Employee Benefits
The legal and tax requirements for employee benefits have developed into a complex set of financial, legal, and fiduciary duties. At Crowell & Moring, we recognize that employee benefits are an integral part of doing business. We help our clients find cost-effective and practical solutions to their employee benefits problems. We regularly advise companies that supply products and services in the benefits market as well as employers, including many Fortune 500 companies, with respect to their own plans.
Much of our work consists of offering clients creative solutions, advising employers in understanding and complying with employment laws and regulations such as the Health Insurance Portability and Accountability Act (HIPAA), the Employee Retirement Income Security Act (ERISA), and the continuation of coverage provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA), and implementing new strategies in response to the changing economic and legal environment. If a solution is not available under existing guidance, our working relationships with federal agency and legislative personnel enable us to consistently obtain successful results for our clients. We can provide knowledgeable counsel on a host of benefits issues, including plan design, executive compensation, fiduciary responsibility, and employer-sponsored 401(k), pension, and life, health and other welfare benefit arrangements.
Our benefits lawyers speak and publish extensively on employee benefit matters. Crowell & Moring lawyers have lectured at programs sponsored by the American Benefits Council (ABC), Financial Executives International (FEI), and The American Bar Association (ABA), among others.
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Executive Compensation
At Crowell & Moring, we recognize the importance for our clients of attracting and retaining top executive talent and the significant role that employment-based benefits can play in helping to meet both of those objectives.
Our attorneys have substantial experience advising clients on all aspects of executive compensation, including both qualified and nonqualified deferred compensation arrangements. We regularly provide counsel on life, health, and other welfare benefits for executives and assist in structuring forms of elective and nonelective compensation and incentive programs. We help our clients design and implement executive compensation arrangements that not only satisfy corporate goals but are fully compliant with all applicable federal laws and regulations.
We have expertise regarding all aspects of executive compensation, including:
- Advising our clients on the new rules regarding deferred compensation under Internal Revenue Code (Code) sections 409A and 457A, and under Code section 457(f) for tax-exempt and governmental plans.
- The use of corporate-owned life insurance (COLI), trust-owned life insurance, and other insurance-based programs to fund executive compensation arrangements.
- The design and execution of short-term and long-term bonus plans.
- Deferred compensation plans with Code sections 280G and 162(m) implications.
- The various issues and design options associated with equity-based compensation, including the development of option, stock appreciation rights, and restricted stock.
- Representing our clients before Treasury and the Internal Revenue Service (IRS) with respect to their specific executive compensation arrangements, including IRS audits and examinations.
Health & Welfare Plans
A large portion of America's workforce today relies on employer-sponsored health and welfare plans, an area that has been dramatically altered by the health care reform law, otherwise known as the Patient Protection and Affordable Care Act (PPACA). Because healthcare costs have continued to increase rapidly, Crowell & Moring attorneys work to provide creative plan design options to employers to help them efficiently and effectively maintain and administer their benefit offerings. We advise our clients on the full spectrum of health and welfare matters and provide a broad range of services to employers, administrators, plan fiduciaries, insurance companies, and trade associations. Because of the long history we have in dealing with health and welfare benefit matters, we are familiar with not only traditional health benefit programs, but also with cafeteria plans, post-retirement life benefits, consumer-directed health plans - including various medical savings accounts, health reimbursement arrangements and flexible spending accounts – and voluntary employees' beneficiary association (VEBA) trusts. We also advise clients on plan documentation compliance, nondiscrimination testing concerns, and COBRA and HIPAA obligations.
In connection with health and other welfare plans, we have expertise in a broad range of areas, including:
- Plan documentation compliance, including the development of summary plan descriptions, plan documents, and wrap plans.
- ERISA claim procedures, prohibited transaction, and fiduciary responsibility provisions.
- Scope of federal preemption of state laws pertaining to insured plans, coordination of benefits, and mandated benefits requirements.
- Compliance with IRS requirements for active employee health plans, flexible spending arrangements (FSA), health savings accounts (HSA), and health reimbursement arrangements (HRA).
- Use of VEBAs and multiple employer arrangements to provide full or partial self-insurance of health and life benefits.
- COBRA, HIPAA, and Medicare rules and regulations.
- Helping clients understand the implications of PPACA and other emerging health reform proposals for employers, issuers, providers, and others.
