New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Understanding Creditor Protections forLaboratory Corp. of America Employees

Healthcare Provider Update: Healthcare Provider for Laboratory Corporation of America Laboratory Corporation of America (LabCorp) is a prominent healthcare provider known for offering comprehensive laboratory testing and diagnostic services, supporting healthcare professionals in diagnosing and managing patient care effectively. LabCorp operates numerous patient service centers, ensuring accessibility to a wide range of tests and results for patients across the United States. Potential Healthcare Cost Increases in 2026 As we look ahead to 2026, healthcare costs are projected to see significant increases, largely driven by a combination of factors including the potential expiration of enhanced federal subsidies for ACA marketplace plans and rising medical expenses. Many states are bracing for premium hikes exceeding 60%, with out-of-pocket costs for consumers potentially soaring by over 75%, according to industry reports. This scenario paints a daunting picture for families dependent on health insurance coverage, as insurers tighten oversight and grapple with surging drug prices, hospitalization costs, and increased demand for behavioral health services. Ultimately, consumers will need to navigate these changes carefully to maintain access to affordable healthcare. Click here to learn more

'Laboratory Corp. of America employees must be aware that while ERISA-qualified plans provide significant protection from creditors, non-ERISA accounts like IRAs are more vulnerable, and it's crucial to understand state-specific laws to ensure full asset security as you approach retirement,' says Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'As retirement approaches, Laboratory Corp. of America employees should consider not only the strength of their ERISA-qualified plans but also the potential vulnerabilities of non-ERISA accounts, and seek guidance from legal and financial experts to ensure their assets are fully protected,' advises Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

The protection of retirement savings under ERISA-qualified plans.
The limitations of ERISA protection, including potential risks from creditors.
The role of state laws in protecting non-ERISA retirement accounts like IRAs.

For employees at Laboratory Corp. of America, an important issue is the security of retirement savings, especially when employees approach the retirement age or are retired. It is generally assumed that all retirement assets are protected from creditors. Nevertheless, the extent to which these assets are protected differs greatly depending on the type of retirement plan and the laws of the state. In this article, we explore the specifics of asset protection.

Plans Covered by ERISA: A Stronghold Against Creditors
Most of the retirement plans that meet the eligibility requirements of the Employee Retirement Income Security Act (ERISA) are generally safe. Such ERISA-qualified plans are also usually safe from the reach of creditors in the event of bankruptcy or civil suits. Importantly, this protection is maintained even if the company sponsoring the plan goes bankrupt. These assets are usually out of the reach of personal creditors.

To meet the ERISA requirements, a retirement plan must be offered by an employer or an employee organization and must meet certain federal requirements regarding membership reporting, funding, and vesting. Typical ERISA-qualified plans include profit-sharing plans, pensions, deferred compensation plans, and 401(k)s.

Furthermore, ERISA applies to some employee health and welfare benefits, such as:

Hospital, surgical, and medical coverage through Health Maintenance Organization (HMO) plans.
Health care Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs).
Dental and vision plans.
Prescription drug programs.
Disability insurance.
Specific welfare benefit plans under sections 419(a)(f)(6) and 419(e).

The anti-alienation clause in these plans prohibits the assignment of benefits and thus keeps the assets beyond the reach of most creditors.

Weaknesses of ERISA-Qualified Plans
Although they are very strong, ERISA plans are not foolproof. They can be subject to claims by:

A former spouse for child support or divorce settlements, with a Qualified Domestic Relations Order (QDRO).
The Internal Revenue Service (IRS) for any unpaid federal income taxes.
The federal government in cases involving fines and penalties for crimes.
Creditors in the event that a plan participant breaches the terms of the plan.

The State of Non-ERISA Plans
The protection of retirement accounts that are not covered by ERISA, such as traditional and Roth IRAs, is not uniform. Some 403(b) plans offered by government or religious organizations may also not be ERISA plans.

Featured Video

Articles you may find interesting:

BAPCPA provides some protection for IRA funds in bankruptcy, but such funds are not protected by ERISA.

State Laws and IRA Security
The protection of IRAs and other non-ERISA plans against creditors can vary greatly by state. Some offer little protection, while others offer almost none. It is imperative to know these nuances in order to manage the risk of potential creditor claims. Laboratory Corp. of America employees are encouraged to seek the advice of experienced local attorneys in order to navigate these complex legal situations.

Conclusion
The legality of protecting retirement funds from creditors depends on the type of retirement account, state laws, and certain exemptions. Although most employer-sponsored retirement plans are relatively safe, the legal framework is complex, and it is advisable to seek legal advice early to maximize the protection of retirement assets.

Sources:

Mavar, Tyson. The Retirement Group, a Division of Wealth Enhancement Group . Interview. January 2025.

'ERISA: A Guide to Employee Retirement Income Security Act.' U.S. Department of Labor , 2024, www.dol.gov/general/topic/retirement/erisa . Accessed 31 Jan. 2025.

