September 2023

From The Certified Elder Law Attorney's Desk:


William W. "Bill" Erhart

Blog Spotlight:

IRS Delay SECURE 2.0 Roth Requirement for Catch-Up Contributions for High Earners Until 2026

By: Catherine Read

Sept 1, 2023

Article of Interest:

Still there: Alzheimer's has ravaged his mother's memory, but music brings her back

Sept 21, 2023


Dustin Jones

Staff News & Updates

Meet the Newest Member of Our Team: Spencer Boyle

Calendar of Events

Inspirational Quote

Our Team

From The Certified Elder Law

Attorney's Desk:

William W. “Bill” Erhart


The Centers for Medicare and Medicaid Services (“CMS”) released a list of the first ten drugs whose prices will be subject to negotiation for Medicare patients, a plan implemented under the  Inflation Reduction Act (“IRA”).

Not to be cynical, but like any venture the government is involved in, it is hard to make sense of it.

First, CMS needs permission from Congress to negotiate prices? How does anyone operate without the ability to negotiate or shop in the marketplace? But that has been the law for decades.

Second, the drug companies (“Companies”), under the IRA are required to negotiate. The government is requiring them? Based upon a 90% tax if the Companies refuse to negotiate the Companies have no choice but to negotiate.

Some context: Companies are private industries spending money on research for new drugs. This is offset by patents, which legally restrict competitors from selling generics until the Companies can recoup their investment, make a profit and have capital for future research. Or by acquisition of other companies which have developed drugs. 

The negotiation is focused on those drugs for which there are no generics and are still protected by patents. So two competing interests are in play involving two different laws: The IRA, which aims to lower drug prices by coercion and patent law which incentivizes Companies to develop new drugs to cure the sick by giving the Companies a limited period of time to recoup the cost of research and make a profit.

The greater issue may be about patent monopolies. After all, drugs are usually cheap to manufacture. Hence generics. 

How will negotiations work?

CMS selects the drugs subject to negotiation. Ten were announced early in September.

Companies have until October 1 to decide whether to participate in the talks. If they decline, they will be subject to an excise tax of up to 90 percent on product sales. 

If a Company does agree, it will meet with agency officials this Fall to provide product data. CMS has said it plans to hold patient-focused listening sessions on each of the ten drugs.

CMS plans to send an initial price offer to companies by Feb. 1, 2024. Then the drugmakers have to either accept the offer or decide to leave Medicare and Medicaid.

In developing an initial offer, CMS will start with evidence related to therapeutic alternatives and then consider other factors, such as “cost of research and development and production and distribution of the selected drug.”

Through Spring and Summer of 2024, CMS will hold three meetings with each Company to agree upon a price.

Negotiation ends on August 1, 2024 and a month later CMS will release the final price.

CMS must explain its decision on the final price by March 1, 2025.

For 2027, CMS can negotiate the price on another 15 drugs. In 2028, the agency can negotiate on 15 additional drugs. For every year after 2028, the agency can select 20 drugs for negotiation.

How will CMS determine if a generic is available?

The availability and “bona fide” marketing of a generic or similar drug will eliminate a drug from negotiation. CMS guidance explains the determination of marketing on a bona fide basis will be based on the “totality of circumstances.” CMS intends to conduct ongoing assessments to determine whether “meaningful” competition exists and ensure marketing on a bona fide basis.

CMS will adjust the starting point for the initial offer based on the “totality” of evidence about the benefit the targeted drug provides relative to its alternatives.

If an agreement on the price is not reached by August 1, 2024 manufacturers may be subject to the 90% excise tax according to the IRA. Companies that choose not to negotiate will be permitted to withdraw drugs from coverage under Medicare and Medicaid to avoid paying the excise tax.

Will Medicare recipients benefit from drug price negotiation?

It is uncertain how many Medicare beneficiaries will see drug costs reduced and the amount of savings, since both will depend on which drugs are subject to negotiation and the actual cost reduction compared to what the price would be on the open market.

Under the IRA a drug cannot be selected for negotiation until seven years to eleven years after it is on the market depending upon its formula. In the future, this will incentivize higher initial prices, so drug companies can recoup their investment early before the CMS can select them for negotiation. For now, the three-year lag between selection and price reductions involves some guessing that the drug will not have a generic to compete with or is replaced before the three-year process is complete.