Qualified Plans
Crowell & Moring attorneys have significant experience in all aspects of qualified plans, including 401(k) plans, defined benefit pension plans, money purchase pension plans, cash balance plans, and health and welfare plans. From designing plans for all types of plan sponsors and service providers to ensuring that the plans remain compliant with IRS, Treasury Department (Treasury), Department of Labor (DOL), and Pension Benefit Guaranty Corporation (PBGC) guidance, our attorneys are ready and able to assist you.
We regularly advise insurance companies, banks, Fortune 500 companies, trade associations, financial institutions, non-profit organizations, and governmental entities on plan design and compliance. Our clients include both plan sponsors and plan service providers.
We regularly advise our clients in connection with:
- Plan design and selection.
- Drafting and implementing all types of qualified plans.
- Providing ongoing advice regarding the day-to-day operation of all types of qualified plans, including compliance audits of qualified plans.
- Counseling clients with respect to technical issues and questions that may arise in connection with the designing, implementation, and operation of all types of qualified plans.
- Designing and maintaining equity and stock-based plans.
- Designing and maintaining individual retirement arrangements.
- Analyzing the Code and ERISA and applying relevant provisions to qualified plans.
- Obtaining IRS private letter rulings and determination letters regarding plan design and administration issues.
- Advising clients regarding bank collective trust funds, mutual funds, and variable insurance products.
- Designing customized insurance programs, including corporate and trust-owned life insurance and individual and group universal life insurance.
- Analyzing emerging legislation relevant to employee benefit plans.
- Evaluating service provider contracts.
- Developing solutions to problems in under-funded and over-funded plans.
- Drafting of employee communications.
- Counseling clients regarding correction of plan errors under the IRS correction procedure known as EPCRS.
- Advising clients on the use of qualified plans for workforce restructurings such as early retirement programs and downsizing.
- Advising on products and services for qualified plans.
Corporate Transactions
Our attorneys effectively and efficiently handle employee benefits considerations in connection with corporate transactions, including basic due diligence with respect to employment and benefit issues, and are adept at identifying documentary and substantive issues in a manner appropriate to the size of the transaction and the needs of the client. Such due diligence includes the identification and analysis of plan documents, trust agreements, insurance contracts, disclosure materials, employee handbooks, employment agreements and benefit claims and awards documentation. Beyond basic due diligence, we are experienced in crafting the language necessary for the employment and benefits provisions of deal documents, including representations, warranties and covenants. We are also expert in dealing with the difficult issues that frequently arise in corporate transactions with respect to employment and benefits, including: analysis and assistance in calculation of excess golden parachute payments under Code section 280G; analysis of stock option and other equity-based compensation and bonus programs, not only for 409A compliance, but also for the effect of such plans (and their acceleration provisions) on the capital and financial structure of the applicable deal; and assistance in the harmonization of the benefit plans of the buyer and seller, including where applicable, drafting documentation, government filings and participant disclosures necessary for freezing, terminating or merging employee benefit plans.
Treasury, IRS & DOL Practice
Our benefits attorneys have superb working relationships with key policymakers in Congress and at the IRS, Treasury, and DOL. These relationships stem from many years of practice in the employee benefits field in both the private and public sectors. Our attorneys use these contacts to help ensure that the government is working in the best interests of our clients. From obtaining private letter rulings to representing clients with respect to IRS and DOL audits, Crowell & Moring attorneys have a proven track record of obtaining results in our clients' favor.
We regularly assist clients with the following matters:
- Representing clients in dealings with the IRS (both national and field offices).
- Obtaining private letter rulings and technical advice, from drafting a request to dealing directly with the IRS attorney assigned to the matter.
- Representing clients before the IRS with regard to plan correction issues under EPCRS.
- Representing clients in connection with IRS examinations (both at the examination and appeals stages).
- Negotiating closing agreements with the IRS.
- Drafting legislative and regulatory proposals.
- Preparing highly technical analysis and comment for government officials.
- Helping witnesses prepare to testify.
- Keeping clients apprised of new regulatory and legislative materials in a timely manner.
Fiduciary Responsibility, Prohibited Transactions & Audits
The combination of our extensive experience with ERISA and our strong and longstanding relationships with policy-makers at the DOL and the IRS allows us to expertly advise our clients on the fiduciary and prohibited transaction requirements of ERISA. We advocate and advise plan sponsors as well as the key players in the plan service provider market.
