Criminal Conviction Of Plan Trustee, Outside Legal Counsel Shows Risks of Retaliating Against Whistleblowers For Reporting ERISA Violations

August 1, 2016

The U.S. Department of Labor’s just announced successful whistleblower prosecution in Perez v. Scott Brain, et al of an employee benefit plan trustee, and an individual lawyer and her law firm that served as the employee benefit plan’s outside legal counsel of violating the fiduciary responsibility and whistleblower rules of the Employee Retirement Income Security Act of 1974 (ERISA) illustrates why employee benefit plan sponsors, trustees or other fiduciaries, their management, legal counsel, auditors and other service providers must both prudently investigate whistleblower allegations or other evidence of potential wrongdoing involving their employee benefit plans and resist the temptation to retaliate against employees or others for reporting or cooperating in the investigation of alleged improprieties involving an employee benefit plan.

The Brain decision highlights the care that employee benefit plan sponsors, fiduciaries, advisors and service providers and their management must use when responding to allegations or other evidence of wrongdoing relating to an employee benefit plan or its administration, investigating and addressing alleged misconduct or other performance or disciplinary concerns involving parties whose report or involvement in investigations of ERISA or other misconduct could form the basis of a potential ERISA 510 or other retaliation complaint.

The decision also makes clear that outside legal counsel advising an employee benefit plan or its fiduciaries in relation to the investigation or response to charges of ERISA misconduct involving an employee benefit plan must use care to avoid actions that could render them liable for participation in acts of illegal retaliation, violating their duty of loyalty to the plan by allowing themselves to become involved in a conflict of interest when investigating or defending potential wrongdoing involving an employee benefit plan, or engaging in other discretionary actions that could constitute a breach of fiduciary duty in violation of ERISA.

In Perez v. Scott Brain, et al., the U.S. District Court for the Central District of California ruled that Cement Masons Southern California Trust Fund’s trustee and Cement Masons Local 600 business manager, Scott Brain (Brain) and outside trust fund legal counsel, Melissa Cook, violated sections 510 and 404 of ERISA by causing the firing a trust fund employee Cheryle Robbins (Robbins) and an employee of the plan’s third party administrator, Cory Rice (Rice), in retaliation for their involvement in filing an internal complaint about and cooperating with the Labor Department’s Employee Benefit Security Administration’s federal criminal investigation of reports of Brain’s wrongful interference as a trustee with collections and contributions from unionized employers.

In 2011, Robbins, director of the trust funds’ audit and collections department, responded to a federal criminal investigation into Brain’s activities with contractors. The same year, she and Rice, who worked for the third-party administrator to the trust fund, American Benefit Plan Administrators, now, Zenith American Solutions (Zenith), participated in an effort to complain about Brain’s interference with efforts to collect delinquent contributions from contractors. Within weeks of this conduct, Robbins was suspended from her employment with the trust fund. Less than six months later, both Robbins and Rice were fired.

The court’s 71-page decision chronicles the coordinated retaliatory campaign orchestrated by Brain and Cook that led to Robbins’ suspension and firing by the employee benefit plan as well as the termination of Cook by his employer, Zenith..

With respect to Robbins’ suspension, the court found that the evidence showed Brain and Cook “were very upset with Robbins due to her contact with the [Department of Labor],” and that Brain and Cook “used their positions and influence to cause the other trustees to vote in favor of” suspending Robbins. To do so, the court explained, Brain and Cook “took the lead at the . . . [b]oard meeting with respect to the discussion of Robbins’ contact with the [Department of Labor]” and “created an environment that was hostile to her,” which “caused the trustees to vote to place her on leave.” The court noted that the two “‘set in motion’ the decision by the Joint Board to put Robbins on leave [.]”

As for Rice’s firing, the court explained how Brain and Cook retaliated against Rice by pressuring his employer, Zenith, into firing Rice and manipulating the Zenith relationship to deter Zenith from rehiring Rice in retaliation for his involvement in efforts to make an internal complaint about Brain.

Based upon evidence introduced during a five-day trial, the District Court ruled that Brain, Cook and Cook’s law firm violated ERISA section 510 by suspending and then discharging Robbins, and causing Zenith to refuse to hire Robbins and to discharge Rice in retaliation for their participation in reporting Brian’s misconduct to the General President of the Operative Plasterers’ and Cement Masons’ International Association and because Robbins participated in a federal criminal investigation of Brain.  Specifically, the District Court ruled:

  • Brain, Cook and Cook’s law firm wrongfully retaliated against Robbins in violation of ERISA 510 for her communications with the DOL by placing her on administrative leave; causing the work performed by the department that Robbins previously managed to be outsourced to Zenith and by causing Zenith not to hire Robbins to participate in its work;
  • Brain, Cook and Cook’s law firm wrongfully retaliated against Rice in violation of ERISA 510 by causing Zenith to terminate Cook;
  • Brain breached his fiduciary duty under ERISA 404 by retaliating against Robbins and causing her to be placed on administrative leave and that Cook knowingly participated in that breach.

The court held that Brain and Cook’s retaliatory conduct violated section 510 of ERISA, which prohibits retaliation against whistleblowers for complaining of ERISA violations or cooperating with a governmental investigation of such violations. The court also held that the couple’s retaliation against Robbins breached Brain’s fiduciary duties under ERISA section 404 to the trust funds and that Cook participated knowingly in that breach.

In reaching its decision, the court rejected attorney Cook’s argument that she was somehow immunized from her unlawful conduct because she was an attorney to the trust funds.  Among other things, the court noted the “apparent conflict of interest” Cook had in representing the trust funds while being in an undisclosed “romantic relationship” with Brain, which existed as defendants carried out their retaliatory scheme. Reminding lawyers of their ethical duties in California, the court cited California Rule of Professional Conduct 3-310(B), which the court explained “requires that an attorney disclose to a client any personal relationship or interest that he or she knows, or with the exercise of reasonable diligence should know, could substantially affect her his or her professional judgment in advising the client.”

As punishing for these criminal violations of ERISA, the District Court ordered the permanent removal of Brain as a trustee. It also ordered the permanent barring of Brain, Cook and her law firm from serving the Cement Masons Southern California Trust Funds. In addition, the court ordered Cook and her law firm to repay all attorneys’ fees she billed the trust funds for the actions she took in retaliating against whistleblowers Robbins and Rice.  These criminal sanctions were in addition to the $630,000 civil damage award that the Labor Department previously secured in lost wages and damages for Robbins, Rice and another worker victimized by Brain and Cook in August 2015.

In addition to its successful prosecution of Brain, Cook and Cook’s law firm on these charges, the DOL also had sought, but failed to convince the District Court based on the evidence presented at trial to find Brain, Cook, Cook’s law firm and Brain’s fellow trust fund trustee Local 600 business agent and Joint Board of Trustees member Jaime Briceno guilty of wrongful retaliation against another alleged whistleblower or Briceno of breaching his fiduciary duties under ERISA by failing to prudently investigate Robbins’ allegations against Brain; or by voting to use assets of the Trust Funds to pay the cost of the settlement of the civil action brought by Robbins. The District Court also refused to consider a newly raised charge that Brain breached his fiduciary duty by failing to collect all monies owed to the Trust Funds on the grounds that the Labor Department had failed to timely raise the charge. While the court refused to convict Briceno, Brain, Cook or Cook’s law firm on the additional charges, the Labor Department’s prosecution of these claims illustrates that along with abstaining from retaliating against ERISA whistleblowers, employee benefit plan fiduciaries also should position themselves to defend against potential breach of fiduciary duty claims based on alleged inadequacies in their investigation or response to reports or other evidence of misconduct involving the plan by prudently investigating and acting to redress allegations or other evidence of potential wrongdoing in the administration of employee benefit plans or their assets.

About The Author

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, the author of this update, attorney Cynthia Marcotte Stamer, is AV-Preeminent (the highest) rated attorney repeatedly recognized as a Martindale-Hubble as a “LEGAL LEADER™” and “Texas Top Rated Lawyer” in Health Care Law, Labor and Employment Law, and Business & Commercial Law and among the “Best Lawyers In Dallas” in ERISA, Labor and Employment and Healthcare Law by D Magazine for her nearly 30 years of experience and knowledge representing and advising employers, employee benefit plans, their sponsors, fiduciaries, service providers and vendors and others on these and other planning, business transaction and contracting, administration, compliance, risk management, audits, investigations, government and private litigation and other enforcement and other related matters.

past Chair and current committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, a former ABA Joint Committee on Employee Benefits Council Representative ,

Ms. Stamer’s legal and management consulting work throughout her nearly 30-year career has focused on helping management manage.  Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving,  she de[;pus jer her extensive legal and operational knowledge and experience to help organizations and their management use the law and process to manage people, process, compliance, operations and risk.

