Employee Benefits Legal Blog : Employee Benefits Lawyer & Attorney : Fox Rothschild Law Firm : Health Care, Retirement, ERISA : Philadelphia, New York, Northeast

Since benefit plans are covered by tax regulations, I regularly read tax publications that come from our friends at the IRS.  While not purely "benefits" related, I did think that the information in publication FS-2012-12 was interesting.  It is the latest in a series of IRS tips on how to avoid identity theft.

Here are some of the top things that the IRS wants taxpayers to know about identity theft  avoidance:so you can avoid becoming the victim of an identity thief.

1. The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS does not send emails stating you are being electronically audited or that you are getting a refund.
2. If you receive a scam e-mail claiming to be from the IRS, forward it to the IRS at phishing@irs.gov.
3. If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov,’ forward that link to the IRS at phishing@irs.gov.
4. If your Social Security number is stolen, another individual may use it to get a job. That person’s employer may report income earned by them to the IRS using your Social Security number, thus making it appear that you did not report all of your income on your tax return. When this occurs, you should contact the IRS to show that the income is not yours. Your record will be updated to reflect only your information. You will also be asked to submit substantiating documentation to authenticate yourself. That information will be used to minimize this occurrence in future years.
5. Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don’t know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice.
6. If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification – such as a Social Security card, driver’s license, or passport – along with a copy of a police report and/or a completed IRS Form 14039, Identity Theft Affidavit, which should be faxed to the IRS at 978-684-4542. Please be sure to write clearly. As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490. You should also follow FTC guidance for reporting identity theft at www.ftc.gov/idtheft.
7. Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your Social Security number.
8. While preparing your tax return for electronic filing, make sure to use a strong password to protect the data file. Once your return has been e-filed, burn the file to a CD or flash drive and remove the personal information from your hard drive. Store the CD or flash drive in a safe place, such as a lock box or safe. If working with an accountant, you should ask them what measures they take to protect your information.

You can get more tips from reading FS-2012-07 and FS-2102-8.

While not specifically directed to plan administrators, I think point 8 above is a useful one to remember if you are submitting forms electronically.  There have actually been reported instances where company and benefit plan identities have been stolen so don't assume identity theft applies only to individuals.

And since we are talking about "identity theft," plan administrators should also be reminded that they have a lot of information about participants and beneficiaries that would be very useful to thieves.  Make sure you have appropriate security protocols built into your administration process to avoid being a source of information that thieves can use to steal participant's identities.

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I recently read an article about a company wellness program that consisted primarily of a company health fair.  At the health fair, an employee who thought he was otherwise healthy took a PSA test and discovered he had elevated PSA levels.  He was encouraged to follow up with his doctor, who discovered he had prostate cancer.  He was ultimately cured and his doctor said he probably would have died had it not been for the health fair screening. 

That's a great human interest story and certainly lends some encouragement to companies considering instituting some type of wellness program.  Of course, wellness programs can also be a pain to implement.  Last week I had the opportunity to present a seminar on the legal requirements of wellness programs and identified many important issues, like discrimination and privacy concerns, which would seem to discourage implementation of wellness programs. 

However, taking this story at face value, had the employee not been screened and simply developed full prostate cancer, the health plan costs to treat that cancer would likely have been higher than the treatment to cure the employee with the cancer caught early.  So there could arguably be some savings there.  Plus, over the longer run, statistics seem to support the conclusion that wellness programs decrease overall claims experience for health plans.  But they have to be done right and they have to be done legally (so as to avoid the unexpected costs associated with defending them later).

So consider adding a wellness component to your welfare plan.  But make sure to consult with your benefit professionals as you build the program so your plan does more good than bad.

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Insurance coverage can be a confusing thing.  Coverage for employee benefit plan fiduciaries sometimes adds a wrinkle to the process that can be overlooked.  Depending on the type of claim asserted, there are a variety of "coverage" options that may apply.  I think the new fee disclosure rules are likely to increase claims for breach of fiduciary duty in the future, but even without that development, it makes sense to at least know whether you have coverage and what your options are.  So let's take a look at some of the options.

