Posted on March 11th, 2009 by Chad De Groot | No Comments »
Filed under: Employee Benefits, HR Issues | 
In Golden Gate Restaurant Ass’n. v. City and County of San Francisco, 546 F.3d 639 (9th Circ. 2008), the Ninth Circuit held that the city’s ordinance requiring employers to provide employees with a certain level of benefits or pay a tax to the city that would go toward funding health care for low- to moderate-income individuals was not preempted by ERISA. The court further held that this decision was not in conflict with the Fourth Circuit’s decision in Retail Industry Leaders Ass’n v. Fielder, 475 F.3d 180 (4th Circ. 2007) and such decision was not contrary to the Congressional intent underlying ERISA that there not be a patchwork of regulation requiring plan administrators to understand and comply with 50 different state laws.
A former professor of mine once commented that the Ninth Circuit gets overturned twice in a good week. And, it is very possible the Supreme Court will disagree with the distinction the Ninth Circuit draws between the Maryland pay-or-play statute, which only impacted Wal-mart in the state, and the San Francisco ordinance at issue, and reverse the Ninth’s decision.
However, both arguments in this case carry water, and my opinion seems to change based on whose argument I am reading. Either way, if the Supreme Court takes the case, regardless of the holding, it will play a prominent role in the future of state mandated health care statutes.
Posted on March 9th, 2009 by Chad De Groot | No Comments »
Filed under: ., Employee Benefits |
Today, the U.S. Supreme Court granted review of a 7th Circuit decision which held that a mutual fund advisor’s fee was not excessive and an action brought under the fiduciary obligations of section 36(b) of the Investment Company Act was not appropriate unless it could be demonstrated that the advisor misled the fund’s directors who approved the fee.
In its October term, the Supreme Court shall review the decision in Jones v. Harris Associates, L.P., 527 F.3d 627 (7th 2008) . In Jones v. Harris Associates the 7th Circuit reasoned that because the advisors fee was approved by the directors of the fund, it could not be deemed excessive, unless it could be shown that the advisor materially misled the directors to gain such approval. The court determined that there is enough competition among mutual fund advisors to keep the fees they charge in check. In other words, it was not up to the court to determine a limit, or or put a cap on such fees.
Obviously, this case is of great importance to mutual fund advisors everywhere, and will be closely followed. Currently, millions of individuals have vast amounts of wealth tied up and invested in mutual funds for retirement and other investment initiatives, so the outcome in this case could loom large.
Posted on February 17th, 2009 by Chad De Groot | No Comments »
Filed under: Employee Benefits, HR Issues, Politics, The Financial Crisis |
The Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) requires covered employers to permit certain individuals who endure a qualifying event, to continue to receive benefits/coverage under the employer-provided health plan for a given period of time. This is often referred to as “continuation coverage.”
Employers can, and generally do, charge former employees and/or their dependents up to 102% of the premium that the employer would have paid for the coverage had the individual and/or his dependents continued to be covered by the plan. In addition to multiple other notices employers are required to provide with respect to COBRA, employers must provide notice of the availability of COBRA to each covered employee at the time of termination of employment.
The American Recovery and Reinvestment Act of 2009 (ARRA), which the President signed into law this afternoon, provides for a 9 month, 65% subsidy for COBRA premiums for coverage periods beginning on or after March 1, 2009, for those individuals who lost/lose their jobs between September 1, 2008 and December 31, 2009.
Employers must provide notice to all former employees and their dependents to whom this subsidy is available. In other words, employers must provide additional notice to those former-employees who were already laid off and already provided the “regular” COBRA Notice.
Consistent with current COBRA requirements, the subsidy will no longer be available to individuals who become eligible under another health plan, and the subsidy is not available to individuals with annual income exceeding $145,000 and couples with income exceeding $290,000.
