Photo of David Thornton

David Thornton helps employers deliver retirement, health and welfare benefits to their executives and employees. With more than 30 years of experience, he has developed a diverse practice counseling hundreds of public and private employers and non-profit organizations in drafting, maintaining and administering retirement plans ranging from $1 million to several billion dollars in assets, including many in the $100 million to $500 million asset range. He has deep experience in ESOP transactions, successfully navigating the significant fiduciary duty considerations and tax code requirements involved with these transactions.

I recently discussed the appeals request in Wit v. United Behavioral Health, a case that could set a precedent for the behavioral health industry and access to mental health and addiction treatment, for a Behavioral Health Business article. In February 2019, the U.S. District Court for the Northern District of California ruled that United Behavioral Health violated the Employee Retirement Income Security Act (ERISA) by incorrectly denying behavioral health claims. The company appealed to the 9th Circuit, and in March 2022 a three-judge panel reversed the decision. The plaintiffs are now appealing that decision, requesting that the full panel of judges review the case.

Continue Reading Wit v. United Behavioral Health Appeals

Plan sponsors and plan fiduciaries, and vendors, advisors and other service providers: Take notice! The end of the special COVID-19 “Outbreak Period,” which began on March 1, 2020 and continues to apply, is nowhere in sight based on recent guidance from the Department of Labor (DOL) in the form of a Disaster Relief Notice (New Guidance).

This means that the “tolling” of a number of participant and plan deadlines did not end on February 28, 2021, as most plan sponsors and others had assumed based on prior guidance. In fact, for some participants, the tolling period could extend far out into the future. In addition, the new guidance reminds plan sponsors and plan fiduciaries of the “guiding principle” for administering employee benefit plans – act reasonably, prudently and in the interest of workers and their families. Good faith compliance with the new guidance will likely be judged on this standard.

Background

Pursuant to joint guidance issued on May 4, 2020 (Joint Guidance), the DOL and Internal Revenue Service (IRS) suspended or “tolled” a number of participant and plan deadlines. The “tolled” deadlines include:

  • HIPAA Special Enrollment Notice Obligations – the 30-day period (or 60-day period, as applicable) to request special enrollment in a group health plan.
  • COBRA Notices, Elections and Premium Payments – the periods for individuals to notify the plan of certain COBRA events (e.g., a qualifying event, such as a divorce or child losing eligibility), the 60-day period for electing COBRA continuation coverage, and the 45-day (initial) and 30-day (monthly) deadlines for making COBRA premium payments.
  • Claims and Appeal Procedures – the date by which an individual may file a claim for benefits or an appeal of an adverse benefit determination (this applies to all ERISA-both welfare and retirement-plans).


Continue Reading DOL Disaster Relief Notice Offers Guidance on Extension of COVID-19 Outbreak Period Benefits

Public companies maintaining deferred compensation arrangements for their executive officers should consider how recent changes to the regulations under Section 162(m) of the Internal Revenue Code (the Code) may impact the timing of payments to be made to participants and their beneficiaries under such plans – if action is required, the affected plans must be amended before December 31, 2020 to avoid complications or penalties.

Continue Reading Changes to Section 162(m) Affecting Deferred Compensation Arrangements

As part of the federal government’s response to the COVID-19 pandemic, the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA), and Pension Benefit Guaranty Corporation (PBGC) have recently provided relief to benefit plan sponsors by moving back certain upcoming plan compliance deadlines. See further below for a detailed list of the specific relief. IRS Notice 2020-23 provides that if any deadline would occur between April 1 and July 14, that deadline is automatically moved back until July 15, 2020, and this extension applies to a list of 44 employee benefit plan-related deadlines. The IRS notice triggered the PBGC’s disaster relief policy, which automatically extends certain PBGC deadlines that occur in the same April 1 to July 14 time period to July 15, 2020.

Additional relief was announced on April 28, in the form of a joint notice ( Joint Notice) issued by EBSA, IRS and the Treasury Department, which extended a number of deadlines for benefit plans and participants in accordance with CARES Act changes to ERISA Section 518. The Joint Notice’s relief applies to the “Outbreak Period,” the length of time beginning on March 1, 2020, and ending 60 days after the announcement that the COVID-19 National Emergency is over. On the same day, EBSA issued Disaster Relief Notice 2020-01 (Disaster Relief Notice). The Disaster Relief Notice clarified EBSA’s enforcement stance on certain fiduciary duties that plan sponsors have by extending deadlines. The Disaster Relief Notice also stated that the Outbreak Period extension, described in the Joint Notice, also applies to the distribution timelines for notices, disclosures, and other documents that Title I of ERISA requires plans to distribute to participants and beneficiaries. EBSA also released an FAQ which explains some of the relief provided by the Joint Notice and Disaster Relief Notice.

Continue Reading IRS, EBSA and PBGC Provide Further COVID-19 Relief for Benefit Plans

In a Law360 article, I provided insight on the Department of Labor’s (DOL) proposed regulations on retirement plans that would make it easier for companies to join existing retirement plans or join forces to generate new ones – which has the potential to broaden the availability of workplace retirement plans to allowing small businesses. Under the proposed regulations, “a group of unrelated employers could now have a single ERISA plan,” I explained.

Continue Reading DOL Proposes Easing Retirement Plan Regulations

Bass, Berry & Sims attorneys Doug Dahl and David Thornton authored an article for HR Professionals Magazine outlining the top 10 things every HR professional should know about the Department of Labor’s (DOL’s) new fiduciary rule. In the article, Doug and David answer the following 10 questions about the new rule:

Continue Reading Attorneys Offer Top 10 Guide Regarding DOL’s New Fiduciary Rule

Under new federal regulations, issued in May 2016 with an initial compliance deadline of July 16, 2016, it is now illegal for any healthcare provider that receives federal funding from HHS to discriminate on the basis of sex, race, color, national origin, age and disability.  While many healthcare providers already have in place general nondiscrimination policies, it is important to point out that:  (1) Section 1557 is the first federal civil rights law to broadly prohibit healthcare providers (e.g., certain physician practices, hospitals and health insurers) from discriminating on the basis of gender, gender identity, pregnancy and sex stereotyping; and (2) it will require covered providers to comply with a whole host of new requirements, including appointing a Section 1557 compliance coordinator, adopting a grievance procedure and providing notices.  Notices must be in place by mid-October in order to be in full compliance.  Section 1557 also will require the entities take reasonable steps to provide meaningful access to healthcare services to individuals with limited English proficiency and to individuals with disabilities.

Continue Reading Impact of ACA Section 1557 on Administration of Healthcare Services

Bass, Berry & Sims attorney David Thornton offers guidance on the recent Supreme Court decision in Obergefell v. Hodges, and how public and private sector employers are struggling with its legal and financial implications. As David explains, “‘[t]hey’re worried that if they keep the same-sex partner benefits, there’s a pretty good argument that opposite-sex