• The ERISA Bond.  Generally, plan's have to have an ERISA bond that applies to anyone who handles plan assets.  The presumption is that handling the assets equates to "discretionary authority" which is the hallmark of fiduciary status.  The bond can be very narrow (covering only fiduciaries and employees) or broad (extending to vendors and person who do not necessarily handle plan assets), but the bond will only provide protection for claims for "fraud and dishonesty."  It does not generally provide insurance coverage for other claims, particularly claims for breach of fiduciary duty not involving fraud or dishonesty.
• Fiduciary Liability Insurance.  Unlike a bond, Fiduciary Liability coverage pays for claims arising out of the administration of a benefit plan without requiring "fraud" or "dishonesty."  Often it is combined with Employee Benefits Liability Coverage.  This type of coverage is designed to insure fiduciaries acting specifically in their capacity as benefit plan fiduciaries which include claims for breach of duty or mistake in administration of the plan.  Some policies can even be expanded to include coverage for penalties and fines (for a price). 
• Directors and Officers Liability Insurance. D&O policies generally provider coverage for directors and officers of a company in the event they are sued in conjunction with the performance of their official duties as they relate to the company.  But many D&O policies exclude claims arising from administration of benefit plans.  Others require a specific rider that includes employee benefits coverage (likely for an additional premium).  Don't assume that because you have a D&O policy that it automatically provides coverage for claims arising from plan administration. 
• Errors and Omissions Insurance. E&O polices rarely provide coverage for ERISA claims (unless the company with the coverage happens to be in the business of providing service to ERISA plans).  Unless specifically included in an E&O policy, this coverage will not likely protect a fiduciary from a claim arising from administration of a benefit plan.
• Employment Practices Liability Insurance.  EPLI coverage is typically bundled with D&O coverage and generally insures against claims that allege misconduct by the officers of a company in an employment setting.  These claims are typically for things like harassment, discrimination and wrongful discharge.  EPLI coverage does not typically provide protection against claims arising from plan administration unless specifically included (usually with a rider and usually for an extra premium).

Why be concerned?  Frequently I find myself in a position of defending a fiduciary (or an officer or owner of a company alleged to be a fiduciary) who finds him or herself in a position of being "uninsured."  They assume that their general commercial liability policy or D&O policy covers them for ERISA claims, only to find out the carrier has denied coverage.  Depending on the nature of the claim, the size of the claim or the breach alleged, ERISA claims can be very expensive to defend and can result in some hefty damages. 

Of course, insurance is not free and balancing the cost of coverage versus the risk of exposure is a business decision that plan sponsors and fiduciaries have to evaluate on their own.  I certainly recommend that anyone in a fiduciary position have coverage, but it is not required.  However, I do think it is very important for you to check to see if you do or do not have coverage for employee benefit claims.  Look at your policies to see whether or not you have coverage.  If you don't have coverage, maybe you should look at the cost of adding it.  But better to know now whether or not you do than to be surprised later to find out you don't.  And ask if you are not sure.

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Still wondering about how to report health coverage on W-2s, which is required by PPACA?  More guidance was issued on January 3, 2012 in IRS Notice 2012-9.  Under the new rules, employers must report the aggregate cost of "applicable employer-sponsored coverage," which generally consists of employer-sponsored coverage under a group health plan (insured or self-funded) that is excludable from the employee's gross income. The reportable cost generally includes the portion of the cost paid by the employer and the amount paid by the employee, regardless of whether paid through pre-tax or after-tax contributions.