As a key part of this work, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, expat and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

A former lead consultant to the Government of Bolivia on its Social Security reform law Ms. Stamer also is well-known for her leadership on U.S. health and pension, wage and hour, tax, workforce, tax, education, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer for many years acted as the scribe responsible for leading the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights annual agency meeting and regularly participates in the OCR and other JCEB annual agency meetings, and participates in the development and submission of comments and other input to the agencies on regulatory, enforcement and other concerns. She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer serves on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and as an editorial advisor and contributing author of many other publications. Her leadership involvements with the American Bar Association (ABA) include year’s serving many years as a Joint Committee on Employee Benefits Council representative; ABA RPTE Section current Practice Management Vice Chair and Substantive Groups & Committees Committee Member, RPTE Employee Benefits & Other Compensation Committee Past Group Chair and Diversity Award Recipient, current Defined Contribution Plans Committee Co-Chair, and past Welfare Benefit Plans Committee Chair Co-Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; International Section Life Sciences Committee Policy Vice Chair; and a speaker, contributing author, comment chair and contributor to numerous Labor, Tax, RPTE, Health Law, TIPS, International and other Section publications, programs and task forces. Other selected service involvements of note include Vice President of the North Texas Healthcare Compliance Professionals Association; past EO Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former Southwest Benefits Association Board of Directors member, Continuing Education Chair and Treasurer; former Texas Association of Business BACPAC Committee Member, Executive Committee member, Regional Chair and Dallas Chapter Chair; former Society of Human Resources Region 4 Chair and Consultants Forum Board Member and Dallas HR Public Policy Committee Chair; former National Board Member and Dallas Chapter President of Web Network of Benefit Professionals; former Dallas Business League President and others. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email here or via telephone to (469) 767-8872.

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For important information concerning this communication see here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

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Health Plans Disclosing Data To State All Payer Data Banks Face HIPAA Risks

May 31, 2016

Self-insured employer or union sponsored health plans (Plans), their fiduciaries, third party administrative or other service providers, and sponsors should consult legal counsel for advice about whether their Plans might violate the Privacy Rule of the Health Insurance Portability & Accountability Act (HIPAA) by disclosing individually identifiable claims or other Plan records or data to a state “all payer” claims or other data base in response to a state law or regulation mandating those disclosures in light of the Supreme Court’s recent ruling in Gobeille v. Liberty Mutual, 136 S. Ct. 936 (2016).

Gobeille involved a challenge to a Vermont “all payer” law similar to laws enacted by at least 20 other states, that requires health plan payers, their administrators or both to disclose individually identifiable health claims and other claims data about Plan members to a state created all payer data base. The Vermont law challenged in Gobeille required health insurers and other payers to disclose treatment information about Plan members as well as other certain health care claim payment and other data to an all payer claims database, which under the law is made “available as a resource for insurers, employers, providers, purchasers of health care, and State agencies to continuously review health care utilization, expenditures, and performance in Vermont.  See Gobeille at 941.  Vermont’s law requires third party administrators of self-insured Plans and other payers to disclose the information regardless of whether the member resides or received the treatment in Vermont.

In Gobeille, the Supreme Court ruled that the preemption provisions of Section 514 of the Employee Retirement Income Security Act (ERISA) bar Vermont from requiring self-insured ERISA Plans

In addition to excusing self-insured Plans from the trouble and expense of complying with Vermont’s disclosure law, the Supreme Court’s ruling in Gobeille that Vermont cannot enforce the law against self-insured ERISA Plans raises a concern that the Privacy Rules of HIPAA may prohibit Plans from disclosing certain individually identifiable claims information.  The HIPAA compliance concern arises because the  claims information and other data that the Vermont and most other similar laws require Plans and other payers to disclose generally is or include information that qualifies as “protected health information” within the meaning of the HIPAA Privacy Rule. These laws generally are structured either to directly require self-insured Plans to disclose the claims data directly, indirectly compel the disclosure by requiring third party administrators of such Plans to disclose the claims information for Plans they administer, or both.

Under the HIPAA Privacy Rule, Plans and other HIPAA-covered entities and service providers acting as business associates of the Plans are prohibited from using or disclosing individually identifiable protected health information unless the use or disclosure is expressly authorized by the Privacy Rule. Since violations of the Privacy Rule trigger substantial civil or even criminal penalties under HIPAA, Plans, their fiduciaries, service providers acting as business associates and other members of their workforce need to verify that the disclosure meets all of the requirements to fall within an exception to the Privacy Rule’s prohibition against disclosure before allowing such a disclosure

Before Gobeille, many self-insured Plans and their administrators treated the disclosures of individually identifiable claims data of the Plans as permitted as a disclosure “required by law” Privacy § 164.512(a), which provides in relevant part:

  1. a) Standard: Uses and disclosures required by law.

 (1)  A covered entity may use or disclose protected health information to the extent that such use or disclosure is required by law and the use or disclosure complies with and is limited to the relevant requirements of such law.

 (2)  A covered entity must meet the requirements described in paragraph (c), (e), or (f) of this section for uses or disclosures required by law.

The Gobeille ruling that that the Vermont law is unenforceable against self-insured Plans appears to eliminate the availability of this exception as a basis for allowing disclosures in response to the Vermont law as well as calls into question the ability of Plans to rely upon the “required by law” exception to the Privacy Rule to justify disclosures of protected health information to state all payer data bases in response to similar requirements enacted in the other 20 states that have enacted similar mandates.  Plans that previously disclose or intend in the future to disclose protected health information to a state all payer data base in Vermont or another state generally will want to carefully document their justification, if any for making that disclosure under the Privacy Rule.

Unless the disclosure otherwise falls within another exception to the HIPAA Privacy Rule against disclosures without authorization, Plans, their sponsors, fiduciaries, third party administrators and other service providers and other members of the Plan workforce at minimum should be concerned that the HIPAA risks of disclosing protected health information in response to these state mandates after Gobeille. Plans that decide not to disclose information otherwise required by such state law requirements in light of the Gobeille ruling or HIPAA concerns may want to consult with qualified legal counsel about the steps, if any, that the Plan might want to take to document its ERISA preemption or other justifications for not providing the otherwise required disclosures.

Beyond evaluating the advisability of future disclosures in response to the Vermont or another similar all payer statute, Plans whose data previously was disclosed by the Plan or its administrator to an all payer data base under the belief that the disclosure was required by law also may want to seek the advice of qualified legal counsel about whether these prior disclosures triggered breach notification responsibilities under the Breach Notification rules of HIPAA with respect to any disclosures previously made. When electronic protected health information is used or disclosed in violation of HIPAA, the Breach Notification Rules of HIPAA generally require Plans and their business associates timely notify impacted individuals and the Department of Health & Human Services Office of Civil Rights (OCR) in accordance with the detailed requirements set forth in OCR’s implementing regulations.  Furthermore, where a breach involves 500 or more individuals, the timetable for providing notification to OCR is accelerated and the Plan also is required to provide notification to the media and others.

About The Author

Cynthia Marcotte Stamer is a noted Texas-based management lawyer and consultant, author, lecturer and policy advocate, recognized for her nearly 30-years of cutting edge management work as among the “Top Rated Labor & Employment Lawyers in Texas” by LexisNexis® Martindale-Hubbell® and as among the “Best Lawyers In Dallas” for her work in the field of “Tax: Erisa & Employee Benefits” and “Health Care” by D Magazine.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, past Chair and current committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, a former  ABA Joint Committee on Employee Benefits Council Representative and , Ms. Stamer helps management manage.

