Changes to 401(k), ERISA, and Health Care Plans in 2012: Are You Ready?

2012 is right around the corner, and with it a number of federally mandated revisions to employee benefits plans. For your reference, here’s a roundup of legal updates on expected 2012 changes to ERISA, 401(k), and health care plans:

On ERISA plan disclosures…

•  Service Providers to ERISA Plans: DOL’s New Disclosure Regulations Are Imminent—Are You Ready? (Morgan Lewis)

“According to Department of Labor officials, the agency will soon publish a “final” final regulation on required disclosures by plan service providers under the statutory prohibited transaction exemption provided by the Employee Retirement Income Security Act of 1974. This makes it a good time for plan service providers (such as investment advisers, broker-dealers, banks, insurance companies, and recordkeepers) and plan fiduciaries to assess where they are in their efforts to comply with the new disclosure rules.” Read more»

•  DOL Service Provider Fee Disclosure Regulations To Go Into Effect in Early 2012 (Franczek Radelet P.C.)

“… if a service provider does not provide all of the required disclosures, then the service arrangement will no longer be considered “reasonable” under ERISA’s prohibited transaction rules, and a prohibited transaction will arise. Plan fiduciaries who do not receive all of the required disclosures from a service provider are protected from liability for this type of prohibited transaction as long as the plan fiduciaries meet the requirements of a new prohibited transaction exemption.” Read more»

On health care plans…

•  Group Health Plans: Year-End Action Items, Upcoming Changes (Morgan Lewis)

“Plan sponsors of grandfathered plans must assess whether 2012 plan design changes will impact the plans’ grandfathered status. For example, grandfathered plan status is lost if any increase is made to the percentage of cost sharing borne by a participant or if a co-pay increases by more than $5 (from the co-pay in place when healthcare reform was enacted, not from the prior year). If grandfathered plan status is lost, significant plan changes may be required to comply with non-grandfathered plan healthcare reform provisions.” Read more»

•  Begin Preparing for W-2 Reporting of Employer-Sponsored Health Coverage (Katten Muchin Rosenman LLP)

“One of the many changes brought by health care reform requires employers to report the value of employer-sponsored health coverage on employees’ W-2s. For many employers, this change will first take effect with respect to health coverage provided to employees during 2012… Addressing this change now allows employers to proactively prepare their systems to track the requisite data that will be needed to issue accurate W-2s in 2013.” Read more»

On 401(k) fee disclosures…

•  U.S. 401(k) Disclosure Is Coming – What To Do In January (Osler, Hoskin & Harcourt LLP)

“… many plan sponsors, as the Department of Labor hoped, have been taking a closer look at their investment options and fees in advance of the deadline for initial disclosures and taking more direct action to prepare and control what must be disclosed. According to the article, plan sponsors have been cutting back on the number of mutual fund offerings and trying to lower their fees by seeking lower fee solutions.” Read more»

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See also: 

•  Compliance Update: What’s Required By Year-End? (Fisher & Phillips LLP)

•  Tax-Qualified Retirement Plans: Amendments and Other Year-End Action Items (Morgan Lewis)

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