Practice Contact

Brian M. Johnston
Practice Area Chair
T. 816.360.4319
William P. Sweeney
Practice Area Vice Chair
T. 312.873.3664

Related Practice Areas

Employee Benefits and Executive Compensation

Polsinelli Shughart PC has a deep bench of qualified Employee Benefits attorneys who cover all aspects of plan creation and design, plan compliance and executive compensation agreements. Collectively our attorneys have more than 100 years of combined employee benefits expertise, providing practical, proactive advice, while also striving to develop innovative solutions to all of your employee benefit needs.

In this increasingly complex area of compliance responsibility, with a multitude of different legal requirements under the Internal Revenue Code and the Employee Retirement Income Security Act, among other state and federal mandates, the team will work with you to not only minimize the risk of problems, but to develop a strategy for success. A key to such success lies in the development of initial advisory alerts, training programs, educational campaigns and regular internal memoranda that properly outline the compliance obligations as well as the elements of the organization’s successful usage of such arrangements.

Major Areas of Practice

Polsinelli Shughart employee benefit and executive compensation attorneys practice in the following areas:

Retirement plans
Welfare benefit plans
ERISA fiduciary duty and plan investment counseling
Employee stock ownership plans
ERISA and employee benefit plan litigation
Executive compensation

Retirement Plans

We design and implement pension, profit sharing, 401(k), 403(b), 457(b) and (f) plans, employee stock ownership, target benefit and stock bonus plans that are governed by ERISA and that qualify for certain tax benefits under the Internal Revenue Code. In each situation, we assist our clients in maximizing the design alternatives that may be unique to their industry or applicable tax status, but in all situations working to ensure the solution is the most practical alternative for that client’s specific situation. We are uniquely staffed with experienced attorneys and paralegals skilled in all aspects of plan drafting and compliance administration.

Welfare Benefit Plans

We provide compliance guidance and planning assistance to employers, managed care organizations, insurance companies, benefit funds, third-party administrators, trade associations, benefits consulting firms and others on a broad range of health and welfare matters, including the design and drafting of health plans, cafeteria plans, medical reimbursement arrangements and a variety of other welfare benefit plans. We also work with our clients to develop innovative approaches in a single-employer and multiple-employer framework, using health savings accounts, health reimbursement arrangements and other similar “consumer-driven healthcare” models, in addition to more traditional health plan arrangements in a self-funded or fully insured arena. With our established Washington, D.C. presence, we’re also able to provide immediate feedback on new health care initiatives that are being discussed in Congress, as well as quickly assist our clients with implementation of compliance processes relating to initiatives such as the “COBRA Subsidy” guidelines passed in February of 2009.

ERISA Fiduciary Duty and Plan Investment Counseling

Employers, trustees and other plan service providers regularly seek our advice on ERISA's fiduciary duty and prohibited transaction rules. We counsel clients on the fiduciary duty and prohibited transaction aspects of plan operations, including the investment of plan assets, the engagement of plan service providers and the proper handling of claims disputes. We advise plan sponsors and financial institutions on structuring investment management and advisory relationships, on designing financial services products, and on securing real estate and other asset-type portfolios and products to comply with ERISA's fiduciary provisions. When necessary, we assist clients in obtaining advisory opinions from the Department of Labor.

Employee Stock Ownership Plans

Our attorneys work closely with employers, both small and large, to introduce and maintain employee stock ownership as a key employee benefit. Employee Stock Ownership Plans are qualified plans designed to invest primarily in qualifying employer securities in a tax-advantaged manner. We advise our ESOP clients with respect to the complex fiduciary and qualification issues that arise with respect to ESOPs, as well as assist in the design and set-up of ESOPs for companies that have ranged in size from as few as 25 employees to public companies of more than 50,000 employees. When appropriate, we also advise on, design and assist in implementing Employee Stock Ownership Funds, which take advantage of the eligible individual account plan provisions of ERISA and the Internal Revenue Code, while at the same time avoid the complication of pass-through voting, required stock distribution and uniform allocation formulas of ESOPs.

