ML BeneBits

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.

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.

Section 162(m) of the Internal Revenue Code prohibits a publicly held corporation from taking compensation-related tax deductions with respect to the compensation of a “covered employee” to the extent the compensation exceeds $1 million in a tax year. The definition of “covered employee” under Section 162(m) was expanded by the Tax Cuts and Jobs Act (TCJA) in 2017 and was expanded further by the American Rescue Plan Act (ARPA) in 2021. ARPA expanded the list of covered employees to include the company’s five most highly compensated employees, effective for tax years beginning after December 31, 2026. On January 14, 2025, prior to the presidential administration transition, the US Department of the Treasury and the Internal Revenue Service (IRS) released proposed regulations (Proposed Regulations) implementing the ARPA amendments to Section 162(m).

Each year, employers that provide prescription drug coverage to Medicare-eligible individuals through a group health plan must complete a two-step process regarding the prescription drug coverage they offer to active employees and their eligible dependents. The deadline for one of those required steps is fast approaching.

In many situations, practitioners recommend establishing a fiduciary committee to oversee ERISA-covered employee benefit plans. There are several reasons for this, including providing a well-defined process for decision-making; bringing together a diverse team with a wide set of experience to address issues relevant to the benefit plan’s administration; managing the investment, legal compliance, and operational risks that can arise in a complex regulatory landscape; and establishing clear separation between plan sponsor and fiduciary roles.

On December 23, 2024, President Biden signed into law two bills that will simplify employer reporting compliance under the Affordable Care Act (ACA). The new laws streamline the rules for employers furnishing ACA reporting forms to covered individuals.