Covington’s employee benefits lawyers have many years’ experience with the design, funding, and administration of broad-based benefit plans. We help our clients update their benefit programs to keep them competitive and to meet the changing needs of their employees. We find practical solutions to the countless administrative issues that arise under tax-qualified retirement plans, health and welfare plans, and fringe benefit programs that cover a diverse and dynamic work force.
Defined Benefit Pension Plans
Covington provides advice on all aspects of defined benefit pension plans. We have helped a number of companies convert their traditional defined benefit plans to new designs, including cash balance, pension equity, and floor-offset plans. We have also helped our clients address vesting, nondiscrimination, and other issues that arise when they freeze or terminate their defined benefit plans.
Our wide-ranging practice brings us into daily contact with the latest design, regulatory, legislative, and litigation developments, and helps us anticipate future trends. In a world where defined benefit plans face rapidly evolving legal and business challenges, our success at shaping the law through legislation, regulations, and agency guidance can be of particular value to our clients.
Defined Contribution & 401(k) Plans
Employers increasingly rely on defined contribution plans to provide retirement benefits to their employees. As employers re-tool their defined contribution plans, they need the creative and business-oriented advice that Covington has provided to its employee benefits clients for more than forty years. We help our clients update their plans with features such as auto-enrollment, default investment elections, participant investment advice, and effective control of investment management and recordkeeping fees.
Health & Welfare Benefit Plans
We offer the same level of sophisticated representation in the areas of our practice that deal with welfare benefit plans. Our lawyers advise on a wide range of issues, including COBRA and HIPAA compliance, Medicare secondary payer liability, medical liabilities hidden in workers' compensation arrangements, voluntary employees' beneficiary associations (VEBAs), corporate-owned and trust-owned life insurance, and the special tax rules applicable to self-insured medical reimbursement plans.
Our recent assignments in the health & welfare area include:
- Advising a number of major employers as they integrate the new generation of health savings accounts into their existing health plan offerings.
- Advising a large public company on the ERISA and tax issues involved when it transferred excess reserves from a disability insurance policy to a VEBA.
- Favorably resolving a number of tax issues raised during an IRS examination of a group universal life insurance policy.
- Helping a large company restructure its retiree medical program so that it could apply for the Medicare Part D prescription drug subsidy.
- Helping several companies revise their severance programs to avoid unanticipated liabilities in corporate transactions, and to qualify for exemption from the new deferred compensation requirements.
Cafeteria Plans & Fringe Benefits
Our employee benefits practice covers the full range of fringe benefit programs and flexible benefits. We help employers design tax-efficient plans, prepare employee communications, and negotiate third-party service agreements to provide transportation benefits, legal services, education assistance, charitable matching contributions, employee discounts, and a variety of other benefits. We frequently advise employers on issues that arise under their cafeteria plans and flexible spending arrangements, such as the tax consequences of extending benefits to domestic partners and their dependents, and the methods available for transferring spending account balances to a new employer in a corporate transaction.
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