EBIA Weekly Newsletter

Substantial Increase in TPA’s Compensation Exposes TPA and Employer to Potential Fiduciary Liability

   May 4, 2017

Abraha v. Colonial Parking, Inc., 2017 WL 1052558 (D.D.C. 2017) Available at https://www.gpo.gov/fdsys/pkg/USCOURTS-dcd-1_16-cv-00680/pdf/USCOURTS-dcd-1_16-cv-00680-0.pdf A federal court has allowed ERISA claims to proceed against an employer and its health plan third-party administrator (TPA) after the TPA’s fees increased dramatically due to plan administration changes. According to the complaint filed by current and former employees, … Read More

IRS Memo Considers Limit on Annual Additions When Two Employer-Aggregation Rules Apply

   May 4, 2017

Tech. Adv. Mem. 201715001 (Dec. 27, 2016) Available at https://www.irs.gov/pub/irs-wd/201715001.pdf In this technical advice memorandum (TAM), the IRS considers how the Code § 415(c) limit on annual additions is determined when two employer-aggregation rules—the controlled group rules and the affiliated service group rules—apply. As background, Code § 415(c) limits the total contributions (annual … Read More

Must Our Health Plan Cover the Pregnancy Expenses of a Participant Who Is a Surrogate?

   May 4, 2017

QUESTION: Can our company’s major medical plan exclude coverage for the pregnancy and birth-related medical expenses of participants who act as surrogates for other individuals? ANSWER: Although the federal agencies have not issued specific guidance on this issue, at least two legal hurdles may prohibit enforcement of an exclusion from coverage for the pregnancy and … Read More

IRS Information Letter Addresses HSA Ineligibility Due to Medicare Entitlement

   April 27, 2017

IRS Information Letter 2017-0003 (March 8, 2017) Available at https://www.irs.gov/pub/irs-wd/17-0003.pdf The IRS has released an information letter confirming that individuals are disqualified from establishing a health savings account (HSA) if their contributions are attributable entirely to a period when they are entitled to Medicare. The letter responds to an inquiry from an individual … Read More