Ms. Stamer’s legal and management consulting work throughout her nearly 30-year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes. Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, expat and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings. She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer serves on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and as an editorial advisor and contributing author of many other publications. Her leadership involvements with the American Bar Association (ABA) include year’s serving many years as a Joint Committee on Employee Benefits Council representative; ABA RPTE Section current Practice Management Vice Chair and Substantive Groups & Committees Committee Member,  RPTE Employee Benefits & Other Compensation Committee Past Group Chair and Diversity Award Recipient,  current Defined Contribution Plans Committee Co-Chair, and  past Welfare Benefit Plans Committee Chair Co-Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; International Section Life Sciences Committee Policy Vice Chair; and a speaker, contributing author, comment chair and contributor to numerous Labor, Tax, RPTE, Health Law, TIPS, International and other Section publications, programs and task forces.  Other selected service involvements of note include Vice President of the North Texas Healthcare Compliance Professionals Association; past EO Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former Southwest Benefits Association Board of Directors member, Continuing Education Chair and Treasurer; former Texas Association of Business BACPAC Committee Member, Executive Committee member, Regional Chair and Dallas Chapter Chair; former Society of Human Resources Region 4 Chair and Consultants Forum Board Member and Dallas HR Public Policy Committee Chair; former National Board Member and Dallas Chapter President of Web Network of Benefit Professionals; former Dallas Business League President and others. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

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Final Investment Advice Fiduciary Rules Mean Work For Employers, Fiduciaries & Advisors

April 12, 2016

Employer and other employee benefit plan sponsors, benefit plan committees and fiduciaries, and the broker-dealers, financial advisors, insurance agents and other plan service providers that provide investment-related platforms, advice, recommendations or other services for employee benefit plans need to reevaluate the fiduciary status of their service providers and begin restructuring as necessary their associated relationships, service provider commission or other compensation, service agreements and arrangements or other services in response to a new Regulatory Guidance Package (Rule) that explicitly classifies parties providing “covered investment advice” as fiduciaries subject to the conflict of interest and other fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA).

Supplementing existing precedent and EBSA’s already existing broad, functional definition of “fiduciary,” the Rule clarifies when individuals and entities that provide “covered investment advice” to plans, plan sponsors, fiduciaries, plan participants, beneficiaries and Individual Retirement Accounts (IRAs) and IRA owners are:

  • Fiduciaries of the Plan or IRA for purposes of Title I of ERISA;
  • Required to acknowledge their status and the status of their individual advisers as “fiduciaries” of the plan for purposes of ERISA;
  • Accountable as fiduciaries for making prudent investment recommendations without regard to their own interests, or the interests of those other than the plan or plan participant or beneficiary that is the customer;
  • Restricted to charging only “reasonable compensation” for their advice or service;
  • Prohibited from making misrepresentations to their customers regarding recommended investments; and
  • Prohibited from providing advice or making payments that involve any conflicts of interest prohibited by ERISA unless the arrangements fully complies with a prohibited transaction exemption issued by EBSA under ERISA Section 408 that otherwise complies with ERISA Section 404.

Concurrent with its adoption of final regulations implementing these new rules concerning investment advisors and their fiduciary responsibilities, the Rule also adopts certain new Prohibited Transaction Exemptions that define requirements that providers of covered investment advice and the plan fiduciaries that engage them generally will be required after April 7, 2017 to ensure are met for investment advisors to receive commission-based compensation for their services, to sell or purchase certain recommended debt securities and other investments out of their own inventories to or from plans and IRAs, or to receive compensation for recommending fixed rate annuity contracts to plans and IRAs.

Investment Advice Covered By The Rule

The final rule applies to “covered investment advice.” For purposes of the rule, “covered investment advice” generally includes:

  • A recommendation to a plan, plan fiduciary, plan participant and beneficiary and IRA owner for a fee or other compensation, direct or indirect, as to the advisability of buying, holding, selling or exchanging securities or other investment property, including recommendations as to the investment of securities or other property after the securities or other property are rolled over or distributed from a plan or IRA;
  • A recommendation as to the management of securities or other investment property, including, among other things, recommendations on investment policies or strategies, portfolio composition, selection of other persons to provide investment advice or investment management services, selection of investment account arrangements (e.g., brokerage versus advisory); or recommendations with respect to rollovers, transfers, or distributions from a plan or IRA, including whether, in what amount, in what form, and to what destination such a rollover, transfer, or distribution should be made.

Under the Rule, the fundamental threshold element in establishing the existence of fiduciary investment advice is whether a “recommendation” occurred. The Department has taken an approach to defining “recommendation” that is consistent with and based upon the approach taken by the Financial Industry Regulatory Authority (FINRA), the independent regulatory authority of the broker-dealer industry, subject to the oversight of the Securities and Exchange Commission (SEC).

The Rule specifies that a “recommendation” is a communication that, based on its content, context, and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action. Under the Rule, the more individually tailored the communication is to a specific advice recipient or recipients, the more likely the communication will be viewed as a recommendation.

The types of relationships that must exist for such recommendations to give rise to fiduciary investment advice responsibilities include recommendations made either directly or indirectly (e.g. through or together with any affiliate) by a person who:

  • Represents or acknowledges that they are acting as a fiduciary within the meaning of ERISA or the Internal Revenue Code (Code);
  • Renders advice pursuant to a written or verbal agreement, arrangement or understanding that the advice is based on the particular investment needs of the advice recipient; or
  • Directs the advice to a specific recipient or recipients regarding the advisability of a particular investment or management decision with respect to securities or other investment property of the plan or IRA.

Also, the Rule only applies where a recommendation is provided directly or indirectly in exchange for a “fee or other compensation.” “Fee or other compensation, direct or indirect” means any explicit fee or compensation for the advice received by the person (or by an affiliate) from any source, and any other fee or compensation received from any source in connection with or as a result of the recommended purchase or sale of a security or the provision of investment advice services including, though not limited to, such things as commissions, loads, finder’s fees, and revenue sharing payments. A fee or compensation is paid “in connection with or as a result of” such transaction or service if the fee or compensation would not have been paid but for the transaction or service or if eligibility for or the amount of the fee or compensation is based in whole or in part on the transaction or service.

 Investment Advice Not Covered By Rule

While the Rule reaches broadly, not all communications with financial advisers are covered fiduciary investment advice under the Rule. As a threshold issue, if the communications do not meet the definition of “recommendations” as described above, the communications will be considered non-fiduciary. In response to requests from commenters, and for clarification, the final rule includes some specific examples of communications that would not rise to the level of a recommendation and therefore would not constitute a fiduciary investment advice communication under the Rule.

When evaluating the applicability and effect of these exemptions, however, it is important to keep in mind that by adding the new Rule, EBSA seeks to make clear that individuals or organizations that engage in activities described in the Rule as covered investment advice are fiduciaries subject to these requirements. Since the Rule does not revoke existing EBSA fiduciary guidance or judicial precedent, service providers and other parties with discretionary authority or responsibility over employee benefit plans not covered by the Rule still could qualify as fiduciaries if their authority, responsibility or actions functionally causes them to fall within the definition of a fiduciary under these other pre-existing definitions of fiduciary status.    Subject to this cautionary proviso, the following are some of the activities that the Rule identifies as activities that might fall outside the Rule’s covered investment activities in the manner required by the Rule:

  • “Education” as defined and provided in accordance with the Rule;
  • “General communications that a reasonable person would not view as an investment recommendation;”
  • Simply making available a platform of investment alternatives without regard to the individualized needs of the plan, its participants, or beneficiaries if a plan fiduciary independent of the platform service provider actually decides what investment options are offered and the platform service provider also represents in writing to the plan fiduciary that they are not undertaking to provide impartial investment advice or to give advice in a fiduciary capacity; and
  • Transactions with independent plan fiduciaries where the adviser knows or reasonably believes that the independent fiduciary is a licensed and regulated provider of financial services (banks, insurance companies, registered investment advisers, broker-dealers) or those that have responsibility for the management of $50 million in assets, and other conditions set forth in the Rule are met;
  • Communications and activities made by advisers to ERISA-covered employee benefit plans in swap or security-based swap transactions when the swap transaction meets certain conditions set forth in the Rule, which EBSA designed in coordination with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to avoid conflicts between the Rule and the swap and security-based swap rules promulgated by those agencies under the Dodd–Frank Wall Street Reform and Consumer Protection Act; and
  • Activities and communications of employees working in the payroll, accounting, human resources, and financial departments of the plan sponsor or its affiliated business who routinely develop reports and recommendations for the company and other named fiduciaries of the sponsors’ plans if the employees receive no fee or other compensation in connection with any such recommendations beyond their normal compensation for work performed for their employer.

New Prohibited Transaction Exemptions Published With Rule

 Concurrent with its publication of the Rule, EBSA also is adopting the following new “Prohibited Transaction Exemptions to the otherwise applicable statutory list of prohibited conflict of interest transactions in ERISA Section 406 and the companion rules of the Internal Revenue Code (Code) applicable to qualified retirement plans.

