This has been a busy year in the world of benefits, and there have been many noteworthy developments since the Spring 2023 edition of the newsletter. While the articles in this Summer 2023 edition cover a variety interesting and timely issues, the Newsletter format and publication timeline make it difficult for us to publish articles on every topic worthy of inclusion that are of interest to our readers. For that reason, we have highlighted below some additional issues and developments that are likely to have a lasting impact going forward. For that reason, you should not be surprised to see a more thorough article analysis on these topics in a future edition of the Newsletter.
- DOL Seeks Public Comment on SECURE 2.0 Requirements: On August 11, 2023, the U.S. Department of Labor published a wide-ranging Request for Information (“RFI”) in the Federal Register to begin developing a public record for a number of provisions of the SECURE 2.0 Act that impact ERISA’s reporting and disclosure framework. The topics covered by the RFI include pooled employer plans, emergency savings accounts, fee disclosure improvements, benchmarks for asset allocation funds, unenrolled participant requirements, and annual funding notices. The deadline to respond to the RFI is October 10.
- IRS Delays Roth Catch-Up Contribution Changes: On August 25, 2023, the Internal Revenue Service published IRS Notice 2023-62, which announced that the IRS was delaying for two years the requirement in Section 603 of the SECURE 2.0 Act that workers making $145,000 or more per year who make catch-up contributions to employer-sponsored retirement plans, like a 401(k) plan, will have to instead put that money into Roth accounts. The new requirement now takes effect on January 1, 2026. The Notice also clarified that participants over 50 years old can continue to make catch-up contributions after 2023, regardless of their income.
- Ninth Circuit Issues Third Decision in Wit v. United Behavioral Health: On August 22, 2023, a Ninth Circuit panel issued a third version of its ruling in a class action lawsuit alleging that United Behavioral Health (“UBH”) improperly denied claims for mental health benefits. Although the Ninth Circuit again concluded that the district court erred when it ordered UBH to reprocess more than 67,000 claims for mental health and substance use disorder treatment, it upheld class certification for three classes of the plaintiffs’ fiduciary breach claim alleging UBH maintained overly restrictive coverage guidelines and remanded questions about the breach of fiduciary duty allegations and plaintiffs’ responsibility to exhaust the administrative record.
- Plaintiffs File Notice of Appeal After Jury Rejects ERISA Fiduciary Breach Claims Against Yale University: On July 25, 2023, the plaintiff-participants in the Yale University 403(b) plan filed a Notice of Appeal to the Second Circuit challenging the jury verdict finding that Yale and its plan fiduciaries did not breach their fiduciary duties under ERISA by offering imprudent investments and causing the plan to pay excessive administrative fees. The Yale lawsuit is the only ERISA fiduciary breach class action lawsuit in recent memory to be tried before a jury rather than the court. Most courts hold that ERISA fiduciary breach claims are equitable and do not convey the right to a jury trial. On August 14, the Yale defendants filed a conditional notice of cross-appeal on the jury trial issue. See Vellali v. Yale University, No. 3:16-cv-01345-AWT (D. Conn.), Dkt. 628, 630.
- DOL, HHS and Treasury Seek Comments on Proposed Amendments to MHPAEA Regulation: On July 25, 2023, the Biden Administration announced the issuance of a proposed rule to amend existing regulations implementing the Mental Health Parity and Addiction Equity Act (MHPAEA) and to add additional regulations regarding implementation of MHPAEA’s comparative analysis requirement. The Departments will accept comments through October 2, 2023.
While the editors do their best to stay apprised of material developments, employee benefits is an expansive (and ever growing) subject matter. As such, we acknowledge that there may be topics of interest that are not being adequately covered. This is your Newsletter, and we want to make sure we are publishing anything that interests you. So please let us know if there are topics or issues that you would like us to cover. Please also let us know if you (or someone you know) would be interested in authoring an article for an upcoming edition of the Newsletter. The Newsletter depends on EBC members like you who are willing to contribute their time, effort, and perspectives.