Our Practice. Does Your Cafeteria Plan Need to Be Amended Before Year-End? Contact DECEMBER 2015

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1 DECEMBER 2015 Does Your Cafeteria Plan Need to Be Amended Before Year-End? Author, James P. Cowles*, Atlanta , As background, before 2014, an employee s election to enroll in his or her employer s health plan pursuant to a cafeteria plan was irrevocable for the entire plan year, unless the employee incurred an event that affected his or her eligibility for the health plan. The most common events affecting health plan eligibility are marriage, divorce, birth of a child and a change in employment from full-time to part-time. In 2014, the IRS added two new events that allow employees to cease participation in their employer s health plan, that is not a health flexible spending arrangement, and that provides minimum essential coverage pursuant to the employer s cafeteria plan. This is allowed in order to purchase insurance under a qualified health plan through a competitive marketplace established under the Affordable Care Act, commonly referred to as an exchange or health insurance marketplace (a Marketplace ), even if the employee does not have an event that affects his or her health plan eligibility. Employers were permitted to incorporate these new events into plan operation as early as 2014, but an official plan amendment was not required at that time. The two new events added by the IRS in 2014 generally are as follows: The first event affects employers who have adopted the look-back measurement period for determining full-time status under the Affordable Care Act. Generally, this means that an employee who averages 30 or more hours of service weekly in the prior 12 month measurement period is considered a full-time employee, and eligible for health care coverage, in the following 12 month period. For example, if an employee satisfies the 30 hours of service requirement in 2014, he or she would be deemed a full-time employee in 2015 and be eligible for health care coverage under the cafeteria plan. Our Practice We advise public, private, taxable and tax-exempt clients on a wide variety of issues related to the design, preparation, communication, administration, operation, merger, split-up, amendment and termination of all forms of employee benefit plans and executive compensation programs and related funding vehicles. The firm has defended clients in significant high-profile ERISA litigation matters, including 401(k) plan stock drop cases and other breach-offiduciary-duty class actions. Contact Kenneth A. Raskin Chair of the Employee Benefits & Executive Compensation Practice New York kraskin@kslaw.com Page 1 of 14

2 Under the new rule, an employee who is deemed to be full-time (in our example, completed 30 or more hours of service per week in 2014 and is deemed full-time in 2015) can elect to cease participation in his or her employer s health plan pursuant to the cafeteria plan if his or her hours or service are reduced to 30 hours of service or less per week. Employees that elect to cease participation in their employer s health plan must represent to their employer that they will enroll in another health plan within two months of ceasing participation in their employer s plan. Second, an employee may elect to cease participation in his or her employer s health plan coverage pursuant to the cafeteria plan when the employee is eligible for either (a) special enrollment in the Marketplace or (b) enrollment during the Marketplace open enrollment period. Similar to the first event described above, an employee that elects to cease participation in his or her employer s health plan must represent to his or her employer that he or she will enroll in a health plan that provides minimum essential coverage under the Marketplace immediately. This permits an employee to purchase coverage through a Marketplace without it resulting either in a period of duplicate coverage under the employer s group health plan and the coverage purchased through a Marketplace or in a period of no coverage. Employers are not required to allow employees to cease participation. Also keep in mind that employees may still elect to cease or change their participation in their employer s health plan if they have an event that affects their eligibility for health benefits (e.g. marriage, divorce, birth of a child and a change in employment from full-time to part-time) Employers that have already incorporated these two new events into their cafeteria plan operation have until the last day of the cafeteria plan s 2015 plan year to amend their cafeteria plan to reflect the new rules. If you have any questions, or need help amending your cafeteria plan, King & Spalding will be glad to assist you. *Non-lawyer Employee Benefits Consultant Buyer Beware! Purchasers in Asset Sales Liable for Multiemployer Pension Plan Withdrawal Liability Author, Mark Kelly, Atlanta, , mkelly@kslaw.com Two recent appellate court decisions have made it easier for multiemployer pension plans to impose withdrawal liability on a purchaser in an asset deal. In Tsareff v. ManWeb Services, Inc., the Seventh Circuit expanded its existing successor liability doctrine, holding that successor liability may be imposed on a buyer, even if withdrawal liability is contingent and the amount was not known to the buyer before the sale. Perhaps more troubling for potential buyers is that the Ninth Circuit has joined the parade successor withdrawal liability in an asset sale was upheld in Resilient Floor Covering Pension Trust Fund Board of Trustees v. Michaels Floor Covering, Inc. In Tsareff v. ManWeb Services, Inc., a unionized electrical contractor ( Tiernan ) was required to make contributions to a multiemployer pension fund (the Fund ). After selling its assets to a non-union employer ( ManWeb ), Tiernan ceased operations and all contributions to the Fund. The Fund determined that the asset sale resulted in Tiernan s complete withdrawal from the Fund and assessed withdrawal liability against Tiernan. Neither Tiernan nor ManWeb sought review Page 2 of 14

