August 11, 2005 (PLANSPONSOR.com) - Federal tax
officials have issued a reminder about the rules under which
trustees or custodians can be appointed for a health savings
account (HSA) or certain other tax-exempted trusts.
The Internal Revenue Service, in
IRS Announcement 2006-45
, said a firm that is not a bank or insurance company must
file a written application with the IRS, demonstrating in
detail it complies with existing tax regulations.
While banks and insurance companies are automatically
eligible to serve as trustees or custodians for HSAs,
individuals are not eligible, the IRS said.
Tax officials reiterated that if they approve a trustee
or custodian application, the applicant receives a notice
of approval. If a non-bank is approved as a trustee, it
must give a copy of the approval to prospective account
holders before their HSAs are established, the IRS
said.
In Announcement 2006-45, the IRS listed 250 non-bank
trustees and custodians approved as of December 31,
2005.
August 10, 2006 (PLANSPONSOR.com) - A federal
appellate court ruled employer arbitration policies may be
used to settle employee complaints including potential
violations of laws barring discrimination against military
service members.
In doing so, the 5
th
US Circuit Court of Appeals threw out a decision favoring
plaintiff Michael Garrett by a federal judge in the
Northern District of Texas. The lower court judge agreed
with Garrett that his former employer, Circuit City , had
violated his rights under the Uniformed Services
Employment and Reemployment Rights Act (USERRA) as a
member of the Marine Reserves. Garrett alleged the
violation occurred when the electronics retailer insisted
his dispute go to arbitration rather than to litigate it
in court.
According to a the appellate ruling written by
Chief Circuit Judge Edith Jones, disposing of the dispute
between Garrett and the company via arbitration does not
run afoul of USERRA rights granted to service members by
Congress. “It is not evident from the statutory
language that Congress intended to preclude arbitration
by simply granting the possibility of a federal judicial
forum,” wrote Jones in the ruling. “Congress
took no specific steps in USERRA, beyond creating and
protecting substantive rights, which could preclude
arbitration.”
Jones said Garrett joined Circuit City at a Texas
location in 1994. In 1995
, the chain adopted a nationwide policy for dispute
resolutionÂ. Garrett signed his acknowledgment of receiving
the notice and did not opt out of the policy during the
30-day period when it was possible.
According to the decision, by the December 2002 and
March 2003 period, when the US was ramping up for the
second war inIraq, Garrett was managing a Dallas regional
service center. He claimed his supervisors, knowing his
reserve status, began criticizing and disciplining
him.In March 2003, Garrett was fired, which he
attributes solely to his status as a Marine Reserve
Officer.
Judges also noted that federal employees must take
their complaints of USERRA violations to the Merit
Systems Protection Board rather than to court, indicating
that alternative methods are permissible under the law.
Garrett must arbitrate his wrongful termination
claim.
Finally, the appellate judges rebuffed
Garrett’s argument that granting his appeal was the
most patriotic thing for the court to do.
“Garrett finally argues that the important
public policy interest behind USERRA, embodying the
protection of soldiers and thus the enhancement of
American security, necessitates denying the request for
arbitration,” wrote Jones. “Although we agree
that the interests USERRA protects are important, it is
wrong to infer that the service members’ substantive
rights are not fairly and adequately protected by
arbitration proceedings under the FAA. USERRA’s purposes
can be fully realized through arbitration.”
The case is
Garrett v. Circuit City Stores,
U.S. Court of Appeals for the 5th Circuit, No. 04-11360
(5/11/06). The appellate ruling is
here
.