ML BeneBits

The US District Court for the Northern District of Texas on June 18, 2025 vacated portions of the HIPAA Privacy Rule to Support Reproductive Health Care Privacy (2024 Final Rule) related to reproductive healthcare privacy. The ruling in the case of Purl, M.D. v. US Department of Health and Human Services granted judgment in favor of the plaintiffs. Notably, the opinion only addressed reproductive healthcare privacy-related aspects of the 2024 Final Rule, and the court severed the provision of the 2024 Final Rule requiring updates to the HIPAA notice of privacy practices requirements relating to confidentiality of substance use disorder health records. That requirement remains intact and becomes effective February 16, 2026.

The US Department of Labor’s (DOL’s) position on the appropriateness of environmental, social, and governance (ESG) investing strategies in ERISA-regulated retirement plans has ping-ponged for decades (as we’ve covered previously). A recent statement from Trump administration attorneys in a lawsuit challenging a Biden-era regulation on the topic indicates that the ball is likely sailing back to the other side of the table and specifically to a posture that is largely skeptical that ESG investment factors can comply with ERISA’s fiduciary duties.

President Donald Trump issued an executive order (EO) on May 12, 2025 to address the high cost of prescription drugs in the United States with the goal of ensuring Americans have access to most-favored-nation (MFN) pricing, which aligns drug prices in the United States with those in comparably developed countries.

The US Departments of Labor, Health and Human Services, and the Treasury (the Departments) announced their non-enforcement policy on May 15, 2025, indicating they will not enforce any new requirements imposed by the Requirements Related to the Mental Health Parity and Addiction Equity Act (2024 Final Rule) until a final court ruling on a lawsuit filed by the ERISA Industry Committee in the US District Court for the District of Columbia challenging certain provisions of the 2024 Final Rule—plus an additional 18 months. The Departments clarified that the provisions of the final 2013 Mental Health Parity and Addiction Equity Act (MHPAEA) regulations remain in effect, and plan sponsors still have an obligation to produce nonquantitative treatment limitations (NQTLs) comparative analyses as required by the Consolidated Appropriations Act, 2021 (CAA).

The US Departments of Health and Human Services, Labor, and the Treasury (together, the Departments) filed a motion to suspend the litigation proceedings in The ERISA Industry Committee vs. HHS et al. on May 9, 2025 while the government reconsiders final regulations implementing the Mental Health Parity and Addiction Equity Act (MHPAEA). On May 12, the US District Court for the District of Columbia granted the stay.

The US Department of Labor recently issued Field Assistance Bulletin (FAB) 2025-01, a temporary enforcement policy regarding the transfer of small retirement plan benefits to state unclaimed property funds. This development is part of the agency’s broader effort to help fiduciaries fulfill their obligations under ERISA to ensure participants and beneficiaries are located and receive their retirement benefits.

Temporary Enforcement Policy

As we noted in our previous LawFlash, the DOL was directed under SECURE 2.0 to establish a Retirement Savings Lost and Found to allow a participant (or beneficiary) to search for contact information for plan administrators of plans in which the participant (or beneficiary) may have a benefit. The DOL ultimately did establish a searchable Retirement Savings Lost and Found database, but submission of information to the database remains voluntary, and its utility remains questionable.

The FAB represents another step—one that will be much more useful—in helping participants (and beneficiaries) locate and obtain their plan benefits. Under the FAB, and pending the DOL’s issuance of further guidance, the DOL indicates that it will not pursue violations of fiduciary duties related to the transfer of benefits with a present value of $1,000 or less (including uncashed checks) owed to a missing participant (or beneficiary) to an eligible state unclaimed property fund provided that certain conditions set forth in the FAB are satisfied.

For purposes of determining whether the present value of a benefit does not exceed the $1,000 threshold, the fiduciary is directed to disregard any plan loans but to include any rollover contributions to the plan.