'How Bankruptcy Affects Retirement Accounts.' National Bankruptcy Forum , 2023, www.nationalbankruptcyforum.com/affects-of-bankruptcy-on-retirement-accounts . Accessed 31 Jan. 2025.

'State Laws and IRA Protection.' Retirement Law Journal , vol. 12, no. 4, 2024, pp. 47-52.

'Understanding Qualified Domestic Relations Orders (QDROs).' Internal Revenue Service , 2023, www.irs.gov/retirement-plans/plan-participant-employee/understanding-qualified-domestic-relations-orders . Accessed 31 Jan. 2025.

What is the 401k/Savings Plan offered by Laboratory Corp. of America?

The 401k/Savings Plan at Laboratory Corp. of America is a retirement savings plan that allows employees to save a portion of their salary on a tax-deferred basis.

How can employees of Laboratory Corp. of America enroll in the 401k/Savings Plan?

Employees can enroll in the 401k/Savings Plan by completing the enrollment process through the company’s benefits portal during the open enrollment period or when they first become eligible.

What types of contributions can employees make to the Laboratory Corp. of America 401k/Savings Plan?

Employees can make pre-tax contributions, Roth (after-tax) contributions, and potentially catch-up contributions if they are age 50 or older.

Does Laboratory Corp. of America match employee contributions to the 401k/Savings Plan?

Yes, Laboratory Corp. of America offers a matching contribution to employee contributions, which helps to enhance retirement savings.

What is the vesting schedule for the Laboratory Corp. of America 401k/Savings Plan?

The vesting schedule for Laboratory Corp. of America’s matching contributions typically follows a graded vesting schedule, which means employees earn ownership of the match over a period of time.

Are there any investment options available within the Laboratory Corp. of America 401k/Savings Plan?

Yes, the Laboratory Corp. of America 401k/Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

Can employees of Laboratory Corp. of America take loans from their 401k/Savings Plan?

Yes, employees may be able to take loans from their 401k/Savings Plan, subject to the plan's rules and limits.

What happens to the 401k/Savings Plan if an employee leaves Laboratory Corp. of America?

If an employee leaves Laboratory Corp. of America, they have several options regarding their 401k/Savings Plan, including rolling over the balance to another retirement account, cashing out, or leaving the funds in the plan if allowed.

How can employees of Laboratory Corp. of America access their 401k/Savings Plan account information?

Employees can access their 401k/Savings Plan account information through the company’s benefits portal or by contacting the plan administrator.

Does Laboratory Corp. of America provide financial education regarding the 401k/Savings Plan?

Yes, Laboratory Corp. of America offers resources and financial education programs to help employees understand their 401k/Savings Plan options and make informed decisions.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Plan Names and Details: Pension Plan Name: Laboratory Corp. of America does not offer a traditional pension plan. Instead, the company provides a 401(k) plan for its employees. 401(k) Plan Name: Laboratory Corp. of America 401(k) Plan. Eligibility and Qualification: 401(k) Plan Eligibility: Employees become eligible to participate in the Laboratory Corp. of America 401(k) Plan after completing 30 days of employment. Years of Service and Age Qualification: There are no specific age or service requirements to qualify for the 401(k) plan. All employees who meet the basic eligibility criteria can participate. Pension Formula: Pension Plan Formula: As Laboratory Corp. of America does not offer a pension plan, there is no pension formula to provide.

News on Restructuring and Layoffs: LabCorp has been undergoing significant restructuring in 2023, which included a notable reduction in workforce. In the first half of 2023, LabCorp announced a series of layoffs impacting various departments, aimed at optimizing operational efficiency and reducing costs. This move was part of a broader strategy to streamline operations amidst a challenging economic environment. News on Company Benefits and Pension Changes: Alongside layoffs, LabCorp has made adjustments to its employee benefits package, including changes to retirement plans. The company has revised its 401(k) matching contributions, reducing the percentage of employer contributions. Additionally, there have been updates to the pension plan, with changes in the vesting schedule and benefit formulas. These adjustments are crucial for employees to understand, especially given the current investment and tax environment, which could impact retirement planning and financial stability.

Laboratory Corp. of America provides stock options and RSUs as part of its compensation package. Stock options typically vest over a period of time, with specific vesting schedules detailed in individual grant agreements. RSUs are granted based on performance and time-based vesting criteria, with awards given to senior executives and key employees.

Laboratory Corp. of America (LabCorp) offers a range of health benefits that emphasize comprehensive coverage for its employees. In 2022, LabCorp provided various health plans, including Preferred Provider Organization (PPO) and High Deductible Health Plans (HDHPs), designed to cater to different needs and preferences. These plans typically include benefits such as preventive care, telemedicine services, and access to a broad network of healthcare providers. The company also includes health savings accounts (HSAs) and flexible spending accounts (FSAs) to help employees manage out-of-pocket costs. For 2023 and 2024, LabCorp continued to enhance its health benefits by integrating wellness programs, mental health support, and expanded coverage options to align with evolving employee needs and regulatory changes.