3 or arbitration of the withdrawal liability assessment. The Fund s trustees filed suit to collect the assessment, and added ManWeb as a defendant under a successor liability theory. Under Seventh Circuit precedent, successor liability may be imposed in an asset sale with respect to the seller s multiemployer pension plan withdrawal liability, where (1) the purchaser had notice of the claim before the acquisition, and (2) there was substantial continuity in the operation of the business before and after the sale. The district court found that pre-acquisition notice of contingent liabilities was not sufficient to satisfy the notice requirement. Since the Fund did not assess the amount of withdrawal liability until after the asset purchase, ManWeb did not have sufficient notice and was not liable under a successor liability theory. The Seventh Circuit reversed, finding that notice of either existing or contingent liabilities is sufficient to satisfy the notice requirement, and that ManWeb s notice of contingent liability could be both reasonably inferred and directly proven by evidence in the record. Because the asset purchase agreement showed that ManWeb was aware of the seller s contingent withdrawal liability and knew about the risk of withdrawal liability, the Seventh Circuit remanded the case to the district court to determine whether there was substantial continuity in the operation of the business before and after the sale sufficient to support a claim for successor liability. In Resilient Floor Covering Pension Trust Fund Board of Trustees v. Michaels Floor Covering, Inc., a construction industry employer named Studer s Floor Covering, Inc. ceased doing business on December 31, 2009 and stopped making contributions to a multiemployer pension fund (the Plan ). As Studer s was winding down, one of the company s longtime salesmen incorporated a new company, Michael s Floor Covering, Inc., and began bidding directly on projects. Michael s leased the Studer s storefront and warehouse, took over Studer s business telephone number and hired five of Studer s former employees. At auction, Michael s purchased about 30 percent of Studer s tools, equipment and inventory. Studer s did not sell or otherwise assign its customer lists or customer information to Michael s. Rather, Michael s used existing business relationships developed over the course of the owner s 19 years as a salesman for Studer s. Michael s never made any contributions to the Plan because it was a non-union employer. In general, when an employer withdraws from a multiemployer pension plan, it will be liable to the plan for withdrawal liability. However, under a special exception applicable to the construction industry, no withdrawal liability is imposed on construction businesses that close and do not resume operations within the jurisdiction of the bargaining agreement for at least five years. The dispute in this case concerned whether or not the construction industry exception applied. The Plan argued that the exception did not apply because Michael s essentially took over the work Studer s would have done, and therefore was Studer s successor. After a bench trial, the district court held that Michael s was not liable for Studer s withdrawal liability under the successorship doctrine. On appeal, the Ninth Circuit reversed, holding for the first time that a successor employer in an asset sale can be liable for a seller s multiemployer pension withdrawal liability. The Ninth Circuit found that the district court did not properly identify or weigh the successorship factors. First, and most significantly, the district court did not give prime consideration to market share capture (i.e., the portion of Studer s business or body of customers that Michael s retained). The Ninth Circuit agreed with the Plan that the focus should be on the relative amount of revenue generated by Studer s former customers, rather than a simple headcount of customers. The Ninth Circuit also found that the district court erred when it analyzed workforce continuity; it held that the appropriate test is whether a majority of the new Page 3 of 14