In order to qualify for relief provided by the FAB, the plan fiduciary must satisfy the following conditions:

• The fiduciary must have determined that the transfer to a state unclaimed property fund is prudent for the benefit owed to the participant or beneficiary.
• The fiduciary must have implemented a prudent program for locating missing participants consistent with DOL’s Missing Participants – Best Practices for Pension Plans (on which we previously wrote).
• The state unclaimed property fund that is selected must be the one offered by the state of the participant’s (or beneficiary’s) last known address.
• The plan’s summary plan description must describe the transfer of the benefits of missing participants (or beneficiaries) to a state unclaimed property fund, and the summary plan description must also identify the name, address, and phone number of a plan contact who can answer questions about where the funds may be transferred.
• The state unclaimed property fund must qualify as an “eligible state fund,” meaning it
  • acts as custodian and allow claims to be made in perpetuity, regardless of when the funds are received by the state;
  • must not charge any fees or other charges that will result in the payment of less than 100% of the amount transferred to the state fund;
  • has a free, searchable website that reliably shows the name of the participant or beneficiary and plan name and permits electronic claims;
  • provides an ability to make inquiries by physical mail, electronic mail, and telephone;
  • “participates in the National Association of Unclaimed Property Administrators’ MissingMoney.com website or a similar non-commercial unclaimed property database operated under the auspices of the National Association of State Treasurers, Inc.”;
  • affords a streamlined process for small claims of $1,000 or less;
  • diligently searches, at least annually, for updated addresses of participants and beneficiaries who are owed more than $50 and provides written notice to the owner that the state is holding the individual’s money upon obtaining an updated address;
  • allows the plan to pay the participant or beneficiary directly and obtain reimbursement of transferred amounts from the state; and
  • “participates in the States’ Unclaimed Property Clearing House, as operated by the National Association of State Treasurers, Inc.”

A plan fiduciary can rely on a representation from the state treasurer that a fund is an eligible state fund unless the fiduciary has actual knowledge to the contrary.

Observations

This guidance may be particularly helpful in the context of uncashed checks (e.g., amounts that have been involuntarily distributed or trailing distributions that go uncashed). However, plan fiduciaries should think carefully and consult with counsel about whether escheatment makes sense under various scenarios. It may also take some time for state treasurers to prepare to make the necessary representations, or for plan fiduciaries to conduct the necessary diligence if these representations are not available.

How We Can Help

Morgan Lewis lawyers stand ready to assist plan fiduciaries and administrators on questions related to missing participants and uncashed checks and application of the FAB.

If you need assistance with any of the above or have any other questions on the FAB, please contact your Morgan Lewis contact(s).

The US Department of Labor (DOL) has issued new guidance in the form of Field Assistance Bulletin No. 2025-02 (FAB 2025-02) and updated model annual funding notices (AFNs) for single-employer and multiemployer pension plans. FAB 2025-02 addresses some conflicts between Section 101(f) of ERISA (as amended by SECURE 2.0)—which requires the plan administrator of a retirement plan to disclose certain information to participants, beneficiaries, and other entities—and previous DOL regulations at 29 CFR § 2520.101-5.

On January 20, 2025, an executive order froze two new pieces of proposed employee stock ownership plan (ESOP) guidance announced in a notice of proposed rulemaking and originally set for publication in the Federal Register on January 22, 2025.

Since taking office, President Donald Trump has issued several executive orders (EOs) and actions that may have an impact on group health plans. These EOs provide insight into the US administration’s policies and outline potential actions that regulatory agencies and Congress may take to implement these policies.

A growing number of class action lawsuits have been filed against employer-sponsored self-insured group health plans alleging that tobacco cessation wellness programs violate key provisions of the Employee Retirement Income Security Act (ERISA) and the Health Insurance Portability and Accountability Act (HIPAA). These lawsuits challenge tobacco cessation programs on the grounds that they do not comply with the HIPAA nondiscrimination rules and ERISA’s fiduciary duties. As litigation on this issue continues to evolve, plan sponsors may consider proactive steps to ensure their tobacco cessation wellness programs comply with legal requirements to mitigate potential litigation risks.