When an ERISA plan delegates authority to the plan administrator to interpret the plan documents for benefit determinations, the plan administrator typically is entitled to a deferential standard of judicial review, and courts will look for abuse of discretion rather than impose a de novo standard of review. In Lyn M. v. Premera Blue Cross, – F.3d –, 2020 WL 4249129 (10th Cir. Jul 24, 2020), the U.S. Court of Appeals for the Tenth Circuit limited the deferential standard of review, holding that a de novo review applied when the plan administrator did not adequately disclose to the plan participants the instrument delegating discretionary authority to the plan administrator.
It’s hard to believe August is already here, and with 2021 annual enrollment and year-end rapidly approaching, there are a number of issues health and welfare plan sponsors should be thinking about now.
Here’s a list of some of the most important items:
- SMMs. Have you issued a summary of material modifications (SMM) for any changes you’ve made to your plan for COVID-19 testing/ treatment and for telemedicine?
- Deadline extensions. Have you talked to your vendors about the extensions the agencies created between March 1, 2020, and the end of the pandemic period (as yet unknown) for COBRA, special enrollment and claims periods? Have you added information regarding the deadline extension to any claim and appeal responses issued during the pandemic period?
- Plan amendments. Do you need to amend your plans for any of the following? (Note that many of these plan amendments are not required to be completed until 2021, but you may wish to address them sooner.)
- Increasing the health flexible spending account carryover from $500 to $550
- Allowing retroactive pre-tax deductions for special enrollments on account of birth or adoption during the pandemic period for those enrolling late under the deadline extensions
- Allowing employees to enroll, change or revoke their existing health plan elections for 2020
- Allowing employees to decrease or increase their existing dependent care and/or health flexible spending account elections for 2020
- Reflecting any plan changes as a result of furloughs (such as continuing coverage that would otherwise end)
- For a plan year or grace period ending in 2020, giving participants until 12/31/20 to incur eligible health and/or dependent care expenses
- Allowing your health flexible spending account to cover over-the-counter drugs and menstrual care products (beginning as early as 1/1/20).
- COBRA. Have you reviewed your COBRA notices for accuracy/conformance to the COBRA regulations in light of increased litigation in this area? Have you updated your COBRA notice for the new Department of Labor models published in May 2020 that address coordination of COBRA with Medicare?
- Premium refunds. Have you received any premium refunds/rebates from insurers or third-party administrators due to favorable claims experience during the pandemic? If so, are you aware of and following the fiduciary guidelines regarding such refunds?
- Wellness plans. Will employees be able to complete any biometric screenings required to obtain wellness credits? If not, do you need to make any changes to your wellness program?
- Employer Shared Responsibility. If you use the lookback measurement method, how are you treating coverage for employees who are furloughed during their stability period? How are you counting the furlough period for purposes of the measurement-period hours calculation?
If you need assistance in thinking through these issues, please contact your Faegre Drinker attorney with questions.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 changed a number of requirements for retirement plans in 2020 and beyond.
Certain changes under the SECURE Act already are in effect in 2020, including changes to the required minimum distribution rules for participants and beneficiaries, and changes to qualified automatic contribution arrangements under defined contribution plans, as discussed in more detail in our prior alert.
On July 24, 2020, President Trump signed four Executive Orders related to drug pricing that direct the Secretary of Health and Human Services (HHS) to take a number of actions aimed at lowering prescription drug prices. These HHS actions generally are not expected to apply directly to employer-sponsored group health plans. However, the Executive Order on “Lowering Prices for Patients by Eliminating Kickbacks to Middlemen” (the Order) could have an indirect impact on such plans, or provide an indication of things to come.