Under this most recent guidance, the good news is that the reporting requirement appears to be suspended for employers with fewer than 250 W-2s issued for the prior calendar year.   It also appears that reporting requirements do not apply to coverage under a flexible spending arrangement if contributions occur only through employee salary reductions.  Also, for dental and vision plans, it appears that the standard for determining whether coverage under a dental plan or vision plan is subject to the reporting requirement is whether the benefits are offered under a separate policy, certificate or contract or insurance, or if the participants have the right not to elect the dental or vision benefits and if they do they must pay an additional premium or contribution.

Fortunately, the notice also includes some new Q&A's not contained in Notice 2011-28.   These Q&As include explanations about employee assistance program, wellness program or on site-medical clinic and also provide guidance about contributions to multiemployer plans.  The Notice also provides that this guidance is applicable starting with 2012 W-2s.  So your 2103 W-2s will have to comply with these rules.  But employers should definitely review both of these notices sooner rather than later and make sure they are prepared to make appropriate reportings come January 2013.

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According to a Towers Watson survey, only 26% of retirement plan administrators regularly conduct operational and compliance reviews of their plans.  The survey interviewed 245 executives and found that while most are concerned about plan compliance, apparently very few are doing anything about it.  Oddly, 62% said they would conduct a review if their plan advisors identified potential risks and 49% say they would conduct a review if they received notice of an IRS audit.  But few do it on their own.  So consider this identification of "potential risks."

I happened to give a talk today about fiduciary duties and Section 404 of ERISA.  I stressed to the group the importance of knowing about your fiduciary status, and also the importance of satisfying your fiduciary obligations.  That necessarily includes making sure your plan is in compliance with all statutory and regulatory obligations.  Given the vast array of benefit plan litigation in the courts these days, and the focus on fees, disclosures and reporting, it seems only logical that a good starting point would be to review your policies and procedures concerning plan administration and make sure they comply with the actual terms of your plans.

One of the first question the IRS asks when conducting plan audits is "are your plan's operations based on the terms of the plan document?"  Do you know if it is?  You should.  It is the start of a new year and budgets have been renewed.  So now is the perfect time to resolve to audit your benefit plans for operational and compliance problems.  Here are some starting points to consider:

1. When was the last time you updated plan documents?
2. When was the last time you reviewed the definitions in your plan documents?
3. When was the last time you verified your definition of eligibility in your plans?
4. When was the last time you compared investment options in your retirement plan?

If the answer to any of these questions is "I don't have any idea," then resolve to make 2012 your year to conduct a review of your plans.  Collect review and repair as needed, and let your attorney at Fox Rothschild know if we can help.

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Although it is probably not high on the list of priorities for plan administrators, the end of a calendar year usually means means the start of the process of preparing 5500s.  They may not be due right away, but it is always good to know what information you will have to provide when you eventually file them.  The EBSA has made an informational copy of the 2011 5500 available, with instructions, on its website.

Make sure you take a look at the "Changes to Note" section in the instructions to see how 2011 differs from prior years.  Also, remember that you have 7 months from the end of the plan year to make a filing (unless you request an extension).  And finally, make sure you read very carefully to make sure you know whether or not you have to file for your specific plans. 

I also like this site because it gives samples of older forms and instructions just in case you may have forgotten to make a required filing and are looking to voluntarily correct that failure. If you have any questions about filing requirements for 2011 or any prior year, don't hesitate to reach out to your benefits professionals, including your attorney at Fox Rothschild.

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Picking plan investments can be a difficult task.  Chances are your investment strategy will not maximize returns to a plan because, statistically, in any given time frame, there was some investment option that outperformed your investment choices.  Of course this leads to problems for plan sponsors faced with claims of breach of fiduciary duty under ERISA 404, particularly in light of the obligation to sufficiently diversify plan assets and to try to maximize returns to participants.