ERISA and Employee Benefit Plan Litigation

In today’s increasingly litigious society, our group has assisted many of its for-profit and nonprofit clients in defending unwarranted claims against the organization and its plan fiduciaries. At the present time we are assisting a nonprofit health care facility, and its qualified defined benefit pension plan to defend a denial of benefit claim made by a surviving child of a deceased employee who did not elect for successor benefit coverage prior to her date of death.

Executive Compensation

Polsinelli Shughart has wide-ranging experience with numerous types of executive compensation arrangements for corporations, commonly known as non-qualified deferred compensation arrangements. Our practice covers the tax, securities law and ERISA aspects (if any) of a variety of arrangements, including maintaining compliance with Internal Revenue Code Section 409A, for a variety of employment agreements, severance arrangements, “golden parachutes," stock options, phantom stock, excess benefit plans, supplemental executive retirement plans, and other incentive compensation arrangements. This includes assisting our clients in establishing “reasonable compensation” limits, and identification of other compensation amounts to “incentivize” employees to align their goals with those of the company.

Other Areas of Specialty

Aside from the core practice services we provide, as summarized above, the employee benefit and executive compensation group at Polsinelli Shughart also provides support to other practice areas within the firm on an as-needed basis. A sampling of these other service areas includes:

Asset Protection - The firm represents executives, professionals and other individuals who are concerned about exposure of their personal assets to various kinds of liability. Our asset protection consulting practice involves the consultation with lawyers in our employee benefits and executive compensation group, as well as the corporate finance, financial restructuring and wealth planning groups to ensure the needs of each client are properly protected. Asset protection consulting includes analysis and review of the assets of the individual and the development of techniques to protect assets, such as utilization of qualified plans, partition and division of assets, establishment of trusts for children and family members, estate planning, or formation of corporations or associations.

Mergers and Acquisitions - A number of our clients have been involved in corporate mergers and/or acquisitions. Such transactions require careful evaluation of both parties' employee benefits/executive compensation programs, as well as negotiation and planning with respect to the treatment of such programs in the structure of the transaction. As such, a coordinated approach typically includes not only members of our corporate group, but often involves discussions with members of our tax group, corporate finance group, labor and employment groups, as well as other groups, as applicable.

Estate and Wealth Planning - Together with our wealth planning group, we also counsel executives with respect to the estate planning aspects of executive compensation programs and applicable distributions from their qualified retirement plans and individual retirement accounts.

Notable Experience

The Employee Benefits team has developed new approaches to traditional retirement plan designs and executive compensation arrangements that maximize the organization’s retirement contribution opportunities, but minimize cash flow obligations, including:

Developed unique combinations of qualified and non-qualified retirement plans, to maximize IRS contribution limitations but minimize the impact to all employee populations within allowable non-discrimination standards
Created qualified retirement plan vehicles that utilize employer stock investments without compliance challenges experienced under traditional employee stock ownership plan (ESOP) arrangements
Devised cost effective health care delivery arrangements for clients in the health and welfare area, on a self-insured and fully insured basis, factoring in applicable state and federal legal requirements wherever necessary
Coordinated ad hoc benefit review committees and request for proposal processes for union/non-union entities to evaluate existing defined benefit pension and 401(k)/profit sharing plan arrangements and develop streamlined plan designs that minimize investment and administrative plan costs while also increasing participation and employee education opportunities

Relevant and notable contributions the team has made, or is currently working on, in the industry include:

Completed more than 200 retirement plan restatements and completed filings with the Internal Revenue Service by April 30, 2010, deadline to maintain compliance with ongoing requirements of the Internal Revenue Code
Assisted a more than 60,000 employee organization with the development of internal policies and procedures and follow-up training seminars for more than 200 human resource and employee benefits personnel when the HIPAA Privacy rules became effective in 2003. By proactively working with the organization to identify information flow, and appropriate gap analyses before the new regulatory guidelines were required, we were able to not only help bring the client into compliance with the law, but also helped to develop procedural efficiencies that eliminate excess and duplicative information flow throughout this process
Coordinated a 2,300 employee organization’s efforts to implement HIPAA-compliant employee wellness initiatives that were successfully approved by the organization’s 13 union representatives, management and board authorities. The program has now been in operation for more than five years and has assisted the employer with not only significant reduction in long-term health care costs but also created improved employee morale in challenging economic periods
Provided guidance on ERISA's fiduciary duty and prohibited transaction rules in all aspects of plan operations, including the investment of plan assets, the engagement of plan service providers and the proper handling of claims disputes
Provided advice on the development of appropriate investment management and advisory relationships to mitigate fiduciary risk
Assisted with the implementation of financial services products, and other asset-specific portfolios and products to comply with ERISA's fiduciary provisions
Routinely conducted due diligence processes during merger, sale or acquisition scenarios to evaluate ongoing or successor liability issues for existing employee benefit arrangements.
Evaluated ongoing defined benefit pension funding obligations for ongoing frozen plan situations and when necessary, interfaced with the Internal Revenue Service and Pension Benefit Guaranty Corporation regarding applicable plan funding arrangements and notice requirements
Prepared and filed a private letter ruling application with the Internal Revenue Service for a client that wishes to have favorable status recognized for its retirement plans, and have made voluntary compliance filings with the IRS for a separate tax-exempt entity.
Working with the IRS National Office on separate private letter filings for tax-exempt status for retiree health programs of eight separate governmental organizations

Lastly, in today’s increasingly litigious society, the Employe Benefits group has assisted many of its for-profit and non-profit clients in defending unwarranted claims against the organization and its plan fiduciaries. We successfully assisted one client defend a denial of benefit claim made by a surviving child of a deceased employee who did not elect for successor benefit coverage under the organization’s defined benefit pension plan prior to her date of death. We also had another client’s potential claim dismissed when the court agreed our client was not responsible for the claimant’s damages for unpaid health insurance claims under a separate employer’s plan.

A sampling of other successful outcomes we have delivered for our clients include:

Obtained summary judgment for the Plan, Plan Sponsor and Third-Party Administrator in a long-term disability case involving a claim of several hundred thousand dollars, in U.S. District Court for the Northern District of Florida
Defended a multinational Fortune 100 Corporation in a suit brought by two former executives seeking over $20 million under an ERISA "top hat" plan that was ultimately dismissed
Represented the Plan, Plan Sponsor and Plan Administrator on remand from the U.S. Supreme Court in a landmark COBRA case
Successfully represented a 401(k) plan fiduciary and plan participant in litigation involving claims over mismanagement of the 401(k) plan

News

July 28, 2010	Polsinelli Shughart Expands Employee Benefits & Executive Compensation Practice to Help Meet Clients’ Corporate Compliance Needs
July 20, 2010	The St. Louis Business Journal Selects Polsinelli Shughart Attorney Courtney Brunsfeld as a 30 Under 30 for 2010