Noncompliance with the Rule, including where necessary to avoid violating ERISA Section 406’s prohibited transaction prohibitions, by parties providing covered investment advice or the engagement or retention of such a service provider by an employer or other party exercising or with responsibility or authority to make that engagement carriers big legal risk.  Advisers and financial institutions that don’t meet the BICE standards and other requirements of the Rule expose themselves to liability from breach of fiduciary duty claims under ERISA brought by ERISA plans, participants, and beneficiaries or in the case of IRAs or other non-ERISA plans, state law breach of contract or other state law claims brought by IRAs and other non-ERISA plans or accountholders.   Likewise an employer, member of its management or other party responsible for or having authority to choose the service provider risks breaching its own fiduciary duties under ERISA by engaging a party that renders covered investment advice without complying with the Rule.  In addition, to the extent that the engagement or activities of the service provider involves commission compensation payments, swaps or other activities that would constitute a prohibited conflict of interest under ERISA Section 406 not structured and conducted with an applicable prohibited transaction exemption, both the service provider and the fiduciary could bear personal liability for involving the plan or its assets in a prohibited transaction in violation of ERISA Section 406.   For this reason, to help positions themselves to mitigate or defend against liability for such potential claims, advisors generally should take steps to ensure that the advisor can prove the advisor acted in their clients’ best interest by documenting their use of a reasonable process and adherence to professional standards in deciding to make the recommendation and determining it was in the customer’s best interest, and by documenting their compliance with the financial institution’s policies and procedures required by the Best Interest Contract Exemption.

“Best Interest Contract Exemption” (BICE)

 ERISA and the Internal Revenue Code rules for qualified retirement plans generally prohibit individuals or entities providing fiduciary investment advice to plan sponsors, plan participants, and IRA owners to receive payments creating any of the listed statutory conflicts of interest listed in ERISA or the Code without a prohibited transaction exemption (PTE), employee benefit plan sponsors, benefit plan committees and other fiduciaries, and the broker-dealers, financial advisors, insurance agents and other plan service providers providing covered investment services to employee benefit plans also need to ensure that their compensation is structured to ensure that the compensation and other arrangements do not violate these prohibited transaction and conflict of interest prohibitions of the Code and ERISA, ERISA’s reasonable compensation rules, or the other requirements of ERISA.

Concerning ERISA Section 406’s party-in-interest and other conflict of interest requirements, EBSA issued in conjunction with its publication of the Rule a new “Best Interest Contract Exemption” (BICE), which provides a prohibited transaction exception that permits the payment of commission-based compensation to fiduciary investment advisors as long as the conditions specified in the BICE are met. Among other things, the BICE requires as a condition of the applicability of this exception that:

  •  The financial institution to acknowledge in writing fiduciary status for itself and its advisers;
  • The financial institution and advisers to adhere to ERISA’s basic standards of impartial conduct, including giving prudent advice that is in the customer’s best interest, avoiding making misleading statements, and receiving no more than reasonable compensation;
  • The financial institution to have policies and procedures designed to mitigate harmful impacts of conflicts of interest; and
  • The financial institution to disclose specified information about their conflicts of interest and the cost of their advice.

 The specified disclosures required to meet the conditions of the BICE include:

  •  Descriptions of material conflicts of interest;
  • Descriptions of fees or charges paid by the retirement investor
  • A statement of the types of compensation the firm expects to receive from third parties in connection with recommended investments;
  • Notification that investors have the right to obtain specific disclosure of costs, fees, and other compensation upon request; and
  • A requirement that a website must be maintained and updated regularly that includes information about the financial institution’s business model and associated material conflicts of interest, a written description of the financial institution’s policies and procedures that mitigate conflicts of interest, and disclosure of compensation and incentive arrangements with advisers, among other information. However, the BICE currently does not require that the website include individualized information about a particular adviser’s compensation.

Noncompliance with the Rule by parties providing covered investment advice or the engagement or retention of such a service provider by an employer or other party exercising or with responsibility or authority to make that engagement carriers big legal risk.  Advisers and financial institutions that don’t meet the BICE standards and other requirements of the Rule expose themselves to liability from breach of fiduciary duty claims under ERISA brought by ERISA plans, participants, and beneficiaries or in the case of IRAs or other non-ERISA plans, state law breach of contract or other state law claims brought by IRAs and other non-ERISA plans or accountholders.   Likewise an employer, member of its management or other party responsible for or having authority to choose the service provider risks breaching its own fiduciary duties under ERISA by engaging a party that renders covered investment advice without complying with the Rule.  In addition, to the extent that the engagement or activities of the service provider involves commission compensation payments, swaps or other activities that would constitute a prohibited conflict of interest under ERISA Section 406 not structured and conducted with an applicable prohibited transaction exemption, both the service provider and the fiduciary could bear personal liability for involving the plan or its assets in a prohibited transaction in violation of ERISA Section 406.   For this reason, to help positions themselves to mitigate or defend against liability for such potential claims, advisors generally should take steps to ensure that the advisor can prove the advisor acted in their clients’ best interest by documenting their use of a reasonable process and adherence to professional standards in deciding to make the recommendation and determining it was in the customer’s best interest, and by documenting their compliance with the financial institution’s policies and procedures required by the Best Interest Contract Exemption.

Principle Transactions Exemption

 The “Principal Transactions Exemption” published in connection with the Rule provides an exemption from the prohibitions of ERISA Section 406 to allow investment advice fiduciaries to sell or purchase certain recommended debt securities and other investments out of their own inventories to or from plans and IRAs where the requirements of the Exemption are met. As with the Best Interest Contract Exemption, the Principle Transaction Exemption requires, among other things, that investment advice fiduciaries adhere to certain impartial conduct standards, including obligations to act in the customer’s best interest, avoid misleading statements, and seek to obtain the best execution reasonably available under the circumstances for the transaction.

Existing PTE For Fixed Rate Annuity Contracts

In connection with its adoption of the Rule, EBSA also is amending existing exemption, PTE 84-24, which provides relief for insurance agents and brokers, and insurance companies, to receive compensation for recommending fixed rate annuity contracts to plans and IRAs. As amended in connection with the Rule, the requirements of PTE 84-24 are modified to provide increased safeguards for retirement investors while still providing “more streamlined conditions” than those required to meet the Best Interest Contract Exemption. Consistent with its enthusiasm for encouraging the offering and adoption of life time income products to retirees over the past several years, EBSA says these more streamlined conditions of PTE 84-24 are appropriate to “facilitate access by plans and IRAs to these relatively simple lifetime income products.” More complex products, such as variable annuities and indexed annuities, will be able to be recommended by advisers and financial institutions under the terms of the Best Interest Contract Exemption.

Other PTE Exemptions Modified To Raise Requirements

The Department is amending other existing exemptions, as well, to ensure that plan and IRA investors receiving investment advice are consistently protected by impartial conduct standards, regardless of the particular exemption upon which the adviser and the fiduciary engaging that advisor intend to rely upon to avoid violating of ERISA 406.

While the compliance deadline for the new Rule is not until April 8, 2017, the relief from ERISA Section 406 offered by the new Exemptions announced in connection with the Rule’s publication generally became available when EBSA published them in connection with the Rule on April 8, 2016. As this relief could provide helpful protection against fiduciary challenges or exposures that some service providers might already face under already existing fiduciary precedent or guidance, many service providers involved in dealings with plan or IRA investments may wish to take steps to position themselves to claim protection under one of these new PTE Exemptions even before the Rule takes effect.  When evaluating this option, some service providers should be aware of the availability of transitional relief that may make it easier for some service providers to claim relief under the new BICE or Principal Transactions Exemption between April 8, 2017 and January 1, 2018 (Transition Period).  In addition, parties that contemplate wishing to take advantage of the relief offered by the new BICE or Principal Transactions Exemption may benefit from taking advantage of reduced requirements for meeting these conditions during the phase in Transition Period. During this Transition Period, EBSA still will require firms and advisers to adhere to the Exemptions’ impartial conduct standards, provide a notice to retirement investors that, among other things, acknowledges their fiduciary status and describes their material conflicts of interest, and to designate a person responsible for addressing material conflicts of interest and monitoring advisers’ adherence to the impartial conduct standards; however compliance with certain other requirements is waived until January 1, 2018. Of course, full compliance with all requirements of the applicable Exemptions will be required as of January 1, 2018.

Rule Requires Action By Plan Sponsors, Fiduciaries & Service Providers

 The new Rule creates lots of new work both for advisors and other service providers in, as well as plan sponsors, plan administrative committees or other fiduciaries responsible for selection, retention and oversight of those providing these services. All such parties have much to do to fulfill their ERISA responsibilities by the April 8, 2017 deadline for compliance with the new Rule and to deal with other likely fallout from the new Rule.

Fallout for Covered Investment Advisors & Other Service Providers

Clearly, advisors, financial institutions and other service providers providing covered investment advice and others with involvement with investments or investment platforms have much work to do to prepare for the new rule. However, compliance with the Rule is not merely a service provider problem. Employer or other plan sponsors, plan fiduciaries or other responsible for the credentialing, selection, retention, and oversight of service providers dealing with investments also need to ensure that the party or parties responsible for these vendor dealings fulfills its own fiduciary responsibilities in dealing with vendors and service providers that may be impacted by these requirements.

