The Joint Committee on Employee Benefits (JCEB) recently released Q&As containing responses from DOL representatives to over 30 questions from ABA members regarding employee benefit issues. The document, compiled by the JCEB, is based on informal discussions between representatives of the JCEB and DOL representatives at a May 6, 2011 meeting. Responses to the questions are unofficial and nonbinding.

Many of the questions concern requirements for group health plans under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively referred to as "health care reform"). Topics addressed include:

In response to the health care reform questions, the DOL provided a stock response indicating that appropriate questions would be addressed in more formal frequently asked question guidance to be issued by the DOL in coordination with the IRS and HHS.

Additional questions addressed retirement and other health and welfare plan issues, including:

Among the responses provided in the Q&A, DOL representatives addressed whether an ERISA lawyer providing services to a retirement plan sponsor client receives indirect compensation when the sponsor seeks reimbursement from the plan for amounts it has paid the lawyer. According to DOL representatives, under Section 408(b)(2) of ERISA, including the interim final regulations under Section 408(b)(2), the lawyer in this scenario has not received indirect compensation (see Practice Note, Service Provider Disclosure Requirements for Pension Plans).

DOL representatives also addressed whether updated prospectuses must be delivered automatically to certain plan participants under the recently published ERISA Section 404(a) regulations, now integrated with the ERISA Section 404(c) regulations. DOL representatives responded that a prospectus need only be provided according to ERISA's general timing requirements or on request. However, DOL representatives noted that, regardless of prospectus disclosure, the 404(a) regulation requires that certain core investment-related information (e.g. historical performance, benchmark information, fee information and glossary) for each designated investment option under the plan be presented to participants, in a chart or similar format, on or before the date a participant or beneficiary can first direct investments and at least annually thereafter. For more information on these requirements, see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans.

An additional question addressed record retention in the context of Form 5500. Under the all-electronic filing requirement for Form 5500, plan administrators must keep a copy of Form 5500, including all required signatures, on file and make a paper copy available on request. The question asks whether the paper copy maintained by the plan must have manual signatures, or if confirmation of the electronic signature is sufficient. In response, the DOL indicated that confirmation of the filing's electronic signature is not enough. Rather, a manually signed copy of Form 5500 must be kept as part of the plan's records, whether the records are maintained as paper records or electronically.

Regarding the health care reform-related issues, in particular, this year's Q&As raise more questions than they answer. This may reflect that for many of the health care reform topics, guidance is being provided jointly by the DOL, IRS and HHS. These three departments have jointly issued a series of FAQs addressing health care reform implementation (for one example, involving the summaries of benefits and coverage requirement, see Legal Update, DOL Issues FAQs on Health Care Reform and the Mental Health Parity Requirements), and the issues presented here will hopefully be addressed in additional joint FAQs or other guidance. Also, as to the question regarding diagnosis and diagnostic codes in benefit denial notices, it should be noted that amendments to regulations involving these rules eliminated the requirement to include diagnosis and treatment codes and their corresponding meanings, subject to certain safeguards, as part of benefit denials, including explanations of benefits. This requirement is addressed in our Practice Note, Internal Claims and Appeals under Health Care Reform.

Regarding the Q&A relating to indirect compensation, ERISA attorneys may be relieved to hear that DOL representatives indicated that the compensation they receive from their plan sponsor clients for non-settlor, plan administration and compliance services may not be considered indirect compensation for purposes of reporting on the Form 5500, even if the plan sponsor is later reimbursed from the plan.

For more information related to these topics, see the following PLC resources: