Texas has passed one of the strongest new laws on drug transparency—HB 2536. To learn how this law may apply to drug manufacturers, pharmacy benefit managers, and health plans, please see our recent Health Law Scan blog post: New Texas Law Mandating Drug Price Transparency Considered Among Strongest in Nation.
Congratulations to our employee benefits and executive compensation practice for being awarded Law Firm of the Year by Chambers & Partners’ Chambers USA Awards 2019. This award recognizes our preeminence in the benefits practice area, including our outstanding work and excellence in client service. For more information, please see Morgan Lewis Wins Employee Benefits & Executive Compensation Law Firm of the Year Award from Chambers USA.
Congratulations to Steven P. Johnson on his election to the Morgan Lewis partnership in our employee benefits and executive compensation practice! Effective October 1, 2019, Steve, who is resident in Washington, DC, will join 29 other newly elected partners from 12 offices and nine practices. For information about all of the firm’s newly elected partners, please see Morgan Lewis Elects 30 New Partners.
Partner Matthew Hawes was quoted in a recent Law360 article about strategies employers can use to safeguard their retirement plans against cybersecurity risks. Matt discusses how the lack of sufficient protections against cybersecurity breaches can been seen as a violation of fiduciary duty. Read the full article, 4 Tips For Handling Retirement Plans’ Cybersecurity Risks.
Partner Andy Anderson was quoted in a recent article by the Society of Human Resource Management (SHRM) on the Health Reimbursement Arrangements and Other Account-Based Group Health Plans final rule issued by the US Departments of Health and Human Services, Labor, and Treasury. Andy discusses the new excepted-benefit health reimbursement arrangement. Read the full article, New Final Rule Lets Employees Use HRAs to Buy Health Insurance.
Our ERISA litigation chairs, Jeremy Blumenfeld, Debbie Davidson, and Brian Ortelere, recently chatted with Law360 about how Morgan Lewis is handling some of the hottest areas in ERISA litigation, including retirement plan management for universities and the trend of workers' savings being steered toward proprietary investment funds. Read the full Law360 article for their insight on recent cases they’ve handled and what litigation they are watching.
The IRS continues to aggressively audit how free meals and snacks offered to employees in many workplaces are treated for federal tax purposes. Recent IRS guidance in this respect is Technical Advice Memorandum 201903017 (the TAM) published this spring. The TAM, which includes both employer-favorable and IRS-favorable provisions, is essentially the first guidance on employer-provided meals and snacks that the IRS has published in nearly two decades. (We previously discussed changes made to the on-site meal and snack deduction rules in the 2017 Tax Cuts and Jobs Act for federal income tax purposes.)
Taking cues from Colorado, Missouri, Pennsylvania, Iowa, New Jersey, and Virginia, all of which have recently enacted legislation supporting and encouraging the establishment of ESOPs, the states of Texas, Indiana, and Nebraska are now moving forward with their own pro-ESOP initiatives.
Nebraska Law Allows ESOPs to Own CPA Firms
Nebraska Legislative Bill 49 authorizes the ownership of CPA firms by ESOPs, with an ESOP allowed to own up to 49% of a firm. The bill unanimously passed final reading on February 28, and was signed into law on March 6. Most states already allow minority ESOP ownership of CPA firms. Creating more ESOPs in accounting firms is an important step toward making these critical financial advisors of business owners more aware of the important tax advantages and other byproducts (such as increased employee morale and increased employee productivity) that ESOPs create.
The US Department of Labor has been extremely active in recent years as the federal agency investigating compliance with and enforcing the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). These investigations have frequently resulted in findings of fiduciary breach and monetary recoveries for ERISA retirement plans. Please see our recent LawFlash on this topic, and reach out to the LawFlash authors or your Morgan Lewis contacts if you have additional questions.
The Internal Revenue Service (IRS) issued an important update late last month to the Employee Plans Compliance Resolution System (EPCRS) in Revenue Procedure 2019-19. The IRS provided a helpful summary of the changes. The most significant changes in the updated EPCRS, which took effect as of April 19, 2019, involved the expansion of the Self-Correction Program (SCP) to allow the correction of certain plan document and operational errors by plan amendment and to correct certain loan failures, obviating the need for plan sponsors to file Voluntary Correction Program (VCP) applications (and to pay the required user fees) for these failures.