In connection with ERISA fiduciary rules, we have expertise regarding:
- Fiduciary rules related to reporting and disclosure, plan expenses, identifying plan assets, and fee-based arrangements, such as commissions.
- Developing appropriate administrative and claims procedures.
- Reviewing the structure of investment management relationships and allocation of fiduciary duties, investment deals and guidelines.
- Advising clients on benefits-related developments at the major federal agencies, including the SEC and DOL.
- Helping clients with IRS and DOL audits.
ERISA Reporting & Disclosure
Our attorneys have significant experience analyzing and applying ERISA's reporting and disclosure rules to a vast array of retirement and health and welfare plans. Whether your plan requires drafting of employee communications or determining applicable reporting obligations, we are ready to help you.
We regularly assist clients regarding their ERISA reporting and disclosure obligations, including in connection with the following:
- Advising clients on reporting and disclosure obligations generally.
- Drafting employee communications, including summary plan descriptions (SPDs), summaries of material modifications (SMMs), qualified default investment alternatives (QDIA) notices, COBRA notices and various other plan-related communications, including both individualized and general communications.
- Preparing required "top hat" plan statements and annual Forms 5500.
- Counseling clients regarding plant shut-down notice requirements and plan termination notices.
ERISA Title IV & Plan Terminations
Our attorneys have significant experience advising clients on issues pertaining to Title IV of ERISA, including PBGC premiums, multiemployer plan withdrawal liability, and plan terminations. They regularly provide counsel to our clients regarding plan terminations, including with respect to: the use of individual and group annuity contracts to secure promised benefits; reportable events; and issues related to plan spin-offs and asset recapture. Our attorneys also regularly counsel clients on issues with respect to PBGC flat-rate and variable-rate premium issues. Additionally, our attorneys counsel clients on methods to manage multiemployer plan withdrawal liability, both before and after such liability is assessed.
Tax-Exempt & Governmental Plans
Crowell & Moring attorneys understand the unique considerations that apply to both tax-exempt and governmental plan sponsors. We work hard to take these considerations into account when we counsel our tax-exempt and governmental clients with respect to their benefit arrangements.
Our attorneys have significant experience advising tax-exempt and governmental clients regarding both their retirement and welfare benefit plan issues. Thus, we are ready and able to provide effective counsel to our clients not just on "bread and butter" retirement and pension plans (such as 403(b), 457(b), and non-governmental 401(k) plans), but also with respect to executive compensation arrangements (such as 457(f) plans) and health and welfare plans, including retiree health arrangements and the use of medical savings accounts such as FSAs, HRAs, and HSAs. Moreover, our attorneys regularly practice before IRS, Treasury, and DOL with respect to tax-exempt and governmental plan issues. Accordingly, Crowell & Moring attorneys are well-positioned to provide comprehensive counsel regarding the issues that confront sponsors of tax-exempt and governmental plans.
Fringe Benefits
Crowell & Moring attorneys regularly advise employers on the tax treatment of fringe benefits. Specifically, we counsel clients with respect to planning, implementing and maintaining programs in connection with the following fringe benefits:
- Expense reimbursements and per diem arrangements.
- Qualified transportation benefits.
- Meals and lodging.
- Vacation and paid time off.
- Employee awards, prizes and gift certificates.
- Adoption assistance and educational assistance.
In addition to the foregoing, our attorneys have comprehensive knowledge of the fringe benefit rules governing: employer-provided housing assistance, moving expenses, and relocation loans (including below-market interest loans); company athletic facilities and cafeterias; company-provided automobiles and cellular telephones; and the use of corporate aircraft.
Employment Taxes
Crowell & Moring attorneys advise clients on the myriad of IRS reporting and withholding obligations that apply with respect to employee benefit plans. The issues include, among others:
- Internal compliance audits.
- Resolving adverse proposed tax adjustments with the IRS.
- Form W-2 and Form 1099 reporting.
- Payroll tax consequences of mergers, acquisitions and reorganizations.
- Payroll tax and reporting obligations regarding executive compensation.
- State withholding and reporting issues.
- Independent contractor agreements.
- Co-employee arrangements
- Worker reclassification issues and audits.