 Advisers and financial institutions that don’t meet the requirements of the new Rule expose themselves to liability from breach of fiduciary duty claims under ERISA brought by ERISA plans, participants, and beneficiaries or in the case of IRAs or other non-ERISA plans, state law breach of contract or other state law claims brought by IRAs and other non-ERISA plans or accountholders. Obviously, advisors, financial institutions and other service providers providing advice or having dealings or involvement with IRA or employee benefit plan investments, their selection or administration will want to review and update their relationships and their associated compensation, contracts, disclosures and other arrangements and processes in light of the new Rule. Clearly, those that could be considered to offer or provide covered investment advice need to start revising contracts, compensation, policies, practices and other arrangements in anticipation of the Rule. At the same time, the Rule also is likely to create work for certain service providers with involvement or dealings with investments that the service provider considers to fall outside of the Rule:

  • To respond to changes in client requests for proposals, contracts or other due diligence in response to the Rule;
  • To respond to changes in response to the Rule by covered investment advisors to reconfigure services, relationships and contracts in response to the Rule;
  • To clarify and institutionalize and document communications by the uncovered service provider to clients and others of limits on the service provider’s services and capacity that are necessary or helpful to avoid or limit exposure of the service provider to coverage by or claims of liability arising out of the Rule; and/or
  • Otherwise.

Fallout For Plan Sponsors & Plan Fiduciaries Selecting & Overseeing Service Providers

Employer or other plan sponsors, plan fiduciaries or other responsible for the credentialing, selection, retention, and oversight of service providers dealing with investments also need to anticipate and be prepared to deal the effects of adoption of the Rule on their responsibilities and risks as they relate to the selection, retention, contracting, compensation and other dealings with service providers impacted by the Rule.

The Rule’s explicit designation as fiduciaries of certain service providers that previously may have been characterized as providing services as non-fiduciaries, much less its tightening of requirements for the investment advisors that are covered fiduciaries, creates a host of new responsibilities and considerations for employers sponsoring plans and its members of management that select, retain, contract with and oversee these service providers.

Under ERISA, parties designated in writing or function exercising discretionary authority or responsibility for the selection, retention, compensation and oversight of fiduciary or other service providers generally are considered fiduciaries for purposes of carrying out these responsibilities and bear personal liability for prudently selecting, retaining and monitoring the service provider in accordance with ERISA.

To fulfill this fiduciary obligation, those involved in selecting and retaining investment advisors covered by the rules should expect to bear responsibility for ensuring that the covered investment advisor is engaged in compliance with the Rule and the otherwise applicable requirements of ERISA, including that the engagement and compensation of the selected investment advisor will not involve the plan or its assets in a prohibited conflict of interest listed in ERISA Section 406.  Furthermore, failing to ensure that the engagement of an investment advisor does not violate these conflict of interest rules also exposes a sponsoring employer of a qualified plan to excise tax liability under the Code’s companion party-in-interest rules applicable to such plans.

Accordingly, whether the employer itself retains and directly exercises the discretionary authority to select and retain a service provider or appoints a committee or member of its staff to perform these responsibilities as a designated fiduciary, an accurate understanding of which service providers, taking into account the rule, now will be considered fiduciaries and the requirements of the Rule flowing from this status is essential to understand and make appropriate provisions to ensure that proper steps are taken to ensure that the Rule and ERISA’s other requirements for prudent credentialing, bonding, contracting, compensation, and other dealings with the service provider and to budget for the proper conduct of the activities needed to fulfill these obligations.

In light of these and other exposures and obligations, employer and other plan sponsors, plan fiduciaries and plan service providers alike all should start preparing to respond to the new Rule.

To help positions themselves to mitigate or defend against liability for such potential claims, each party generally will want to take prudent and well-documented steps to evaluate the fiduciary status of each applicable service provider, as well as its own fiduciary status, capacity, responsibility and other exposures in light of the new Rule.  Since ERISA fiduciary status attaches functionally based on the functional facts and circumstances, sponsoring employers, as well as service providers generally will want to consider taking appropriate steps to document this analysis and other compliance and risk management efforts to avoid violations of the Rule, as well as to position themselves to defend against other claims and liabilities.

 In all cases, each impacted party should make an effort to apply and retain evidence documenting its efforts including, in the case of all service providers, whether or not covered investment advisors under the Rule, their efforts to act in their clients’ best interest by documenting their use of a reasonable process and adherence to professional standards in deciding to make the recommendation and determining it was in the customer’s best interest, and by documenting their compliance with the financial institution’s policies and procedures and applicable requirements of the law.

 About The Author

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, past Group Chair, past Welfare Benefit Committee Chair, and Current Defined Contribution Plan Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, a past ABA Joint Committee on Employee Benefits Council Representative Cynthia Marcotte Stamer is a practicing attorney, regulatory and public policy advocate, author, lecturer and industry and public policy thought leader recognized as a “Top” attorney in employee benefits, labor and employment and health care law for her more than 28 years’ of leading edge experience nationally and internationally providing practical and effective advice and representation to management.

Ms. Stamer’s legal and management consulting work throughout her career has focused on helping organizations and their management understand and use the law and process to manage people, performance, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative and pragmatic problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.

As a key part of this work, Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements.

She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. In these and other engagements, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also advises and represents clients on OCR and other HHS, Department of Labor, IRS, FTC, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. In the course of this work, Ms. Stamer has accumulated an impressive resume of more than 28 years’ of experience advising and representing clients on Title I and other ERISA fiduciary responsibility concerns including assisting and advising plan sponsors, plan fiduciary and plan service providers to design and administer fiduciary and other compliance and risk management policies and practices, conducting investigations of potential fiduciary or other breaches, and serving as special counsel, advising and representing these and other clients in connection with EBSA, IRS, SEC and other governmental audits, investigations and enforcement actions; in private disputes and litigation regarding plan investments or other fiduciary concerns between plan participant and beneficiaries, plans, plan fiduciaries, plan sponsors and plan service providers; or both.

Ms. Stamer also is deeply involved in helping to influence health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. Deeply involved in both U.S. statutory and regulatory pension and health care reform throughout her career, Ms. Stamer both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health plans, their sponsors, administrators, insurers and many other business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see www.cynthiastamer.com, or http://www.stamerchadwicksoefje.com the member of contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested reviewing other Solutions Law Press, Inc. ™ resources at www.solutionslawpress.com such as:

 If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here.   ©2016 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


Health Plans, Sponsoring Employers & Others Urged To Act Immediately In Response To Premera, Anthem Blue Cross Breaches

March 17, 2015

Today’s report by Premera Blue Cross of a massive data breach affecting as many as 11 million customers’ personal health and financial information on the heels of the large-scale data breach announcement by fellow Blue Cross Association, Anthem, is another reminder that employers and other health plan sponsors, fiduciaries, insurers specifically, and U.S. businesses generally should immediately assess and tighten up their privacy, data security and data breach compliance and risk management to fulfill applicable legal mandates and to strengthen defenses against resulting liabilities and member backlash likely to arise from these or future breaches.

Notice of the Premera and Anthem breaches are likely to trigger obligations for health plans and their sponsoring employers or unions, administrators, insurers, and other vendors and service providers to take immediate steps to conduct documented investigations, take corrective action and provide breach notifications the  Privacy, Security and Breach Notification rules of the Health Insurance Portability & Accountability Act require health plans and their business associates to provide in response to notice of a breach. Depending on the scope and nature of data affected and their involvement with the affected plans, employer or other plan sponsors, fiduciaries, administrators and service providers also may be subject additional responsibilities under applicable contracts and policies, the fiduciary responsibility requirements of the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code, and a host of other laws.  Insurance industry or other vendors providing services to these plans also may face specific responsibilities under applicable insurance, health care, federal or state identity theft, privacy or data security, or other federal or state laws.  See, e.g., Restated HIPAA Regulations Require Health Plans To Tighten Privacy Policies And Practices; Cybercrime and Identity Theft: Health Information Security Beyond; HIPAA Compliance & Breach Data Shares Helpful Lessons For Health Plans, Providers and Business Associates.