Newsletters & E-Alerts

January 20, 2012	HHS Declines to Broaden Religious Employer Exemption for Preventive Services Coverage Mandate Today (January 20, 2012), the U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced it is declining to broaden an exemption for mandatory contraceptive coverage required for non-grandfathered group health plans as part of the Patient Protection and Affordable Care Act (PPACA), but with a limited extension for qualifying religious organizations to delay implementation for another year— until August 1, 2013 — to allow more time for those employers to comply with the new law.
December 16, 2011	Year-End Employee Benefit Plan Reminders As year-end approaches, employers should review their employee benefits plans to make sure they have been updated for any changes in the law or for any changes that have been implemented this year.
October 19, 2011	Employee or Independent Contractor? - New Issues and Opportunities for Compliance The Department of Labor (DOL), Internal Revenue Service (IRS) and several other state regulatory agencies recently announced a joint initiative that is designed to enable regulators to share information more freely and thus clamp down further on employers who misclassify employees as independent contractors.
July 6, 2011	New Proposed HIPAA Privacy Rule Impacts Disclosure Requirements The Department of Health and Human Services has released a notice of proposed rulemaking (NPRM) to implement the statutory requirement under the Health Information Technology for Economic and Clinical Health Act. HHS is seeking comments from the public through August 1, 2011, which will be considered by HHS prior to finalizing the new requirements.
March 14, 2011	Where Did Health Care Reform Go? In spite of media stories implying health reform law is well on its way to being “de-funded,” that is not the case. Congress is not repealing health reform legislation. A number of provisions and reductions of funding for programs are in store but the basic structure of the legislation will remain largely intact.
December 6, 2010	Complying with the New 2010 Reporting Requirements In November 2009, the IRS issued final regulations relating to the reporting and filing requirements under Section 6039 of the Internal Revenue Code of 1986, as amended (the Code) with respect to the exercise of incentive stock options (ISOs) and certain transfers of stock under an employee stock purchase plan (ESPP).
November 30, 2010	DOL's Final Word on What Participants and Plan Sponsors Need to Know About Fees The Department of Labor has released final rules on what disclosures are required to be made by qualified plan fiduciaries who offer participant-directed investments under a defined contribution plan.
November 19, 2010	409A Corrections: It's The Last 'Significant' Bite Of The Apple Revisiting executive compensation arrangements for Code Section 409A before the end of 2010 and identifying any potential documentation errors will allow you to avoid some significant IRS penalties.
September 21, 2010	IRS Employment Tax Audits Webinar: Getting Your Employee Plans and Policies in Order Since being forewarned is being forearmed, organizations should review their legal compliance in certain key employee plan areas and develop appropriate correction strategies if potential compliance issues are detected. Join us for a special Employee Benefits and Executive Compensation webinar October 19.
September 15, 2010	Reimbursement of Over-the-Counter Drugs: A Prescribed Solution? The Internal Revenue Service has released Notice 2010-59 regarding the reimbursement of over-the-counter medicines and drugs from health flexible spending arrangements (health FSAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs) effective January 1, 2011. Distributions from health FSAs, HRAs, HSAs and Archer MSAs will not be able to reimburse the cost of over-the-counter medicines or drugs unless they are prescribed by a physician.
August 31, 2010	COBRA Subsidy Expires - No Further Extensions? This e-Alert discusses what you need to do even though the COBRA subsidy has expired.
August 25, 2010	Losing Grandfathered Status - Should You Care? Although mandates created under the Patient Protection and Affordable Care Act are generally applicable to all group health plans, there are certain compliance exemptions for "grandfathered plans." Many employers are actually finding the costs of maintaining a grandfathered plan are more significant than the long-term impact of "losing" grandfather status in the process. The focus of this e-Alert is to identify the advantages and disadvantages of preserving grandfathered status.
June 18, 2010	eFAST Filing Has Arrived The Department of Labor and the Internal Revenue Service have joined forces in an effort to reduce costs to employee benefit plans. Annual return/report filings for 2009, with associated schedules and reports, including the annual plan audit, if required, have mandated electronic filing.
May 25, 2010	Health Care Reform Targets Retiree Health Plans The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, which were recently enacted, targets retiree health plans with new requirements and the potential of excise taxes. These reforms may discourage the adoption of new plans and result in the termination of existing plans.
October 22, 2009	IRS Issues Guidance on 2009 Required Minimum Distributions On September 24, 2009, the IRS issued Notice 2009-82, which provides guidance with respect to the waiver of 2009 required minimum distributions. Notice 2009-82 addresses many previously unanswered questions, and also provides sample amendments that may be used to bring plan documents into compliance with this guidance.
August 26, 2009	Employee Benefits and Executive Compensations Newsletter - August 2009 There are several year deadlines for benefit plans of which organizations should be aware and start planning for now, which are discussed in this most recent newsletter. Also discussed is the limited relief for retirement plans from the red flag reporting rules and an update on US health care.
February 26, 2009	COBRA Subsidies: A Stimulus for Immediate Employer Action Included in the recently enacted “American Recovery and Reinvestment Act” (the “Stimulus Package”) are a number of important requirements and opportunities for employers. The focus of this alert is related to an item of most urgency, the COBRA subsidy provisions, which become effective March 1, 2009. Additional newsletters and alert articles will be provided in the coming weeks related to some of the other employer-related programs that are also part of the Stimulus Package. You may also contact a member of the Employee Benefit/Executive Compensation Group for more information about the Stimulus Package in general.

Awards & Recognition

July 20, 2010

The St. Louis Business Journal Selects Polsinelli Shughart Attorney Courtney Brunsfeld as a 30 Under 30 for 2010