Tuesday, July 22, 2014

You may have heard about the potentially crippling blow to ACAMoney Puzzle (as some have described) dealt by a three-judge panel of the D.C. Circuit Court of Appeals today in Halbig v. Burwell.  Basically, a group of individuals and employers challenged the IRS rule that allowed tax credits to help pay for individual coverage through federally-run ACA marketplaces.  Their argument was that the literal reading of the statute only allowed these subsidies for individual policies purchased through state-run marketplaces.

At first blush, this might not sound all that important to employers, but it very well could be.  If this ruling holds, then it would undercut the ability of the IRS to impose the employer shared responsibility/“play or pay” penalties.

Recall that one triggering event for an employer to be hit with the play or pay penalty is that an employee receives a tax credit for coverage purchased through a marketplace.  As this website shows, only 14 states have established their own marketplaces, with one (Oregon) who had one reportedly moving to the federal marketplace next year.  (State partnership marketplaces are treated as federal marketplaces for purposes of the tax credits.)  If tax credits are not available through the federally-run marketplace, then that would significantly reduce the potential risk of employer penalties.

What about employers who have employees in multiple states with different types of marketplaces?  Should Halbig stand, that question is difficult to answer.  It would be up to the IRS to interpret how that would work, but it seems plausible that the IRS would say the full penalty amounts would still apply, even if only employees in states with state-run marketplaces can trigger them.

For now, the implications are minimal as nothing is likely to happen yet.  The Fourth Circuit Court of Appeals issued a contrary ruling in King v. Burwell shortly after Halbig was released.  The full D.C. Circuit could overturn Halbig or one or both of King and Halbig could go before the Supreme Court.  Until the difference is resolved, employers would be well-advised to pay attention to these cases, but continue any preparation for compliance with the employer shared responsibility provisions.

Monday, July 21, 2014

In the scheme of things, it was not that  long ago that defined benefit pension plans were the main retirement plan game in town.  But now – for better or for worse – 401(k) plans rule in the private arena.  […]

Friday, July 18, 2014

Late yesterday, the DOL released an FAQ in response to the Hobby Lobby decision. Basically, the FAQ said that an elimination of any contraceptives from coverage under a plan is a considered a “material reduction” in covered benefits triggering the […]

Thursday, July 17, 2014

On June 25, 2014, a unanimous United States Supreme Court weighed in on the legal standards applicable in stock drop cases in Fifth Third Bancorp v. Dudenhoeffer. Facts. Beginning in 2007, Fifth Third Bank began experiencing a large number of […]

Wednesday, July 16, 2014

Frequent internet users are likely familiar with the demotivational posters at, such as this one on retirement.  If a recent study by a partner at the Mercer consulting firm is to be believed, then they should perhaps add another […]

Monday, July 14, 2014

Unless you’ve been hiking Mount Kilimanjaro for the last month, you’ve no doubt heard about Speaker Boehner’s proposed lawsuit against the President.  The Speaker, and apparently many House Republicans, are upset that the President has not, in their view, upheld […]

Wednesday, July 9, 2014

Following a spate of district court cases in response to United States v. Windsor, 133 S. Ct. 2675 (2013), some same-sex surviving spouses are asking retirement plan sponsors to review previously denied death benefit claims.  Among them has emerged Passaro […]

Monday, July 7, 2014

You’ve seen all the headlines…  Supreme Court issued its decision in the Hobby Lobby case on the last day of its 2013-2014 term.  Sure, maybe it wasn’t as closely watched and groundbreaking as the Court’s -2012 decision upholding key provisions […]

Thursday, July 3, 2014

The Office of Civil Rights (“OCR”) of the U.S. Department of Health and Human Services (“HHS”) is required to conduct periodic audits of compliance with the Privacy, Security and Breach Notification Rules under the Health Insurance Portability and Accountability Act […]

Wednesday, July 2, 2014

Separation agreements almost always contain release provisions whereby one or both parties agree to waive claims that they may have against the other party; when the employee releases claims, he or she typically gains compensation or a benefit that he […]