The need for prompt assessment and action is not necessarily limited to health plans and organizations sponsoring, administering or doing business with the plans involved in the Premera or Anthem breaches.  The occurrence of these breaches arguably raises the questions about the adequacy of the safeguards, practices and policies of other health plans and insurers, their sponsors and fiduciaries, insurers, administrators and other vendors.  places other health plans.  Health plans, their sponsors, fiduciaries, administrators, insurers and other vendors generally will want to make prudent documented inquiries about the adequacy of their health plan’s data security and privacy safeguards in anticipation of potential future breaches, audits or other scrutiny.

Beyond the specific health plan related concerns, most businesses also will want to consider the adequacy and defensibility of the data collection, use, disclosure, security and other practices affecting sensitive data within or on behalf of their organization.  The report of these and other health plan breaches, as well recent reports of identity theft and other fraud impacting federal tax returns and other large data breach reports involving retailers and other prominent businesses are spurring recognition of the large risks and need for greater scrutiny and accountability to business collection, use, and protection of sensitive personal and other data.

Of course, as in the case of health plans, the risk is exploding largely in response to the continued evolution of electronic payment and other business operating systems coupled with the emergence of data harvesting and other capabilities.  These new technologies and practices are fueling a host of new mandates, opportunities and risks for virtually every U.S. business.  Cyber criminals seem to always be one step ahead of business and government in leveraging these emerging opportunities for their criminal purposes.

With everyone from the Internal Revenue Service and other federal and state government agencies to private business partners pushing to leverage the efficiencies and other opportunity of electronic transactions and data, businesses in the US and around the world increasing are encouraged if not required to conduct more and more transactions containing sensitive business and individual tax information, personal financial information, personal health information, trade secrets and other confidential business and personal information electronically.  Meanwhile big data and other business and marketing gurus also encourage business to leverage their own opportunities to use data collected for these business mandates and expanding technology also to collect, use and repurpose customer,  prospect or other business information collected in the course of business to benefit their business’ marketing, transactional and other opportunities.

As these practices take hold and expand, data breaches and other cyber crime events, the legal requirements and risks of collection and use of data also are growing.  Privacy, identity theft and other cyber crime and other concerns have led federal and state lawmakers to enact an ever-growing list of notice, consent, disclosure, security and other laws and regulations including but not limited to the Fair & Accurate Credit Transaction Act (FACTA),the Gramm-Leach-Bliley Act, the HIPAA Privacy & Security Rules, state identity theft, data security and data breach and other electronic privacy and security laws and an ever-growing plethora of others.

As the cyber crime epidemic continues to grow and notorious breeches and schemes involving the Internal Revenue Service, Veterans Administration, retail giants like Target, Home Depot, and others, insurance giants like Anthem and Premera and others, government and private enforcement is rising and the judgments, penalties and other costs soaring even as federal and state regulators are looking at the need for expanded rules and penalties.   See Cybercrime Enforcement Statistics; DOJ Enforcement Priorities & Statistics. In addition, widening data privacy and security concerns from these massive data breach reports also are prompting  Congress and State regulatorsto consider the need for added reforms, see, McCaul to Hold Hearing on President’s Cybersecurity.  In deed, even before news of the Premera breach broke, he Federal Trade Commission today announced plans to host a workshop on Nov. 16, 2015, to look at the privacy issues around the tracking of consumers’ activities across their different devices for advertising and marketing purposes.

While these and other legal and enforcement developments promise new liabilities and expenses, the business losses and customer and business partner implications experienced by Target, Anthem and other businesses already affected illustrate the severe business consequences that inevitably result if a business appears to have failed to take customer privacy or other data security concerns seriously.

The now notorious Target hacking data breach event is illustrative. Target reported in late 2013 that credit and debit card thieves stole the name, address, email address and phone number from the credit and debit card records of around 70 million Target shoppers between November 27 and December 15, 2013. After announcing the breach, Target reported a 46% drop in profits in the fourth quarter of 2013, compared with the year before despite having announced plans to invest $100 million upgrading their payment terminals to support Chip-and-PIN enabled cards and millions of dollars more in rectification efforts. See The Target Breach, By the Numbers. Subsequently, Target’s losses have continued to mount even as it now faces lawsuits and other enforcement actions as a result of the breach. See Banks’ Lawsuits Against Target for Losses Related to Hacking Can ContinueMeanwhile, the enforcement and other fallout continues to evolve.

While businesses generally need to tighten their defenses and compliance, health plans, their sponsors, fiduciaries, administrators and vendors have specific obligations that require immediate, well-documented action when an actual or potential breach happens.  The Privacy, Security and Breach Notification requirements of HIPAA require that health plans adopt specific policies and maintain and administer specific safeguards to prevent and respond to breaches of protected health information.  In the event of a breach, these rules require that the health plan, usually acting through its fiduciaries, and affected service providers that qualify as business associates both investigate and redress the breach, as well as provide specific notification as soon as possible and usually no later than 30 days after the health plan knows or has reason to know of the breach.  Significant civil and even criminal penalties can apply if a health plan, health insurer or its business associate fails to fulfill these obligations.

Beyond the specific requirements of HIPAA, employers and other plan sponsors and others involved in the maintenance and administration of the health plan or the selection and oversight of its vendors often may have other less-realized responsibilities.  As health plan data often includes payroll and other tax data, employers, the health plans and other parties involved also may have specific responsibilities under the Internal Revenue Code or other laws.   To the extent that the plan sponsor or another party is named as the plan administrator or otherwise exercises discretion and control over the selection of the insurer or other plan vendor or other plan operations, the fiduciary obligations of ERISA also may require a prudent investigation and other action to meet fiduciary obligations of ERISA.  Brokers, insurers, third party administrators, preferred provider organizations or other managed care providers and others doing business with the health plan also may have specific responsibilities under state insurance, health care, data breach and identity theft or other laws.  Under the provisions of most of these laws, leaving it to the insurer or other vendor involved in the breach generally will not suffice to fulfill applicable legal responsibilities, much less allay the fears of plan members, employees, health care providers and others involved with the health plan.

In the face of these developments, health plans and their sponsors, fiduciaries and others working with them must take immediate action in response to the breaches reported.  Along with these specific health plan related responses,  businesses also should the adequacy and defensibility of their current overall data collection, use and security practices while remaining ever vigilant for new requirements, as well as weaknesses in their own practices.  Health plans specifically and businesses generally need to build their defenses in anticipation of these events both to withstand government and private litigation and enforcement, and to survive the harsh judgment of public opinion.

 For Help With Risk Management, Compliance & Other Management Concerns

If you need assistance in responding to a health plan breach concern or with auditing or assessing, updating or defending your organization’s compliance, risk management or other  internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469) 767-8872.

Scribe for the ABA JCEB Annual Agency Meeting with the Office of Civil Rights, a faculty and steering committee for the Southern California ISSA-HIMSS Health Care Privacy Program, Board Certified in Labor & Employment Law, a Fellow in the American College of Employee Benefits Counsel  recognized as a “Top 100” lawyer in labor and employment, employee benefits and health care law, Ms. Stamer is nationally recognized for her work, publications, public speaking and education and other leadership on privacy and data security and other risk management and compliance.

A management attorney who works with businesses and government to manage and redress people, process and risk, Ms. Stamer has worked extensively on data and other privacy risk management and compliance,  Throughout her career, she has conducted investigations and advised, and assisted health care, insurance, retail and a broad range of other public and private organizations with privacy and data security audit and risk management, contracting, investigation, defense and remediation throughout her more than 25 year career.

Past Chair and of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits,  past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, current Co-Chair of the RPTE Welfare Benefit Committee and Vice Chair of the ABA TIPS Employee Benefits Committee, Ms. Stamer works, publishes and speaks extensively on cyber crime and other privacy, management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other  concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the ABA, Insurance Thought Leadership, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications.

As part of her extensive involvements in privacy and data security concerns, Ms. Stamer will be among the panelists discussing “Fiduciary Obligations In the Context of a Data Breach” conference call to be hosted on April 2, 2015 by Fiduciary Responsibility Committee of the American Bar Association (ABA) Real Property Probate and Estate Section Employee Benefits & Other Compensation Group.  During the program, Ms. Stamer and other panelists will discuss the quagmire of fiduciary legal and operational challenges that data breach announcements by health plan vendors and insurers present for employer and union-sponsored health plan fiduciaries and health plans.  She also will serves as the scribe for the upcoming ABA Joint Committee On Employee Benefits Annual Agency Meeting with the Federal agency that enforces HIPAA, the Office of Civil Rights, and 2014 Conference Chair and  steering committee and faculty member of the Southern California ISSA/HIMSS Healthcare Privacy & Security Summit scheduled for June 4, 2015 in Los Angeles.

