IRS Issues Same-Sex Marriage Guidance for Plan Sponsors. The much anticipated guidance from the IRS provides that all legal same-sex marriages must be recognized for all federal tax purposes, regardless of the laws in the state where the individual resides. To read more on how this impacts employee benefit plans, please visit our newly launched Benefits InSight blog. We will update HR Matters as additional guidance is issued, but if you can’t wait for our monthly newsletter, please watch for more frequent updates on Benefits InSight.
Failure to Provide COBRA Notices Results in $1.8 Million Penalty. A court recently ordered a large employer to pay $1.8 million in penalties for failing to ensure that its COBRA third party administrator provided COBRA election notices to terminated employees. The employer outsourced its payroll, benefits and COBRA administration to several TPAs. Due to glitches in the TPAs’ reporting systems, hundreds of terminated employees didn’t receive COBRA notices. The employer claimed that glitch was out of its control because it was made by TPAs. The court disagreed and held the employer responsible because it cannot completely delegate its duties and must monitor and evaluate all service providers. It’s like the head coach that goes for it on fourth and one. The coach is responsible if the running back fails to convert.