Recently, the 4th Circuit decided Plasterer's Local Union No. 96 Pension Plan v. Pepper, which happens to be a case about a multiemployer plan, but it also has some significant implications for single employer retirement plans.  The new trustees sued to old trustees for breach of fiduciary duty claiming the old trustees failed to properly investigate alternative investment strategies.  The Court agreed but the issue of damages was key to the ultimate decision.  Some key points that I find relevant to plan sponsors (and trustees):

1. The expert used determined that from 2003 to 2005, the optimum investment strategy for the fund would have been 50% of the assets in an equity index and the other 50% in an aggregate bond index.  Hindsight being what it is, I wonder if most plans wish they had gone that route.
2. There must be a causal link between the breach of duty and the losses to the plan.  A breach does not automatically equate to liability and damages.  There has to be a connection where the breach caused the loss.
3. When assessing damages for a breach, the measure of damages would be those damages actually caused by the totality of the breach, not just a haphazard measurement window. 

Point three is key to defending plan investment decisions because plan participants usually want to pick out a finite window (in this case 2003-2005) and show how they would have made more money investing in something else.  But the Court said you can't pick a measurement period out of the air.  In this case, had they used 1999 to 2005 as a measuring period, there would have been almost not actual damage to the plan.  So there has to be some logical connection between the alleged breach and the time period measured for the damages.

I also think point two is significant because it reminds us that ERISA 404 is not an absolute penalty statute.  In many ways, it encourages fiduciary compliance by setting out a standard for fiduciaries to meet and, as long as they do so in good faith and to the best of their ability, they will not be liable unless there is actual damage associated with an actual breach.  The market ebbs and flows and plan assets can rise and fall.  Fiduciaries who satisfy their 404 duties can sleep somewhat more soundly knowing that just because there might have been an investment option with higher returns, they will not automatically have to make up the difference because they did not choose it.

Of course all of this assumes you are following the rules and satisfying your 404 duties.  So if you are a plan fiduciary that has concerns about what those duties are and how you to satisfy them (and how to document you satisfied them), this decision should also be a wake up call that there is personal liability and while measuring damages may be tricky, you can still be on the hook for them.  Make sure you have sound guidance from your professionals to rely on.

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Employer gifts may not be part of your "benefit" plans per se, but the IRS does have rules about fringe benefits.  IRS Publication 15-B provides employers with a good explanation for how to handle taxation of fringe benefits generally.  But what about year-end "gifts?"  How are they treated?

Since it is year-end, it is not uncommon for employer to provide "gifts" to employees for a job well done, or for sticking through another tough year.  Either way, employers should remember that gift giving has its limits and the IRS is watching.  The IRS regards some gifts as taxable income for the recipient.  Clearly there is a distinction between whether a gift is given from an individual or from an "employer."  The IRS is more concerned with the latter, so let's consider some of the options.

The IRS considers any cash given from an employer to an employee as compensation.  If an employer gives an employee cash and the cash comes fro the company (not a personal gift from, say,  attorney to legal assistant), it must be treated as compensation and reported for tax purposes.  Gift cards are the same as cash.  They are subject to FICA the same way that any other pay would be treated.  However, the IRS does not consider small non-cash gifts to employees as taxable compensation.  The IRS (on its website for "de-minimus fringe benefits") provides that holiday gifts, as well as things like flowers, fruit and books are not subject to taxation.  But any gift that has a value in excess of $100 is outside of this exception so an employer must report the value of the gift on W-2s and do appropriate withholdings. 

Note: cash gifts, gift certificate and gift cards, regardless of the size, are taxable.  There is no de-minimus exception for cash and cash equivalents.

So cash is taxable, gift card and gift certificates are taxable, small gifts are probably not, but what about the holiday party?  The good news is that the IRS does not consider a company paid holiday party to be a form of taxable compensation provided they are "reasonable."  A year-end trip to the Bahamas might be hard to justify, but dinner at the local steak joint is not going to be an issue.  If you are going to give "gifts" to employees during the holidays, make sure you know the rules and treat them correctly.