It is theoretically possible that by 2026, only three drugs of the ten selected drugs will not have generic competition and will be eligible for negotiation. That number will likely be higher, but it is very likely that it will not be ten. And under the IRA CMS cannot pick a replacement drug, if one of the ten selected drugs is replaced or becomes obsolete. The opportunity to negotiate is lost.

IRS Delays SECURE 2.0 Roth Requirement for Catch-Up Contributions For High Earners Until 2026

Friday, September 1st, 2023 by Catherine Read

*Certified as an Elder Law Attorney (which may be abbreviated “CELA” or “CELA®”) by the National Elder Law Foundation.

This article describes another step in our country’s laborious task of implementing the SECURE 2.0 Act of 2022, which, together with its predecessor SECURE Act of 2019, is making major changes regarding retirement accounts such as 401(k) plans, Individual Retirement Accounts, and governmental 457(b) plans.

Proposed Treasury regulations issued in February 2022 to implement SECURE (not even SECURE 2.0 yet) differed vastly from what many practitioners expected. Final regulations have yet to be issued. The content of those final regulations is unknown to say the least.

SECURE is rocking the retirement account world. The law in this area is in flux.

The latest installment relates to catch-up contributions by individuals 50 or over who are considered “high earners” in this context.

What is a catch-up contribution?

As you probably know, every year the Internal Revenue Service (“IRS”) sets limits on how much an individual may contribute to his or her retirement account. The limit is different depending on the type of account. Individuals may “max out” their contribution each year by contributing that amount. They may contribute no more for that year after reaching that limit.

But for individuals age 50 or over, Internal Revenue Code Section 414(v) permits a “catch-up contribution”, on top of the annual contribution, to save more towards retirement. When a catch-up contribution is made by an individual age 50 or older, the total contribution will be larger than the standard contribution limit. Every year the IRS sets limits on catch-up contributions as well, by type of account.

How did SECURE 2.0 affect catch-up contributions?

Section 603 of SECURE 2.0 required that, for tax years beginning after December 31, 2023, catch-up contributions made to 401(k), 403(b), and governmental 457(b) plans by employees whose FICA (Federal Insurance Contributions Act) wages in the prior year exceeded $145,000 (as adjusted in future years) must be made as Roth contributions, meaning on a post-tax basis. This requirement in Section 603 of SECURE 2.0 is a change to the current rules which allow the employee to designate whether the catch-up contribution is to be made on a pre-tax or post-tax basis.

Note the above change applies only to individuals 50 or over who are considered “high earners” in this context: FICA wages in prior year exceeding (as adjusted in future years) $145,000.

What’s the problem with requiring these “high earners” to make catch-up contributions on a post-tax basis?

The problem is employers as plan sponsors need to be set up to allow Roth contributions, and not all are. Plus implementation of this regulation is a more complex matter than it may seem, when reconciling it with other aspects of IRC Section 404 concerning both high- and non-high earners.

Factors include: (i) the short timeframe from the passage of SECURE 2.0 on December 29, 2022 to January 1, 2024 (which is the effective date of this designated Roth requirement), and (2) lack of IRS guidance to help employers, plus the third-party administrators who administer the plans, to implement the requirement.

The problem is such that over 200 employer organizations wrote to Congress, the Department of Treasury, and the IRS requesting “transition relief” to allow a more orderly implementation of the requirement.

The IRS answered with a YES. IRS Notice 2023-62 issued on Friday, August 25, 2023, announces a two-year reprieve for employers on the implementation of the Roth catch-up contribution requirement for high earners. The administrative transition period delays the effective date of the requirement to January 1, 2026, and clarifies and confirms other aspects of the regulation.

The Notice also confirms more guidance is to come. The IRS has requested written comments regarding the Notice and any other aspect of Section 603 of SECURE 2.0 by October 24, 2023. In addition, the Notice asks for comments about whether the intended guidance should address a plan that permits eligible participants to make catch-up contributions under Section 414(v) but does not include a qualified Roth contribution program. In particular, should a plan be permitted to prohibit higher-income participants from making catch-up contributions, but allow others to make pre-tax catch-up contributions, or should IRC Section 404(v)(4) continue to require plans to allow all eligible participants to make the same catch-up contribution election?

