ML BeneBits

The One Big Beautiful Bill Act created “Trump accounts” under Section 530A of the Internal Revenue Code. While many questions remain unanswered, Trump accounts essentially operate as retirement saving accounts for children, somewhat mirroring traditional individual retirement accounts (IRAs) but are subject to distribution restrictions before the beneficiary reaches age 18. The statute enables employers to contribute up to $2,500 annually per employee to the Trump accounts of their employee’s dependents. Employers can begin making contributions on July 4, 2026.

For decades, fiduciary litigation under the Employee Retirement Income Security Act of 1974 (ERISA) was largely concentrated on 401(k) and pension plans. That era has ended. In recent years, we have seen class-action lawsuits targeting health and welfare plans. Plaintiffs’ firms have begun applying the excessive fee playbook to health plans, alleging that plan sponsors have failed to monitor pharmacy benefit manager pricing, allowed excessive broker commissions, and ignored opaque indirect compensation structures.

Glucagon-like peptide-1 receptor agonists (GLP-1s) such as Ozempic, Wegovy, Mounjaro, and Zepbound have reshaped the landscape of diabetes and obesity treatment and quickly become one of the most significant cost drivers for employer-sponsored health plans.

In Williams v. Bally Management Group, LLC, the US District Court for the District of Rhode Island became the first court to grant a motion to dismiss in a class action challenging Bally Management Group’s (Bally) tobacco surcharge wellness program. The court dismissed the plaintiff’s challenge in full, rejecting both the ERISA nondiscrimination claim that the tobacco surcharge violated the “full reward” requirement and the fiduciary-breach claim. This decision is a favorable development for plan sponsors amid the recent surge of class actions targeting tobacco surcharge wellness programs, as discussed in our recent blog post.

In July 2025, we published an article (see link below) that discussed considerations relating to rollover and incentive equity in management representations in private equity transactions. This blog post addresses additional considerations for executives or teams of executives relating to restrictive covenants.

Annual benefits enrollment, which for many companies will be in the coming months, typically lasts one to two weeks, but the preparation process begins several months in advance. For human resources (HR) and benefits teams, this period often involves a complex blend of strategic planning, system updates, vendor coordination, and employee communications. A well-executed enrollment period ensures that employees understand their options and are equipped to make informed decisions for themselves and their families.

The US Department of Labor (DOL) has withdrawn prior guidance from 2023 supporting racial equity programs aimed at increasing racial diversity in a plan’s asset manager pool. That prior guidance had provided comfort to plan sponsors with vendor diversity programs that offering such a program would not necessarily be disfavored by the DOL. In Advisory Opinion 2025-01A, the DOL expressly rescinded its 2023 advisory opinion.

The US administration recently issued an executive order to expand access to alternative investments in ERISA-governed retirement accounts. The order titled Democratizing Access to Alternative Investments for America's Workers aims to modernize retirement plan investment options by including alternative investments, such as private equity, private credit, real estate, and digital assets like cryptocurrency, as designated investment alternatives.

In a release that was fairly unsurprising in content, the Internal Revenue Service issued Revenue Ruling 2025-15 to address a payor’s tax withholding and reporting obligations with respect to stale and reissued retirement plan distribution checks. Importantly, to the extent that payors have been following the IRS’s prior guidance in Revenue Ruling 2019-19 and the existing reporting and withholding regulations, the ruling does not require any changes to existing practices.

President Donald Trump signed the One Big Beautiful Bill (OBBB) into law on July 4, 2025. The OBBB is a wide-ranging piece of legislation that introduces significant reforms across multiple areas of federal policy, including changes affecting group health plans in the areas of telehealth coverage and dependent care assistance.