Welfare Benefit Plan ERISA News & Views
July 2011

ERISAPros' Kearse Quoted in Workforce Magazine

In a unanimous decision, The US Supreme Court reversed a lower court's opinion and a long-standing precedent that the SPD would control over the Plan Document in the event of a conflict between the two documents. The SPD, an easy-reading summary of the Plan Document, must be clear, unambiguous, and consistent with the Plan Document. Participants must receive an SPD, whereas the Plan Document must be provided only if the employee asks for it. Most employees are not even aware of its existence. Kearse said in the interview that a good SPD "will point out exceptions and tell the plan participant to go to the Plan Document for more information." (Alfano v. CIGNA)

Blue Shield California to Refund $167 Million
In an unprecedented move to voluntarily cap its profits at 2%, the California insurer plans to credit individual policyholders from $25 to $415 and employers from $110 to $130 per employee. Blue Shield of California hopes to improve its public image, attract new business, and preempt a forced rebate under healthcare reform's medical loss ratio (MLR) requirements. The Washington Post

This good news is not without some potentially expensive consequences to employers offering health benefits. ERISA provides a small plan exemption (<100 participating employees on the first day of the plan year) from filing Form 5500 to employers that distribute a "Refund Allocation Policy" to its participants upon entering the plan. (CFR ยง2520.104-20 (b) (3) (ii)) The policy explains how insurer refunds, if any, will be allocated to participants. However, most employers do not provide employees with an ERISA compliant SPD-the most likely place to find such a provision. Consequently, those employers do not qualify for the small plan exemption and should be filing Form 5500. They could be subject to DOL penalties up to $1,100 per day for not doing so.

29 States have Enacted Legislation to
Implement ACA
The National Conference of State Legislators (NCSL) has published a comprehensive online state legislative database covering a variety of Healthcare Reform issues and topics.

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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.


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