The Departments of Labor and Health and Human Services, along with the Internal Revenue Service (Agencies) recently announced they will not enforce regulations promulgated in 2024 regarding the Mental Health Parity and Addiction Equity Act (MHPAEA) (2024 Final Rule), implementing changes Congress made to the MHPAEA by way of the Consolidated Appropriations Act of 2021 (CAA). The Agencies noted they will reconsider or modify the 2024 Final Rule (and potentially other guidance) and review each department’s respective enforcement approach. Before the recent change in enforcement position, the DOL, in particular, had emphasized that MHPAEA compliance was one of its top enforcement priorities.
Author: Allison S. Egan
Allison Egan litigates complex disputes brought under ERISA. She defends plan sponsors, boards of directors, shareholders, trustees and service providers in ERISA matters involving fiduciary breach and prohibited transaction claims and a wide range of benefit plans, including ESOPs, 401(k)/403(b) plans, defined benefit plans, health and welfare plans, and multiemployer plans.
IRS Announces Phase 2 of Pre-Examination Compliance Pilot Program
Recently, the IRS announced phase two of its expansion of the Pre-Examination Compliance Pilot Program. Under the pilot program, an employer may limit or entirely avoid an impending IRS audit if they promptly correct any identified errors via the IRS’s Self Correction Program (SCP). During phase two, the IRS will notify employers by letter that their retirement plan was selected for upcoming examination. The employer then has 90 days to review their plan’s documents and operations to determine if they meet current tax code requirements.
If the employer identifies any errors, they may self-correct the errors under the SCP. Errors that aren’t eligible for correction under the SCP can be corrected by requesting a closing agreement, and the IRS will use the favorable Voluntary Correction Program fee structure to determine the sanction amount payable.
Continue reading “IRS Announces Phase 2 of Pre-Examination Compliance Pilot Program”