And as a side note for employers that have collective bargaining agreements, make sure to check the restrictions in that agreement before giving gifts.  If you give a gift that is taxable as compensation by the IRS, it might be treated as compensation for which contributions are due to benefit plans covering the union employees.  Many disputes have arisen over whether to treat "gifts" as "compensation" for contribution purposes so make sure you know what you are getting in to before giving those gifts. 

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I frequently get asked about paying for a separated employee's COBRA coverage as a partial severance benefit.  Not altogether an unappealing option, but you have to be careful about how you word and administer it.  Unfortunately, many employers think that the solution is just to leave someone on their coverage until the end of the severance period.  But that messes up the COBRA rules and potentially creates a situation where an ex-employee is entitled to COBRA for a full 18 months AFTER the severance period.

The key is to understand what you want to accomplish.  Do you want the employee to remain on your payroll and covered as an employee as part of the settlement?   Or do you want to terminate them and reimburse them for COBRA?  Each would be accomplished in a different fashion.  Say you are giving someone three months of "additional" coverage and pay.  If the severance agreement leaves them on your payroll for three months and then terminates them, the COBRA qualifying event would be the date you actually terminated their employment.

If you want to terminate them as of a date certain, say 12/31, then give them 3 months of coverage as a severance benefits, you have to be careful because their COBRA qualifying event date is their date of termination (12/31).  If you give them 3 months of additional coverage after that, then send them a COBRA notice, they get 18 more months for a total of 21.  Plus, you have the problem of not providing a timely notice of a qualifying event and election option.  You would hate to be sued for not giving notice because you were being nice.

Instead, I have suggested that the appropriate way to handle it is to provide that in the event the ex-employee elects COBRA, the company, as part of the severance benefit, will reimburse the employee for the COBRA premium paid for a period of up to 3 months.  The COBRA time periods for notice and election run as would normally be required and the premium reimbursement is treated as a severance payment for tax purposes.  18 months of COBRA runs from the 12/31 termination date, but the company reimburses the employee for 3 months of premiums.  Some people even suggest grossing up the reimbursement for taxes so there is full premium reimbursement, which is an option.  But it has to be reported as compensation as well.

Option two is definitely preferred for insured plans.  You don't want to have your insurance company question why they are covering employees not actively at work because they were fired.  Plus they won't be happy about the extra 3 months of continuation coverage.  For self-insured plans, you have some more latitude, but you have to be wary of Section 105(h) non-discrimination rules (if you only offer it to highly compensated employees).  Plus you might run afoul of your stop-loss coverage if you are keeping people on the plan that should not really be eligible.  So you may end up truly self-insuring the full amount of the risk.

So the point is that paying for COBRA as part of a severance package can be done, but it has benefits and tax implications that should be fully understood before releases are drafted and signed.  Just "agreeing to continue benefits" is too broad of a statement and you should make sure you lay it out clearly and completely to avoid future fights.  As always, consult, before you act and you will be glad you did in the end. 

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Rumors continue to swirl that the DOL is increasing its audits of 401(k) plans.  In previous posts, I talked about the DOL audit program and the audit letters sent to plan sponsors.  However, a diligent plan sponsor would want to be prepared for an audit, even while hoping it never comes.  Plus, preparing for a possible audit provides the opportunity to self-police your 401(k) plan to see if there are any "action items" that need to be addressed. 

A DOL 401(k) audit can be triggered by an employee complaint or even information you have submitted in your retirement plan’s annual Form 5500 filing.  Of course, it can be totally random as well.  So what should you have available for inspection if the audit requests comes along?  Here is a list of the most common documentation requests from the DOL:

1. The Plan document and all plan amendments
2. Summary plan description
3. An Investment policy statement
4. A copy of the most recent IRS determination letter
5. Copies of Forms 5500
6. All plan notices. communications and meeting minutes
7. Investment analysis and reports
8. Discrimination testing results
9. Account statements for participants and beneficiaries and Contribution reports
10. Loan applications and repayment schedules

Opinions may vary about how much documentation to keep, but the general rule is that you should retain  at least 6 years worth of information.  I recommend keeping it for as long as you can and with the constant improvement of electronic storage mechanisms, I believe best practices can dictate scanning and retaining plan information for even longer periods.  Better to have the information somewhere than to try to explain its destruction later, particular plan documents, summary plan descriptions and regulatory filings.

