With the recent election, the fate of the ACA is uncertain. However, we can be fairly certain that, whatever the changes may be, it is unlikely that we will return to life as it was prior to the enactment of the ACA on March 23, 2010. What the “new” ACA will look like, we can’t know, so it is important to continue to be compliant with the laws and regulations as they are currently, unless and until those laws and regulations change.
On May 17, 2016, the U.S. Equal Opportunity Commission (EEOC) issued an ADA Final Rule amending applicable regulations and interpretive guidance implementing Title I of the Americans with Disabilities Act (ADA), and a GINA Final Rule, under Title II of the Genetic Information Nondiscrimination Act (GINA), clarifying how the ADA and GINA Rules apply to employer wellness programs. In addition, the EEOC issued a Q & A document for each new rule, ADA Rule Q & A and GINA Rule Q & A, addressing key questions about each rule’s applicability and implementation.
We have previously discussed The Importance of the Official Plan Document including the uncertainty of whether one document could perform double duty as “the Plan document” and the summary plan description (“SPD”). While it is still “not a sure bet” as to how the U.S. Supreme Court would rule, a recent ruling has held that the SPD can, in fact, be the governing plan document.
It is now a part of the strategic business plan for most employers to have implemented some form of wellness program for their employees. These programs are intended to improve the health of employees with the goal of preventing sickness and motivating employees to lead healthier lives. From the employer’s perspective, these programs are aimed toward the critical financial goals of decreasing (i) the rising cost of healthcare, (ii) illness related absenteeism, and (iii) reduced performance while at work. Often, these programs include wellness screening tasks, including the collection of biometric data (height, weight, blood pressure, cholesterol, and blood glucose levels) to identify health risks. It is estimated that 80% or more of employers with a wellness program screen their employees for evaluation and preventive interventions. As part of the wellness landscape, however, the Equal Employment Opportunity Commission (EEOC) has been challenging employer wellness programs for allegedly violating the Americans with Disabilities Act (ADA).
On May 18, 2015, the U.S. Supreme Court in Tibble, et al. v. Edison International et al, unanimously held that there is a continuing duty under ERISA for fiduciaries to monitor and remove imprudent investments. With this ruling, the Supreme Court vacated a 9th Circuit case which had held that, under ERISA’s 6-year statute of limitations, a claim alleging a breach of fiduciary duty concerning a plan investment initially selected outside the 6-year statutory period could only be brought if there was a change in circumstances which would trigger a fiduciary to re-examine the fund’s inclusion in the plan. The Supreme Court ruling also – in effect – reversed similar prior rulings in the 4th and 11th Circuits. Essentially, for all intents and purposes going forward, the Supreme Court ruling in Tibble provides for a rolling 6-year fiduciary liability window for a violation of the continuing duty to monitor investments.
The Supreme Court of the United States recently vacated a decision that made an employer responsible for the lifetime costs of its retirees’ health benefits, despite there being no language in the labor agreement with the union stating that the employer had this responsibility. The Court sent the case back to the appellate court to determine whether the parties intended for the employer to pay for all of the retiree health care costs in perpetuity.
“Every employee benefit plan shall be established and maintained pursuant to a written instrument.” That is the first sentence in ERISA’s fiduciary responsibility provision. The ERISA-mandated “written instrument” – the official plan document – is a powerful document; it defines the employer’s contractual undertaking with respect to the plan’s participants. In recent decisions, courts have distinguished between a writing that is enforceable as “the plan” and other plan-related instruments such as the summary plan description (“SPD”), an insurance policy, or an administrative services agreement (“ASA”).
The first open enrollment period for obtaining health coverage through the ACA’s Health Insurance Marketplace ended on March 31, 2014. That means that individuals without coverage can no longer obtain private coverage through the Marketplace for 2014 unless they are eligible for special enrollment by virtue of having a “qualifying life event.” Qualifying events for purposes of COBRA are also “qualifying life events” under the Marketplace rules. So, for example, a participant in an employer-sponsored group health plan who loses coverage under the plan due to termination of employment (other than for gross misconduct) is eligible for COBRA coverage or may purchase Marketplace coverage in lieu of COBRA. This “special enrollment event” for Marketplace coverage is available for 60 days from the time coverage under the employer’s group health plan ends.
Good news may be on the horizon for those employees who find they are scrambling to buy an extra pair of glasses or rush to the dentist in order to spend the remaining funds in their Health Flexible Spending Account (HFSA or FSA) before the end of the plan year. On October 31, 2013, the IRS released Notice 2013-71 which modifies the “Use-or-Lose” rule for Health FSAs. Beginning immediately, employers may amend their Section 125 cafeteria plans to permit employees to carryover up to $500 in unused funds into the next plan year.
In May 2013, the U.S. Department of Labor (“DOL”) issued a guidance and a revised model COBRA election notice in anticipation of the approaching effective date of the insurance exchanges required by the Affordable Care Act (“ACA”). Specifically, beginning on January 1, 2014, individuals and employees of small businesses will have access to coverage through a new private health insurance market known as the Health Insurance Marketplace. Open enrollment for health coverage through Marketplace began on October 1, 2013.