Welcome back for this month’s edition of the Bubbler!  There’s plenty to talk about, so let’s jump right in.

The California Supreme Court issued an important decision this week addressing the test for whether a worker is an independent contractor or an employee.  The U.S. Supreme Court declined to review a Seventh Circuit decision upholding an employer’s rule that a months-long leave of absence was not a reasonable accommodation. The Ninth Circuit held that employers are prohibited from using an employee’s past salary as a legitimate “factor other than sex” for purposes of defeating a Fair Pay Act claim, emphasizing that allowing the inclusion of prior salaries would only perpetuate gender pay disparity. The Fifth Circuit downsized ERISA fiduciary standards in a ruling that invalidated a set of seven expansive fiduciary rules. The Northern District of Illinois issued an unusual ruling, holding that two plaintiffs’ claims were subject to an enforceable arbitration agreement, yet refused to compel arbitration. The DOJ challenged a set of competitors’ no-poaching agreements as per se violations of the Sherman Act, which regulates concerted anti-competitive action. Finally, in the wake of the #MeToo movement, New York (state and city) have passed new laws concerning workplace sexual harassment.

As always, stay tuned for more employment matters updates!

What’s a financial advisor to do? On March 15, 2018, the Fifth Circuit Court of Appeals in Chamber of Commerce of the U.S. v. U.S. Dep’t. of Labor, No. 17-10238, 2018 U.S. App. LEXIS 6472 (5th Cir. Mar. 15, 2018) vacated – thereby invalidating – a series of seven rules (which we collectively refer to in this post as the “fiduciary rule”) issued in April 2016 by the Department of Labor (DOL). The fiduciary rule vastly expanded the reach of the ERISA fiduciary standards that apply to individuals and entities providing investment advice. This post first explains the state of the law prior to the fiduciary rule; it then discusses the impact of the rule on the arguments that the Court grappled with; and it concludes by handicapping the options available to regulated financial advisors and institutions as they endeavor to respond.

Continue Reading Fifth Circuit Court of Appeals Invalidates the 2016 Final Department of Labor Fiduciary Rule and Related Prohibited Transaction Exemptions

In advance of issuing the Executive Order that culminated in the promulgation by the Department of Labor of proposed regulations expanding the availability of Association Health Plans, President Trump announced that one of the purposes of the order was to allow people to buy health insurance “across state lines.” This post examines the consequences of, the obstacles to, and the inevitable clashes occasioned by, the interstate insurance sales of group health insurance.

Continue Reading Association Health Plans and the Sale of Group Health Insurance “Across State Lines”

Recently proposed Department of Labor (Department) regulations governing Association Health Plans (AHPs) would, if made final, permit small employers to be regulated under more favorable, large group rules. The proposed regulations modify the rules governing fully-insured AHPs; they do not change the way that self-funded AHPs are regulated. But in the preamble to the proposal, the Department invites comments on whether the standards that govern fully-insured AHPs should be extended to self-funded AHPs. Such an extension would be a step into unchartered regulatory territory—which is the topic of this post.

Continue Reading Association Health Plans: Self-Funded vs. Fully-Insured

On April 2, 2018, significant changes to ERISA’s disability claims procedures will take effect. These new rules will require all ERISA-covered plans which provide disability benefits to make significant modifications to the way disability benefit claims are reviewed and decided. This post describes what is changing and why, and the steps employers must take now to ensure compliance.

Continue Reading No More Delays! New Disability Claims Rules to Take Effect April 2, Says DOL

Happy New Year! It’s that time when we all vow to better ourselves in the months ahead. Resolutions abound, and they need not be limited to individual self-improvement. Employers too have many opportunities for betterment in the New Year. In the area of employee benefits, we offer these four goals for 2018.

Continue Reading New Year’s Resolution #5: Four Employee Benefits Resolutions for 2018!

Tis the season . . . for ERISA disclosure requirements, of course!  Between open enrollment and the calendar year end, the list of documents, notices and updates required under ERISA looms large and annoying.

In these trying months of increased administrative hassle, many employer turn to electronic distribution in order to be environmentally forward, administratively efficient, and cost effective, and respond to wishes of employees who, let’s face it, don’t want (and won’t read) a big pile of paper.  But while electronic distribution is sound business practice, employers should keep in mind that there are rules to follow, at least with respect to ERISA notices.

This article contains a helpful guide to these rules, as well as some helpful steps employers can take to comply.  Note that the article was written shortly before the last presidential election, and while the rules have not changed, some of the author’s predictions about the proliferation of Affordable Care Act audits were based on incorrect assumptions about the election outcome and haven’t exactly come to pass.  Ahem.

On October 13th, President Trump signed an Executive Order directing various federal agencies to consider how to achieve three administration health reform objectives: (1) expand access to Association Health Plans (AHPs); (2) increase the current limits on short-term health insurance; and (3) allow wider use of employer health reimbursement arrangements so employees can buy coverage on their own in the individual market. This post considers what regulatory actions are necessary to accomplish the first objective—expanded access to AHPs.

Continue Reading Expanding Association Health Plans—Which Agencies Need to do What

In recent weeks, the Trump Administration has been considering allowing health insurance to be purchased across state lines and expanding access to “Association Health Plans” (AHPs) that could take economic advantage of cross-border purchasing. President Trump is expected to issue an executive order this week to make that happen without legislation.

This post addresses the key issue of whether the administration has the authority under existing law to act on its own initiative, and in doing so, it will address the seminal legal issues affecting AHPs under federal and state law.  As explained below, we conclude that the administration has some—and perhaps even ample—authority to act without Congress, and that any legal constraints will depend on how the AHPs are structured.

Continue Reading Association Health Plans—Can The Trump Administration Expand Access Without Congress?

Mull v. Motion Picture Ind. Health Plan educates employers on the basics of the requirements of the Employee Retirement Income Security Act (ERISA) governing plan documents and summary plan descriptions. The lessons are sobering, particularly as they relate to group health plans. Although compliance with these requirements is neither difficult nor expensive, many employers nevertheless ignore them. The decision in this case might—and, in our view, should—encourage them to reconsider.

Continue Reading The Ninth Circuit Weighs in on ERISA’s Plan Document and Summary Plan Description Requirements: Mull v. Motion Picture Ind. Health Plan