanding a Trustee’s Role in Management Incentive Plans

by McDermott Will & Emery | Jun 9, 2022 | Benefit Controversies, Employee Benefits, Employee Stock Ownership Plans (ESOPs), Executive Compensation, Fiduciary and Investment Issues, Retirement Plans

On May 5, 2022, McDermott Partner Erin Turley delivered a presentation during the 2022 TEA National Conference titled “Understanding a Trustee’s Role in Management Incentive Plans.” Her presentation focused on the trustee’s role in Management Incentive Plans (MIPs), how retention and performance stock appreciation rights (SARs) impact an employee stock ownership plan (ESOP) and ways to avoid trustee pitfalls with a MIP. Erin also discussed types of synthetic equity design decisions, incentive stock options, non-statutory stock options and phantom stock/SARs.

The presentation concluded with the following fiduciary considerations:

Since the issuance of any equity or synthetic equity can have a potentially dilutive impact on the ESOP, it is important for any plan to be in the best interest of the ESOP plan participants.
As a result, one of the primary objectives of the plan should be to identify and select a group of people to be incentivized and rewarded to drive value for everybody.
For example, in the case of a SAR, you are rewarding a group of individuals based only on appreciation in the value of the company stock. If the value goes up, that’s good for everybody.
The overall compensation program should be in line with compensation practices for comparable-type positions in the industry, perhaps taking geography into account.

For questions about employee benefits matters, please contact Erin or McDermott’s employee benefits practice team.

German Tax Aspects of Cross-Border Remote Working

by Gero Burwitz and Isabella Denninger | Jun 8, 2022 | Benefit Controversies, Employee Benefits, Employment, Labor

As a result of the COVID-19 pandemic, remote working became a necessity. Despite the easing lockdowns, the trend is likely to stay, particularly with “workstations” being actively promoted by the travel industry; however, there are considerable tax consequences for international employers. In this International News article, McDermott’s Gero Burwitz and Isabella Denninger discuss the complexity of this new working order and how international businesses can navigate it.

Access the article (pg. 11).

When Are Cryptocurrencies Appropriate Investments for Retirement Plans and IRAs?

by Brian Tiemann and McDermott Will & Emery | Jun 7, 2022 | Employee Benefits, Fiduciary and Investment Issues, Privacy and Data Security, Retirement Plans

The US Department of Labor (DOL) recently issued guidance for the first time on the investment of retirement plan assets in cryptocurrencies. Compliance Assistance Release No. 2022-01 cautions 401(k) plan fiduciaries to “exercise extreme care” before allowing participants to invest plan assets in cryptocurrencies because cryptocurrencies “present significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft, and loss.” In this Intellectual Property & Technology Law Journal article, McDermott Partners Andrea S. Kramer and Brian J. Tiemann outline what retirement plan fiduciaries need to know about cryptocurrency investments in the current market.

Access the article.

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