4 workforce once worked for the old employer, not whether Michael s employed a majority of Studer s former workforce. In addition, the Ninth Circuit stated that the workforce continuity test should only include those employees as to whom pension fund contributions would be due. The Ninth Circuit remanded the case to the district court to reconsider whether there was substantial continuity in the operation of the business before and after the sale in light of the successorship factors discussed by the appellate court. Conclusions Given that two circuit courts now agree that buyers in an asset sale can be liable for the seller s multiemployer pension plan withdrawal liability, multiemployer plans will be emboldened to assert successor liability claims in other jurisdictions. Buyers need to be aware that this area of law is developing. To reduce the risk that they could be saddled with a seller s withdrawal liability, buyers should consider one or more of the following actions when negotiating an asset purchase agreement: Negotiate a purchase price reduction based on the anticipated withdrawal liability. Require the seller to retain funds in escrow pending final assessment by the multiemployer plan. Include an indemnity provision that obligates the seller (and/or seller s affiliates) to pay any withdrawal liability imposed on the buyer. Require seller to notify buyer of any multiemployer plan withdrawal liability assessment so that the opportunity to contest the assessment is not unintentionally waived. Where available, consider pursuing the asset purchase in bankruptcy; Bankruptcy Code Section 363 may provide some protection against successor liability claims since debtors can sell property free and clear of certain claims, subject to court approval. King & Spalding is available to assist you with your purchase or sale transactions and the resolution of any multiemployer pension plan withdrawal liability issues that arise in connection with such transactions Filing and Notice Deadlines for and Health and Welfare Author, Ryan Gorman, Atlanta, , rgorman@kslaw.com Employers and plan sponsors must comply with numerous filing and notice deadlines for their retirement and health and welfare plans. Failure to comply with these deadlines can result in costly penalties. To avoid such penalties, employers should remain informed with respect to the filing and notice deadlines associated with their plans. The filing and notice deadline table below provides key filing and notice deadlines common to calendar year plans for If the due date falls on a Saturday, Sunday, or legal holiday, the due date is generally delayed until the next business day. Please note that the deadlines will generally be different if your plan year is not the calendar year. Please also note that the table is not a complete list of all applicable filing and notice deadlines (including any available exceptions and/or Page 4 of 14

5 extensions), just the most common ones. King & Spalding is happy to assist you with any questions you may have regarding compliance with the filing and notice requirements for your employee benefit plans. Deadline Item Action Affected January 15 Transitional Reinsurance Fees Deadline for self-insured group health plans to pay the entire transitional reinsurance fee for 2015 or to pay the first installment of such fees. The deadline for determining how many covered lives apply for purposes of this fee, and to submit the annual enrollment count, was November 15, If the entity chooses to pay the entire fee, it must pay $44.00 for each covered life no later than this date. If the entity chooses to pay in two separate installments, it must pay $33.00 for each covered life by this date and pay the remaining $11.00 for each covered life by November 15, Self-insured Group Health (including retiree plans) January 31 IRS Form 945 Deadline for employer to file IRS Form 945 to report income tax withheld from qualified plan distributions made during the prior plan year. However, the deadline may be extended to February 10 if taxes were timely deposited during the prior plan year. IRS Form 1099-R Deadline for employer to distribute IRS Form 1099-R to participants and beneficiaries who received a distribution (including a direct rollover) during the prior plan year. This includes a direct rollover from a Plan. IRS Form W-2 Cycle E Determination Letter Applications Deadline for employers to distribute Form W-2, which must reflect aggregate value of employer-provided employee benefits (e.g., cost of coverage, imputed income for group-term life insurance, employer Health Savings Account Contributions, etc.). Deadline for employers having Taxpayer Identification Numbers ending in 5 or 0 and governmental plans to apply for an IRS determination letter with respect to their. Health and Welfare and Governmental include all defined benefit and defined contribution plans that are intended to satisfy Internal Revenue Code 401(a). Page 5 of 14