For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.  For information about participation in the April 2 Conference Call or joining the Committee, see here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2015 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Stamer Kicks Off Dallas HR 2015 Monthly Lunch Series With 2015 Federal Legislative, Regulatory & Enforcement Update

November 10, 2014

Human resources and other management leaders are watching Washington to see if the change in Congressional control resulting from the November 4, 2014 mid-term election ushers in a more management friendly federal legal environment. Since President Obama took office, the Democrats aggressive pursuit of health care, minimum wage and other federal pro-labor legislation, regulations and enforcement has increased management responsibilities, costs and liabilities.

Nationally recognized management attorney, public policy advisor and advocate, author and lecturer Cynthia Marcotte Stamer will help human resources and other management leaders prepare for 2015 when she speaks on “2015 Federal Legislative, Regulatory & Enforcement Update: What HR & Benefit Leaders Should Expect & Do Now” at the 2015 Dallas HR monthly luncheon series kickoff meeting on January 13, 2014.

About The Program

While November 4, 2014 Republican election victories gave Republicans a narrow majority in both the House and Senate when the new Congress takes office January 3, 2015, the new Republican Majority may face significant challenges delivering on their promises to move quickly to enact more business-friendly health care, guest worker, tax and other key reforms Republicans say will boost the employment and the economy.

While President Obama and Democrat Congressional leaders say they plan to work with the new majority, President Obama already is threatening to use vetoes, regulations and executive orders to block Republicans from obstructing or rolling back his pro-labor policy and enforcement agenda.   When the new Congress takes office, the narrowness of the Republican Majority in the Senate means Republicans can’t block a Democratic filibuster or override a Presidential veto without recruiting some Democratic support.

As the Democrats and Republicans head into battle again, Board Certified Labor & Employment attorney and public policy advocate Cynthia Marcotte Stamer will help human resources and other management leaders get oriented for the year ahead by sharing her insights and predictions on the legislative, regulatory and enforcement agendas that HR, benefit and other business leaders need to plan for and watch in 2015.  Among other things, Ms. Stamer will:

  • Discuss how management can benefit from monitoring and working to influence potential legislative, regulatory and enforcement developments when planning and administering HR and related workforce policies;
  • Discuss the key workforce and other legislative, regulatory and enforcement priorities and proposals Democrats and Republicans plan to pursue during 2015;
  • Share her insights and predictions about how the narrow Republican majority, Mr. Obama’s lame duck presidency and other factors could impact each Party’s ability to pursue its agenda
  • Share tips management leaders can use to help monitor developments and to help shape legislation, regulation and enforcement through Dallas HR, SHRM and other organizations as well as individually;
  • Learn tips for anticipating and maintaining flexibility to respond to legislative, regulatory and enforcement developments; and
  • More

To register or get more details about the program, DallasHR, or both, see http://www.dallashr.org.

About Ms. Stamer

Board certified labor and employment attorney, public policy leader, author, speaker Cynthia Marcotte Stamer is nationally and internationally recognized and valued for her more than 25 years of work advising and representing employers, insurers, employee benefit plans, their fiduciaries and advisors, business and community leaders and governments about workforce, employee benefits, social security and pension, health and insurance, immigration and other performance and risk management, public policy and related regulatory and public policy, management and other operational concerns.

Throughout her career, Ms. Stamer continuously both has helped businesses and their management to monitor and respond to federal and state legislative, regulatory and enforcement concerns and to anticipate and shape federal, state and other laws, regulations, and enforcement in the United States and internationally.

Well known for her leadership on workforce, health and pension policy through her extensive work with clients as well as through her high profile involvements as the Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment, a founding Board member of the Alliance for Health Care Excellence, a Fellow in the American College of Employee Benefit Counsel, the American Bar Association (ABA), and the State Bar of Texas leadership and other involvements with the ABA including her annual service leading the annual agency meeting of Joint Committee on Employee Benefits (JCEB) representatives with the HHS Office of Civil Rights and participation in other JCEB agency meetings, past involvements with legislative affairs for the Texas Association of Business and Dallas HR and others, and many speeches, publications, and other educational outreach efforts, Ms. Stamer has worked closely with Congress and federal and state regulators on the Patient Protection & Affordable Care Act and other health care, pension, immigration, tax and other workforce-related legislative and regulatory reforms for more than 30 years. One of the primary drafters of the Bolivian Social Security reform law and a highly involved leader on U.S. workforce, benefits, immigration and health care policy reform, Ms. Stamer’s experience also includes working with U.S. and foreign government, trade association, private business and other organizations to help reform other countries’ and U.S. workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Ms. Stamer also contributes her policy, regulatory and other leadership to many professional and civic organizations including as Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its current Welfare Benefit Plans Committee Co-Chair, a Substantive Groups & Committee Member; a member of the leadership council of the ABA Joint Committee on Employee Benefits; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; the current Vice Chair of the ABA TIPS Employee Benefit Committee, and the past Coordinator of the Gulf Coast TEGE Council TE Division.

The publisher and editor of Solutions Law Press, Inc. who serves on the Editorial Advisory Boards of Employee Benefit News, HR.com, InsuranceThoughtLeadership.com and many other publications, Ms. Stamer also is a prolific and highly respected author and speaker,  National Public Radio, CBS, NBC, and other national and regional news organization, Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Telemundo, Modern Healthcare, Business Insurance, Employee Benefit News, the Employee Benefits News, World At Work, Benefits Magazine, InsuranceThoughtLeadership.com, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, CEO Magazine, CFO Magazine, CIO Magazine, the Houston Business Journal, and many other prominent news and publications.  She also serves as a planning faculty member and regularly conducts training and speaks on these and other management, compliance and public policy concerns for these and a diverse range of other organizations. For additional information about Ms. Stamer, see www.cynthiastamer.com.

For Added Information and Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For Help Or More Information

If you need assistance in auditing or assessing, updating or defending your organization’s compliance, risk manage or other  internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Plan’s Purchase of Company Stock Triggers $6.48 Million Award Against ESOP Sponsor, Shareholder, Board Members & Trustees

November 2, 2014

A $6.48 million judgment against Direct TV satellite television installer, Bruister and Associates Inc.(BAI) its sole owner, Herbert Bruister, and other trustees of  two BAI-sponsored employee stock ownership plans shows plan sponsors and trustees involved in stock purchase transactions where employee stock ownership plans commonly referred to as “ESOPs” and other employee benefit plan buy or hold investments in the stock of plan sponsors or other related businesses the risks of failing to conduct the transactions to ensure that the transactions are prudently performed and otherwise conducted in compliance with the Employee Retirement Income Security Act (ERISA) fiduciary responsibility requirements.

BAI Lawsuit & Judgment Highlights

The BAI judgment stems from a Department of Labor lawsuit that charged BAI, along with BAI board members and plan trustees Bruister and Amy Smith, and plan trustee Jonda Henry  engaged in prohibited transactions and breached other fiduciary duties under ERISA by causing the plans to purchase 100 percent of BAI’s shares for $24 million in three sales transactions conducted between December 2002 to December 2005.

According to court documents, Bruister, Smith and Henry, as plan fiduciaries, engaged in prohibited transactions by causing the plans to pay excessive prices for BAI stock purchased from Bruister. For each purchase, the Labor Department charged the fiduciaries used flawed valuations prepared by Matthew Donnelly and his firm, Business Appraisal Institute.

The court also found that the three fiduciaries breached their duty of loyalty from start to finish. Additionally, Bruister and his attorney David Johanson went so far as to fire the initial attorney representing the plans because that attorney was too thorough. Moreover, the court found that Bruister and Johanson exercised undue influence over Donnelly’s valuations, and that as a result, Donnelly was not sufficiently independent to provide valuations for the plans.

The court concluded that Bruister, Henry and Smith, in their role as plan fiduciaries, failed to properly represent plan participants’ interests, and that they unreasonably relied on an appraiser who so obviously lacked independence. The court reasoned, “An informed trustee would not have remained idle while the seller communicated directly with the employee stock ownership trust’s independent appraiser and financial advisor to elevate the price at the participants’ expense.”

Although Johanson was not a fiduciary, the court found his conduct worthy of comment because he both was the attorney for the seller and structured each sale.   The court noted that Johanson attempted to influence the valuations in Bruister’s favor, and the testimony Johanson gave at trial did not support his denials. The court even  noted that Johanson coached Donnelly during a break in his deposition to retract his testimony that Johanson represented Bruister individually. “History rebuts Johanson’s suggestion that he did not interfere with Donnelly’s valuations and raises doubts as to each of the subject transactions,” the court said.