One of the most common errors identified by the DOL is a failure by the sponsor to have actual signed documents.  Also, it is common for plans to have an incomplete record of amendments.  Investment policy statements are also a big red flag, so not having one can certainly have a negative impact on the audit process.  I have also discovered that plan's with lax loan documentation procedures and repayment schedules can have a more difficult time completing the audit process. 

So while we all hope we are not audited, the best practices are to be prepared that one might occur.  Look over your documentation and practices now and make sure you have everything in place just in case.  And if you have concerns about what you have (or don't have), contact your benefit professionals to get it cleaned up.

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I recently read an article that suggested that 49% of employees surveyed anticipated that portions of their benefit packages would be eliminated or reduced in 2012.  Kind of a bleak outlook, but if that is true, then it also suggests that a lot of employers are going to undertake to change their benefit plan structures over the next year.  And with change, comes potential problems because you might not be able to just cut benefits.  You have to know (and follow) the correct process.

Earlier, I mentioned ERISA Section 206(d) that acts as the "anti-cutback" rule for some benefit plans.  There are also a number of court cases that deal with "vesting" rights related to retirement plans as well as welfare plans.  And there are a number of regulations and cases related to disclosure and retaining the right to amend and terminate benefit plans.  In sum, it is not simply a matter of declaring a change.  You have to know the process specific to the plan of benefits you are looking to change, and also what parts of the required process might be missing from your plan. 

Amendment and termination can be very problematic, both from an implementation perspective, but also from a "results" standpoint.  Something as simple as a change in eligibility requirements can cause discrimination testing concerns or "partial termination" concerns, depending on the size and nature of the plan.  Of course, there could always be collective bargaining issues if you have a union in your company.  There could be administration issues related to notices, communications and elections for the new (or revised) plan design.  And there could be distribution concerns as well as administrative reporting and termination filing requirements that are triggered.

The point is that if you are contemplating a change to your benefit plans, it is important to know what your plan requires to make changes, how the rules and regulations control those changes and the impact the proposed changes will have going forward.  Each of these items should be fully vetted with your benefits professionals BEFORE making the change.  If you have questions about how to make changes, you can always contact your attorney at Fox Rothschild.

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Plan administrators have to be careful about making sure they pay the correct beneficiaries and pay the correct amount.  Even if the plan makes a good faith distribution to someone they think is entitled to the benefits, the plan may still be obligated to make the payment to the participant again, result in the plan paying twice.  Such was the case in Milgram v. Orthopedic Associates Defined Contribution Pension Plan, a recent 2nd Circuit decision. 

Factually what happened was that Milgram got divorced in 1996 and, under QDRO, his wife was to receive a distribution.  As a result of an administrative error, the plan overpaid the ex-wife about $770,000.  When Milgram went to withdraw his account balance from the plan later, the error was discovered.  The plan sued the ex-wife to recoup the overpayment, and Milgram sued the plan to recover his full distribution.  The plan's case against the ex-wife has not concluded or resulted in any settlement.  The plan's defense to Milgram's claim was that until the ex-wife pays the money back, they can't pay the money to Milgram.  The court saw it differently.

The court reasoned that a profit-sharing plan must pay plan assets it owes to Milgram in full regardless of whether the ex-spouse first repays the plan the excess amount.  The plan had argued that ERISA's anti-alienation provision precluded the plan from using plan assets to pay Milgram because they were technically assets of other participants.  In short, the money did not belong to the plan and taking it away from the plan would result in alienation of other participant's benefits. 