6 Deadline Item Action Affected Quarterly Fee Disclosure February 14 (within 45 days after the close of the fourth quarter of previous plan year) Benefit Statements for Participant- Directed Deadline for plan administrator to disclose fees and administrative expenses deducted from participant accounts during the fourth quarter of the previous plan year. Note that the quarterly fee disclosure may be included in the quarterly benefit statement or as a stand-alone document. Deadline for plan administrator to send fourth quarter benefit statement for previous plan year to participants in participant-directed defined contribution plans. that allow participants to direct investments February 29 (if filing paper forms) IRS Form 1099-R Deadline for employer to file IRS Form 1099-R. If the form is filed electronically, the deadline can be extended until March 31. March 1 (60 days after the beginning of the plan year) Medicare Part D Creditable Coverage Disclosure Deadline for employers that provide prescription drug coverage to Medicare Part D eligible individuals to disclose to the Centers for Medicaid and Medicare Services (CMS) whether the coverage is creditable prescription drug coverage by completing the Online Disclosure to CMS Form at Coverage/CreditableCoverage/CCDisclosureForm.htm l Health and Welfare that provide prescription drug coverage to Medicare Part D eligible individuals March 15 Plan Contribution Deadline Deadline for corporate employer contributions to be made to plan trusts in order for such amounts to be deductible on corporate tax returns (assuming the employer is operating on a calendar-year fiscal year). Note that this deadline may be extended if an extension is obtained for the corporate tax return. March 15 (2 ½ months after the plan year) Excess Contributions Deadline for plan administrator to distribute any excess contributions and earnings from the prior year to avoid 10% excise tax on employer (other than eligible automatic contribution arrangements (EACAs)). 401(k) Other Than EACAs March 31 (last day of 3rd month following the end of the prior plan year) Certification of Adjusted Funding Target Attainment Percentage (AFTAP) Deadline for actuary to certify AFTAP to avoid presumption that AFTAP is 10 points less than prior year AFTAP. Defined Benefit Page 6 of 14

7 Deadline Item Action Affected March 31 IRS Form 1095-B Individual Statements Deadline for providers of minimum essential coverage to distribute forms used to report to responsible individuals the months during the year that the individuals satisfied the individual mandate by enrolling in minimum essential coverage. This deadline was extended from its original deadline of January 31. Note that self-insured plan sponsors that employed an average of at least 50 full-time employees in 2015 (also known as Applicable Large Employers or ALEs ) can report this information on Form 1095-C. Fully insured plan sponsors that are not ALEs are not required to distribute Form 1095-B, which are distributed by the group health plan insurers. Self-Insured Group Health and Group Health Plan Insurers IRS Form 1095-C Individual Statements Deadline for ALEs to report to provide a written statement to employees indicating whether the ALEs offered an opportunity to enroll in (and whether the employee did enroll in) minimum essential coverage under the ALE s sponsored plan. This deadline was extended from its original deadline of January 31. Applicable Large Employers April 1 Age 70 ½ Distribution Requirements Deadline for plan administrator to distribute prior year s required minimum distribution for any terminated employee who reached age 70 ½ or older during the prior year. April 15 Excess Deferrals Deadline for plan to distribute prior year s deferrals in excess of Internal Revenue Code (IRC) 402(g) annual dollar limit and related earnings. 401(k) April 15 (105 days after the end of the plan year) PBGC 4010 Filing Deadline for contributing sponsors (and each controlled group member) to file PBGC Form 4010 if: 1) Any single-employer plan in the contributing sponsor s controlled group had a prior year AFTAP of less than 80%; 2) Any single-employer plan in the contributing sponsor s controlled group fails to make a required installment or other required payments to a plan, and as a result, a lien is imposed pursuant to ERISA section 303(k)(1) or IRC section 430(k)(1); or 3) The IRS has granted funding waivers of more than $1 million to any single-employer plan in the contributing sponsor s controlled group and any portion of such waiver is still outstanding. Defined Benefit Page 7 of 14

8 Deadline Item Action Affected Annual Funding Defined Benefit Notice April 29 (no later than 120 days after the end of the plan year) Deadline for the plan administrator to provide a plan funding notice to the PBGC, to each plan participant and beneficiary and to each employer that has an obligation to contribute under the plan. May 14 (within 45 days after the close of the first quarter of plan year) Benefit Statements for Participant- Directed Deadline for plan administrator to send benefit statement for the first quarter of the plan year to participants in participant-directed defined contribution plans. that allow participants to direct investments Quarterly Fee Disclosure Deadline for plan administrator to disclose fees and administrative expenses deducted from participant accounts during the first quarter of the plan year. Note that the quarterly fee disclosure may be included in the quarterly benefit statement or as a stand-alone document. May 15 (the 15 th day of the 5 th month after the end of the plan year) IRS Forms 990 and 990-EZ Deadline for tax-exempt trusts associated with qualified retirement plans and voluntary employee beneficiary associations (VEBAs) to file Forms 990 or 990-EZ with the IRS for prior year. A 3-month extension may be obtained by filing a Form 8868, which must be filed by this date. Voluntary Employee Beneficiary Associations May 31 (if filing paper forms) IRS Form 1094-B Transmittal Forms Deadline for providers of minimum essential coverage to transmit forms to IRS reporting the months during the year that individuals enrolled in the group health plan satisfied the individual mandate by enrolling in minimum essential coverage. This deadline was extended from its original deadline of February 29. Self-Insured Group Health and Group Health Plan Insurers IRS Form 1094-C Transmittal Forms Deadline for ALEs to transmit forms to IRS reporting whether the ALEs offered an opportunity to enroll in (and whether employees did enroll in) minimum essential coverage under the ALE s sponsored plan. This deadline was extended from its original deadline of February 29. Applicable Large Employers June 30 (last day of 6 th month following the plan year) Excess Contributions Deadline for plan administrator to distribute EACA excess contributions and earnings from the prior year to avoid 10% excise tax. 401(k) with EACA Page 8 of 14

