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September 8, 2017
page 3
Additional information relating to tax relief can be found
on the IRS’s dedicated webpage,
Hurricane Harvey Information Center .Looking ahead as other hurricanes are currently brewing,
employers and plan sponsors are encouraged to monitor
the IRS and DOL websites should the need for disaster
assistance and guidance arise.
A
NOTHER
D
ELAY IN
F
IDUCIARY
R
ULE
I
MPLEMENTATION
As has been anticipated for some time, the Department
of Labor (DOL) is proposing delaying the January 1, 2018
effective date for certain aspects of fiduciary rules. On
August 31, 2017, the DOL’s Employee Benefits Security
Administration (EBSA) published
proposed regulationswhich would delay, until July 1, 2019, full implementation
of the fiduciary rule’s Best Interest Contract (BIC)
exemption, the Principal Transactions Exemption, and
certain amendments to a Prohibited Transaction
Exemption. In addition, EBSA issued a
Field Assistance Bulletin which sets forth an enforcement policy relating
to an arbitration provision in the BIC Exemption and
Principal Transaction Exemption.
For background information relating to the investment
advice rules, see the May and December 2016 editions
of our
At Issue
newsletters, and our
Benefit Beat
implementation coverage this year from the
June 13 th , April 10 th , March 3 rd ,an
d February 15 th editions.
As is currently the standard, investment advisers must
comply with the impartiality standards contained in the
fiduciary advice rules that require:
1.
Any advisement rendered by a fiduciary must be in
the best interest of the investor,
2.
The fiduciary must take no more than reasonable
compensation for such advice, and
3.
The fiduciary must avoid making materially
misleading statements.
Comments on these regulations are due by September
15, 2017. In the meantime, compliance with the
impartiality standards as described above must continue
to be maintained.
P
OSSIBLE
D
ELAY OR
A
MENDMENTS TO
E
NHANCED
D
ISABILITY
C
LAIM
R
ULES
The Department of Labor’s Employee Benefits Security
Administration (EBSA) released final rules on December
19, 2016 providing for enhanced standards for plans
that make disability determinations (see
Disability Determinations: New Enhanced Rules Are Coming(
Benefit Beat
, 1/5/17). These enhanced rules become
applicable to all claims for disability benefits filed on or
after January 1, 2018, and apply to any ERISA plan that
makes a disability determination, including short and
long term disability plans and retirement plans if such
plan makes a disability determination.
On July 20, 2017, the DOL and EBSA submitte
d notice to
the Office of Management and Budget indicating its
intent to delay or amend these final rules due to
questions of law and policy. The rationale for the delay or
amendment is not publicly available at this time. In this
interim, unless and until any amendment or delay is
formally announced or put in place, plan sponsors are
encouraged to review their current claims and appeal
procedures to ensure compliance with the expanded
rules.
O
VERTIME
R
ULES
T
HROWN
O
UT FOR
N
OW
Many will recall that modification to the Department of
Labor’s (DOL) Wage and Hour Division overtime rules
were to take effect on December 1, 2016. In large part,
these rules would have changed the salary basis on
which overtime is determined, raising it from an
equivalent of $23,660 per year to a new level equivalent
of $47,476 per year, and tying it to a regular inflationary
increase.
On the eve of its effective date, the U.S. District Court of
Eastern District of Texas granted a preliminary injunction
preventing the DOL from implementing and enforcing the
rules. Then, on December 1, 2016, the Department of
Justice (DOJ), on behalf of the DOL, filed for an appeal of
the District Court’s preliminary injunction ruling, and
subsequently filed a request for expedited briefing and
oral arguments in the Fifth Circuit Court of Appeals on the
following day. This was followed by a reply brief filed by
the DOJ with the Court on June 30, 2017. Then, just a
few days ago, on August 31, 2017, that same District
Court has thrown out the overtime rules altogether. It is
possible that an appeal could be filed, but for the
moment, the overtime rules will not take effect.
R
EVISED
M
EDICAID
/CHIP P
REMIUM
A
SSISTANCE
N
OTICE
Employers sponsoring health plans are obligated to
annually provide a premium assistance notice to their
workforce. This notification can be accomplished by
using a model notice provided by the DOL’s Employee
Benefit Security Administration (EBSA). The model
Medicaid/CHIP notice has been revised and is current as
of August 10, 2017. Following are the changes to the
revised notice, as compared to the January 31, 2017
version:
In Massachusetts and Rhode Island, the phone
numbers for the relevant agencies have changed;