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.
ML BeneBits
EXAMINING A RANGE OF EMPLOYEE BENEFITS
AND EXECUTIVE COMPENSATION ISSUES
AND EXECUTIVE COMPENSATION ISSUES
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.
A recent news release indicates that the US Department of Labor (DOL) has an investigatory initiative focused on the issue of “insurability” under life insurance benefits. This issue arises when insurance premiums are collected for ERISA insurance benefits but there is a failure to complete the necessary process of confirming evidence of insurability. The result is that the employee believes they have insurance coverage, but coverage is not available when sought because the evidence of insurability was never completed. The DOL views such failures as a potential breach of ERISA’s fiduciary duties by either the insurer, the employer, or both.
Based on new ERISA disclosure rules, now is a good time to review the compensation paid to your health plan’s consultant and broker. ERISA Section 408(b)(2)(B) requires brokers and consultants expecting $1,000 or more in direct and indirect compensation for services provided to group health plans to make detailed disclosures to the “responsible plan fiduciary” regarding their services and compensation.
The Biden administration intends to end the national emergency and public health emergency declarations (Emergency Declarations) attributable to the COVID-19 pandemic on May 11, 2023. The COVID-19 pandemic brought multiple temporary changes for ERISA-governed group health and welfare plans that will sunset at the conclusion of the Emergency Declarations. It remains to be seen what, if any, guidance will come from the regulatory agencies outlining how these mandates will be phased out or, potentially, if any continuing obligations will remain.
In a 5-4 decision in Thole v. U.S. Bank N.A., the US Supreme Court has ruled that defined benefit plan participants lack Article III standing to sue for fiduciary breaches that do not harm the individual participants. As the Court noted, “[u]nder ordinary Article III standing analysis, the plaintiffs lack Article III standing for a simple, common-sense reason: They have received all of their vested pension benefits so far, and they are legally entitled to receive the same monthly payments for the rest of their lives.