9 Deadline Item Action Affected IRS Form 1094-B Transmittal Forms June 30 (if filing electronically) Deadline for providers of minimum essential coverage to transmit forms electronically to IRS reporting the months during the year that individuals enrolled in the group health plan satisfied the individual mandate by enrolling in minimum essential coverage. This deadline was extended from its original deadline of March 31. Self-Insured Group Health and Group Health Plan Insurers IRS Form 1094-C Transmittal Forms Deadline for ALEs to transmit forms to IRS electronically reporting whether the ALEs offered an opportunity to enroll in (and whether employees did enroll in) minimum essential coverage under the ALE s sponsored plan. This deadline was extended from its original deadline of March 31. Applicable Large Employers July 28 (no later than 210 days after the end of the plan year in which the change was effective) Summary of Material Modifications Deadline for plan administrator to distribute summary of material modifications reflecting any changes to the summary plan description (SPD) arising from any plan amendments adopted during prior year (unless a revised SPD is distributed that contains the modification). Retirement Health & Welfare July 31 (the last day of the 7th month following the plan year) DOL Form 5500 Deadline for plan administrator to file Form 5500 (Annual Return/Report of Employee Benefit Plan) for prior year. This deadline is extended 2 ½ months if the plan administrator files Form IRS Form SSA Deadline for plan administrator to file Form 8955-SSA (Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits). This deadline is extended by 2 ½ months if the plan administrator files a Form Retirement Health and Welfare Retirement July 31 Patient Centered Outcomes Research Institute (PCORI) Fee Deadline for self-insured health plans to pay a fee for 2015 plan year using IRS Form 720. Note that the fee is not tax deductible. Insurers are responsible for paying the fee on behalf of insured plans. Self-Insured Group Health (including retiree plans) August 14 (within 45 days after the close of the second quarter of plan year) Benefit Statements for Participant- Directed Deadline for plan administrator to send benefit statement for the second quarter of the plan year to participants in participant-directed defined contribution plans. with participant-directed investments Page 9 of 14

10 Deadline Item Action Affected Quarterly Fee Disclosure Deadline for plan administrator to disclose fees and administrative expenses deducted from participant accounts during the second quarter of the plan year. Note that the quarterly fee disclosure may be included in the quarterly benefit statement or as a stand-alone document. August 15 (the 15 th day of the 8 th month after the end of the plan year) August 30 September 15 (8 ½ months after the end of the plan year) September 30 (within 9 months of the end of the plan year) September 30 (last day of the 9th month following the end of the prior plan year) October 15 IRS Forms 990 and 990-EZ Comparative Chart of Investment Alternatives Minimum Contribution Deadline Summary Annual Report (SAR) Certification of Adjusted Funding Target Attainment Percentage (AFTAP) Medicare Part D Creditable Coverage Notice to Individuals Deadline for tax-exempt trusts associated with qualified retirement plans and voluntary employee beneficiary associations (VEBAs) to file Forms 990 or 990-EZ with the IRS for prior year if the trustee obtained a 3-month extension by filing a Form Deadline for plan administrator to furnish the 2016 comparative chart of investment alternatives. Deadline for plan administrator to contribute balance of minimum contributions necessary to avoid a funding deficiency. Deadline for plan administrator to distribute Summary Annual Report for prior year to participants and beneficiaries. This deadline may be extended until 2 months following the close of the extension period for filing a Form 5500, if applicable. Deadline for actuary to certify AFTAP to avoid presumption that AFTAP is less than 60%. Deadline for employers that provide prescription drug coverage to Medicare Part D eligible individuals to provide a written disclosure notice to Medicare eligible individuals and their dependents covered under the plan indicating whether their prescription drug coverage is creditable coverage. Voluntary Employee Beneficiary Associations with participant-directed investments Defined Benefit Health and Welfare (unfunded welfare plans are exempt) Defined Benefit Health and Welfare that provide prescription drug coverage to Medicare Part D eligible individuals October 15 (2 ½ months after extension granted) DOL Form 5500 Deadline for plan administrator to file Form 5500 for prior year if deadline was extended by filing a Form Retirement Health and Welfare Page 10 of 14