The court disagreed and held that  ERISA's anti-alienation provision that precludes the assignment of "benefits provided under the plan" did not apply because undistributed funds held in a defined contribution plan trust for participants do not constitute "benefits" within the meaning of ERISA Section 206(d)(1) (the "anti-alienation" provision).  In other words, Section 206(d)(1) does not prevent pension plan assets from being used to satisfy a judicial judgment against the plan itself.  Thus, Milgram was entitled to his full correct account balance from the plan even though the plan had not yet received the money back from the ex-wife.  The judgment was against the plan itself which has assets.

The problem is that the court did not address what claims the remaining participants might have against the plan for having to pay its assets out to Milgram.  Maybe they would have their own claims for breach of fiduciary duty against the plan administrator.  If the plan never gets the money back from the ex-wife, their accounts will certainly suffer a loss.  So it leaves plan administrators with this warning: double check your payments to make sure they are in the correct amount and going to the right place.  You cannot always rely on the assertion that the plan assets belong to other participants.     

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Concerned about the uniform benefit summaries due March 23, 2012?  Under PPACA, plans and insurers are required to furnish participants with a very abbreviated summary of benefits and coverage. This summer, proposed regulations on this requirement, were issued and some sample templates were released.  The DOL recently released some FAQs that provide that plans and insurers will not be required to distribute the summaries until final regulations are issued. The departments expect the final regulations to give plans and insurers sufficient time to comply with the final rules after they are published.  So, for now at least, it looks like the requirements to distribute these summaries is on hold.  Stay tuned.

In other news, the EBSA has created a new consumer assistance webpage (also available in Spanish) that allows users to submit questions and complaints about plans electronically.  The webpage also provides access to basic information relating to health and retirement benefit plans through several links under the following categories: Resources/Tools, Hot Topics, and Publications.  The topics covered include health plan issues such as COBRA eligibility, HIPAA special enrollment rights, and health care reform requirements and retirement plan matters such as filing a claim for benefits and understanding fees and expenses in 401(k) plans, all very hot topics.  Plan sponsors would do well to check it out for assistance in administering their plans.

Finally, HHS has issued information about its new Privacy and Security Audit Program.  This program will apply only to HIPAA-covered entities.  All audits conducted during this initial pilot period will include a site visit and result in a formal report.  Covered entities selected for audit will receive a notification letter approximately 30 to 90 days prior to the site visit.  If you receive one of these audit letters, make sure to respond and let your plan professionals know you have been selected. 

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As a follow up to last week's entry about the Supreme Court taking on the PPACA cases, today the Supreme Court determined to hear three separate cases on the constitutionality of PPACA.  The Court also  set aside 5 1/2 hours for oral argument, to be held in March.  However, the Court, did not grant all of the issues raised and it chose issues to review only from three of the five separate appeals before it.

The Court will hold two hours of argument on the constitutionality of the requirement that virtually every American obtain health insurance by 2014, 90 minutes on whether some or all of the overall law must fail if the mandate is struck down, one hour on whether the Anti-Injunction Act bars some or all of the challenges to the insurance mandate, and one hour on the constitutionality of the expansion of the Medicaid program for the poor and disabled.  Rather than hear all issues, the Court chose those issues from appeals by the federal government, by 26 states, and by a business trade group.  It opted not to review the challenges to new health care coverage requirements for public and private employers.

The blog of the US Supreme Court reports that the Court's order does the following:

• Determined to hear the issue of “severability” of the insurance mandate from the other provisions of the law, if the mandate is nullified
• Determined to hear arguments on the constitutionality of the insurance mandate
• Directed the Parties to brief and argue whether the lawsuit brought by the states to the insurance mandate is barred by the Anti-Injunction Act (
• Determined to hear the constitutionality of the Medicaid expansion

Supreme Court observers suggest that this may be a modern record for the amount of time set aside for oral arguments.  Due to the complexity of the issues presented, it is not a surprise that the Court has allotted this much time to argument, and it is also suggested that a decision could be rendered as early as June of 2012, which could significantly impact the upcoming presidential election.

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