The order requires Bruister, Smith and Henry to jointly pay $4.5 million in restitution to the plans and requires Bruister to pay an additional $1.98 million in prejudgment interest. The order also held Bruister Family LLC liable with all defendants for $885,065 and jointly liable with Bruister for $390,604.

Company Stock Investments Carry Special ERISA Risks

Purchases of company stock by an ESOP or other employee benefit plan can create a wide range of risks under ERISA’s  fiduciary responsibility rules. When making investment or other decisions under an employee benefit plan, the general fiduciary duty standards of ERISA § 404 generally require plan fiduciaries to act prudently and solely in the interest of participants and beneficiaries. Meanwhile, except in certain narrow circumstances and subject to fulfillment of ERISA § 404,  the prohibited transaction rules of ERISA § 406 among other things prohibits plan fiduciaries from causing the plan to engage in a transaction, if he knows or should know that such transaction is a direct or indirect:

  • Sale or exchange, or leasing, of any property between the plan and a party in interest;
  • Furnishing of goods, services, or facilities between the plan and a party in interest;
  • Transfer to, or use by or for the benefit of a party in interest, of any assets of the plan; or
  • Acquisition, on behalf of the plan, of any employer security or employer real property in violation of section 1107 (a) of this title.

As for all plan investment transactions, detailed, unbiased valuation documentation showing the prudence of any decision to invest or hold the investments of the plan in company stock is critical when determining the initial purchase or sale prices for plan transactions involving company stock.  Since the sponsoring company is a party-in-interest of the plan, holding, must less using plan assets to purchase company stock or other activities resulting in the inclusion of company stock among the plan assets held by the plan creates presumptions of impropriety that impose higher than usual burdens upon the plan, its sponsor and fiduciaries to prove the appropriateness of the transaction.  See e.g., Pfeil v. State Street Bank & Trust Co., 671 F.3d 585 (6th Cir. 2012).  As ESOP transactions to purchase company stock inherently require a host of complicated party-in-interest and other conflict of interest concerns, these risks are particularly heightened.  Employee benefit plans, their fiduciaries and sponsors the need to continuously and prudently conduct documented monitoring and evaluations evaluate and monitor the investment of plan assets in company stock,the analysis and decisions about whether to continue to keep and offer this stock under the plan, as well as the qualifications, credentials and conduct of the fiduciaries and others empowered to influence these decisions. The Labor Department’s statement in announcing the Parrot litigation sums up the messages from these cases. “Plan officials are required by law to manage the ESOP in a careful, prudent manner and to act solely to benefit the plan’s participants,” said Jean Ackerman, director of the Employee Benefit Security Administration’s (EBSA’s) San Francisco Regional Office, which. “This action underscores the department’s commitment to protect the benefits that employers promise to their employees.”

In light of these exposures, plan fiduciaries, sponsors and their management, service providers and consultants participating in these activities need to both act with care and carefully document their actions to position to defend potential challenges.

Plans, their sponsors and fiduciaries also should ensure that appropriate steps are taken in selecting the fiduciaries, management and service providers responsible for administering or overseeing the administration of their plans, the selection of vendors, and other critical details.  Appropriate background checks and other credentialing should be done both at commencement and periodically.  Bonding and fiduciary liability insurance should be arranged and reviewed periodically along with their activities.  Documentation of these and other steps should be carefully created and preserved.

When and if a change in stock value or other event that could compromise the investment occurs, consideration should be given as to the responsibilities that such events create under ERISA.  As company leaders often have dual responsibilities to both the company and the plan, it is important that the company sponsoring the plan, its management and owners learn in advance how these responsibilities impact each other so that they are aware of the issues and have a good understanding of responsibilities and options as situations evolve.

Businesses and business leaders that fail to conduct and maintain the necessary evidence that these requirements are met when involving the plan in these transactions risk significant liability.

“Plan fiduciaries have an obligation to work solely in the interest of plan participants,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi.in the Labor Department’s October 31, 2014 announcement of the judgment. “When they fail to do so, the retirement security of workers is put in jeopardy, and we will take action to make plan participants whole.”

 For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to monitor or respond to evolving laws and regulations,  drafting or administering programs,  resolving or defending audits, investigations or disputes or other  employee benefit, human resources, safety, compliance  or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Government Contractors Get More Time To Comment On Burdens Of OFCCP Proposed Compensation Transparency Disclosure Regs

November 2, 2014

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs is giving employers that are government contractors and the subcontractors working with them more time to comment on for its   proposed rule (Proposed Rule) requiring federal contractors and subcontractors to submit an annual Equal Pay Report on employee compensation to the OFCCP.  The Proposed Rule is one of several proposed or adopted rules that the Obama Administration hopes will make it easier for federal regulators like OFCCP and private plaintiffs to identify potential violations of federal discrimination rules and enforce their rights under these and other rules.

Like many OFCCP rules promulgated by the Obama Administration in the post-Stimulus Bill era, the Proposed Rule both reaches many contractors that historically might not have been subject to these types of OFCCP reporting requirements and broadens the reporting obligations of government contractors under the OFCCP regulations.  The Proposed Rule would apply to companies that file EEO-1 reports, with more than 100 employees, and hold federal contracts or subcontracts worth $50,000 or more for at least 30 days. Through the Equal Pay Report, OFCCP would be able to collect summary employee pay and demographic data using existing government reporting frameworks.

The Proposed Rule seeks to formally implement the directives of the  presidential memorandum President Obama signed April 8 instructing the Labor Secretary to propose a rule to collect summary compensation data from federal contractors and subcontractors. The Labor Department originally published a notice of proposed rulemaking in the Federal Register on Aug. 8, with a deadline to submit comments by November. 6. Under an announcement published last week, OFCCP is extending the comment period until Monday, January 5, 2015.

The Proposed Rule is one of several rule changes proposed or adopted by OFCCP and other agencies under the Obama Administration that seek to expand federal oversight and enforcement of federal employment discrimination requirements.  In addition to the Proposed Rule, for instance, the OFCCP on September 17, 2014 also recently proposed Proposed Transparency Rule that would prohibit federal contractors from maintaining pay secrecy policies. The Proposed Transparency Rule would prohibit federal contractors and subcontractors from firing or otherwise discriminating against any employee or applicant for discussing, disclosing or inquiring about their compensation or that of another employee or applicant and also will face other new obligations.

Like a similar rule put forth by the National Labor Relations Board, the Proposed Transparency Rule scheduled for publication in the Federal Register on September 17, 2014 would:

  • Amend the equal opportunity clauses in Executive Order 11246 to afford protections to workers who talk about pay to include the nondiscrimination provision in Executive Order 13665.
  • Add definitions for compensation, compensation information, and essential job functions, terms which appear in the revised clauses.
  • Provide that contractors could use against allegations of discrimination under Executive Order 13665 one of the following two defenses as long as that defense is not based on a rule, policy, practice, agreement or other instrument that prohibits employees or applicants from discussing or disclosing their compensation or that of other employees consistent with the provisions in the equal opportunity:
    • That the action was based on a legitimate workplace rule that does not violate the transparency rule;  or
    • That the adverse action was against an employee, who the employer entrusted with confidential compensation information of other employees or applicants as part of his or her essential job functions, for disclosing the compensation of other employees or applicants, unless the disclosure occurs in certain limited circumstances; and
    • the Proposed Rule’s compensation transparency requirement; or
  • Add a requirement that Federal contractors to tell employees and job applicants of the nondiscrimination protection created by Executive Order 13665 using specific language dictated by the OFCCP in handbooks and manuals, and through electronic or physical postings.
  • In addition, OFCCP also is considering requiring government contractors that provide manager training or meetings to include nondiscrimination based on pay in their existing manager training programs or meetings while encouraging other contractors to adopt this as a best practice for minimizing the likelihood of workplace discrimination.

The deadline for comment on that Proposed Transparency Rule is in December.

Government contractors or other businesses concerned about the potential burdens of compliance with either of these proposed rules should act promptly to review and submit comments within the comment period.

For Help With Investigations, Policy Updates Or Other Needs

If you need help in conducting a risk assessment of or responding to an IRS, DOL, Justice Department, or other federal or state agencies or other private plaintiff or other legal challenges to your organization’s existing workforce classification or other labor and employment, compliance,  employee benefit or compensation practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469) 767-8872 .

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer often has worked, extensively on these and other workforce and performance related matters.   She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For more information about Ms. Stamer and her experience or to get access to other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press, Inc.

Solutions Law Press, Inc.™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested in exploring other Solutions Law Press, Inc. ™ tools, products, training and other resources here and reading some of our other Solutions Law Press, Inc.™ human resources news here including the following:

If you or someone you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here.

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press, Inc.™  All other rights reserved.


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