11 Deadline Item Action Affected IRS Form Deadline for plan administrator to File Form Retirement SSA SSA if deadline was extended by filing a Form October 15 (9 ½ months after the previous plan year) November 1 (by the first day of open enrollment) PBGC Premium Filing Summary of Benefits and Coverage for Health that Require Reapplication Deadline for plan administrator of large plans (500 or more participants) to pay flat-rate or variable PBGC premium for current plan year. Deadline for group health plan administrator (for selfinsured plans) or group health plan administrator or insurer (for fully insured plans) to provide a Summary of Benefits Coverage (SBC) if written application materials are required for renewal. Defined Benefit with 500 or more participants Group Health and Health Insurance Issuers November 14 (within 45 days after the close of the third quarter) Benefit Statements for Participant- Directed Deadline for plan administrator to send benefit statement for the third quarter of the plan year to participants in participant-directed defined contribution plans. with participant-directed investments Quarterly Fee Disclosure Deadline for plan administrator to disclose fees and administrative expenses deducted from participant accounts during the third quarter of the plan year. Note that the quarterly fee disclosure may be included in the quarterly benefit statement or as a stand-alone document. November 15 (the 15 th day of the 11 th month after the end of the plan year) IRS Forms 990 and 990-EZ Deadline for tax-exempt trusts associated with qualified retirement plans and voluntary employee beneficiary associations (VEBAs) to file Forms 990 or 990-EZ with the IRS for prior year if the trustee obtained a second 3-month extension by filing a Form Voluntary Employee Beneficiary Associations November 15 Transitional Reinsurance Report and Second Installment Fee (if applicable) Deadline for sponsors of self-insured health plans (including retiree plans) to report the number of covered lives under the plan. If the entity chose to pay the 2015 fee in installments, it must pay the remaining $11.00 for each covered life by this date. Self-insured Group Health (including retiree plans) Page 11 of 14

12 Deadline Item Action Affected Safe Harbor 401(k) and Notice 401(m) December 1 (at least 30 but no more than 90 days before the beginning of the plan year) Deadline for plan administrator to distribute a notice of intent to use a safe harbor formula to participants and beneficiaries. This notice must be provided within a reasonable period of time before the beginning of the plan year. The regulations provide a safe harbor of not less than 30 days but not more than 90 days before the beginning of the plan year. Contingent Safe Harbor Notice Deadline for plan administrator to distribute a notice to participants and beneficiaries specifying that the plan may be amended during the following plan year to include a 3% employer non-elective safe harbor contribution. 401(k) and 401(m) Auto-Enrollment Notice Deadline for plan administrator to provide annual autoenrollment notice for plans with qualified automatic contribution arrangements (QACA) or eligible automatic contribution arrangements (EACA). This notice must be provided sufficiently early so that the employee has a reasonable period of time after receipt to make QACA or EACA elections. The preamble to the regulations notes that this timing requirement is deemed to be satisfied if the notice is given at least 30 days but not more than 90 days before the beginning of each plan year. 401(k) with QACA or EACA December 1 (at least 30 days before the end of the plan year) Qualified Default Investment Alternative (QDIA) Annual Notice Deadline for plan administrator to provide annual QDIA notice to participants or beneficiaries. with participant-directed investments December 1 (at least 30 days prior to the first day of the new plan or policy year) Safe Harbor Follow-Up Notice Summary of Benefits and Coverage for Health that Automatically Renew Coverage Deadline for plan administrator to distribute a notice to participants and beneficiaries informing them that the 3% employer non-elective safe harbor contribution will be made for the current plan year. This notice may be combined with the Contingent Safe Harbor Notice for the following plan year. Deadline for group health plan administrator (for selfinsured plans) or group health plan administrator or insurer (for fully insured plans) to provide a Summary of Benefits Coverage (SBC) if coverage automatically renews each year. 401(k) and 401(m) Group Health and Health Insurance Issuers Page 12 of 14