As a result of this Notice, a plan sponsor now gets 2 years (and a few months) to consider and determine whether to add a Roth contribution feature to its plan (if it does not already have one) and (ii) implement the requirement that a high earner’s catch-up contribution must be made on an after-tax basis.



Spencer joined Estate & Elder Law Services in 2023. As the Administrative Assistant, Spencer coordinates the firm’s schedule, manages new clients, and ensures customer satisfaction. He also handles various activities that are essential in daily operations, such as working with third-party vendors, drafting required forms for our clients and much more.

Spencer graduated from the University of Delaware in 2023 with a Bachelor’s of Arts in History and English, minoring in Legal Studies. In the future, he intends on continuing his education by pursing a Juris Doctor degree and aspires to practice law in his home state of Delaware.

In his spare time, Spencer can often be found reading, fishing, or playing chess. He is an avid Philadelphia sports fan.

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Still there: Alzheimer's has ravaged his mother's memory, but music brings her back

September 21, 2023

By Dustin Jones for

Eighteen years ago, Adam Kaye was hosting a family barbecue at his home in Del Mar, Calif., when his mother, Martha Kaye, broke the news. At 71 years old, she realized that she was becoming forgetful. While working in the kitchen, she would ask herself out loud, "What am I doing?" Martha — better known as Marti — started calling everyone "Darling" because names had begun to slip her mind.

Adam had suspected something was wrong. So when Marti told him she had Alzheimer's disease, the diagnosis didn't come as a surprise. "But that didn't mean that it wasn't very difficult to hear," he says. "It was something upsetting for my young daughter, who had never seen her grandma cry at the time."

Well aware that Alzheimer's is an irreversible disease, a "one-way street," Adam didn't feel the need to bury himself in research. He had two young children to raise, and his father, Peter Kaye, had already decided he would be the one to care for his wife of 50 years.

But almost a decade passed, and Peter was diagnosed with bone cancer in 2014. He soon became unable to tend to Marti's needs, and the family decided to bring on professional caregivers. When Peter passed away in 2015, Adam and his older brothers, Loren and Terry Kaye, had to sell their parents' house to help pay for their mother's care.

Marti had always supported Adam in life's endeavors: buying him guitars, driving him to music lessons and helping with school. Watching his mother deteriorate was painful, Adams says, seeing her go from being the woman who would light the room to a shadow of her former self. And when his mother had to leave her home and move in with full-time caretakers in the summer of 2015, he was determined to be there for her.

As a lifelong musician, Adam has always enjoyed playing for his mother. Before the onset of Alzheimer's, Marti would sing along, and the pair would perform as a duet for family and friends.

So every Sunday for the past eight years, Adam has packed his guitar and made the short drive to visit with his mother. Once there, he plays some of her favorite songs: tunes from the metaphorical pages of the Great American Songbook, like 20th-century rock standards and folk and jazz tracks. When he plays for her, he sees a glimpse of the woman he has known his entire life.

A musical bond between mother and son

Back in February 2019, Adam posted a video to his band's Instagram account of him playing "Blue Bossa," by Kenny Dorham, for Marti. Recording their performances since then makes their time together more fun, he says, and the videos give him something he can look back on and smile. They also seemed to strike a chord with his followers, especially those with a loved one with Alzheimer's.

"Some of the posted comments touched upon how these videos and the togetherness brings tears to their eyes and makes them think of their own loved ones and their own stories and what they go through," Adam says.

He has since posted more than 100 recordings of him and Marti performing together.

"That is why I feel really good about doing this. I know that Marti, with her forever benevolent heart, would want to do anything ever within her means to help people."

At first, Marti would sing along with Adam. But as the disease inevitably progressed, the words to her favorite songs began to slip away. By 2018, her speech was limited to one-syllable words that made little sense.

But when the lyrics were long gone, Marti began to whistle along as her 57-year-old son strummed the chords to the songs she'd always loved — like those of the Beatles, jazz legend John Lewis and Elvis Presley.

Somehow, she still knows the melodies to the songs she had listened to 70 years ago.

"Alzheimer's disease has crushed Marti's memory. At this stage, she cannot form a word. But somehow the pathway to musical melodies remains clear," Adam says. "And it is along this pathway that she and I are able to communicate."

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