13 Deadline Item Action Affected Diversification Notice December 1 (no later than 30 days before participant becomes eligible to diversify employer stock) Deadline for plan administrator to provide diversification notice to participants who will first be eligible to divest employer securities on January 1. with participant-directed investments in employer stock December 15 (2 months after the extension for filing Form 5500) Summary Annual Report (SAR) Deadline for plan administrator to distribute SAR for prior year to participants and beneficiaries, if the IRS granted a 2-month extension for Form 5500 on or before the original Form 5500 deadline. December 31 (last day of plan year following plan year for which contributions were made) December 31 (last day of plan year) Correction of Excess Contributions & Excess Aggregate Contributions Discretionary Amendments Deadline for plan administrator to make corrective employer contributions or distribute excess contributions (ADP test failure) and excess aggregate contributions (ACP test failure) for the prior year. Deadline for plan sponsor to adopt discretionary plan amendments for calendar-year plans. 401(k) and 401(m) December 31 (at least annually) Adjusted Funding Target Attainment Percentage (AFTAP) Certification ERISA 404(c) Disclosures Deadline for actuary to certify a specific AFTAP if a range certification was previously issued. Deadline for plan administrator to distribute notices to participants and beneficiaries if the employer wants to limit fiduciary liability for participant-directed investment decisions. Defined Benefit with participant-directed investments Annual Fee Disclosure to Participants Deadline for plan administrator to make annual disclosure of certain fees for participant directed individual account plans to be provided to participants and beneficiaries. Pension Benefit Statements Deadline for plan administrator of a defined benefit plan using alternative notice for pension benefit statements to notify participants of availability of a pension benefit statement and instructions on how to obtain it. Defined Benefit Page 13 of 14

14 Deadline Item Action Affected December 31 (at least annually as a part of any yearly informational packet) WHCRA Notice Deadline for group health plans to distribute Women s Health and Cancer Rights Act (WHCRA) notice for new plan year to all participants and beneficiaries advising them of available mastectomy benefits under WHCRA and any deductibles and co-insurance limits applicable to such benefits. Health and Welfare December 31 Children s Health Insurance Program Reauthorization Act (CHIPRA ) Notice Required Minimum Distributions Deadline for employer to notify employees of potential opportunities for premium assistance from the state in which the employee resides. Deadline for plan administrator to distribute current year s required minimum distributions under IRC 401(a)(9). Group Health in states that provide premium assistance under Medicaid or CHIP Page 14 of 14

15 Employee Benefits & Executive Compensation Team Partners Kenneth A. Raskin Chair, Employee Benefits & Executive Compensation Practice Samuel S. Choy schoy@kslaw.com Counsel Donna Edwards dedwards@kslaw.com Mark P. Kelly mkelly@kslaw.com Associates Ryan Gorman rgorman@kslaw.com Consultant* James P. Cowles jcowles@kslaw.com Emily Meyer emeyer@kslaw.com Laura Westfall lwesftall@kslaw.com *Non-lawyer Employee Benefits Consultant About King & Spalding Celebrating more than 125 years of service, King & Spalding is an international law firm that represents a broad array of clients, including half of the Fortune Global 100, with 800 lawyers in 17 offices in the United States, Europe, the Middle East and Asia. The firm has handled matters in over 160 countries on six continents and is consistently recognized for the results it obtains, uncompromising commitment to quality and dedication to understanding the business and culture of its clients. More information is available at The contents of this newsletter and any attachments are not intended to be and should not be relied upon as legal advice. In some jurisdictions, this may be considered "Attorney Advertising." If you are not currently on our Employee Benefits & Executive Compensation Practice mailing list under your own name, and you would like to join to receive our monthly Compensation and Benefits Insights publication and to receive notices of future programs and occasional commentaries on new legal developments in the industry, you can make that request by submitting your full contact information to CBI@kslaw.com King & Spalding