On April 10, 2025, Faulk Co. vs. Becerra, a federal court in the Northern District of Texas Fort Worth Division granted the plaintiff’s motion for summary judgment after determining that the IRS lacked the authority to impose penalties on the plaintiff for failing to offer its employees coverage as required under the ACA. The plaintiff stopped offering minimum essential health insurance coverage to its employees in 2019. The ACA requires employers with 50 or more employees to offer that coverage or face potential penalties...

On April 15, 2025, President Trump signed an executive order titled “Lowering Drug Prices by Once Again Putting Americans First.” As outlined in the accompanying fact sheet, the new executive order expands upon numerous initiatives introduced during the first Trump administration and calls for improved disclosure of PBM compensation to group health plans. It follows a February executive order focused on healthcare transparency requirements...

In 2023, Cigna Corporation and Cigna Health and Life Insurance Company (Cigna) were sued in U.S. District Court following the release of a ProPublica report that they relied on PxDx algorithms to reject plan participant claims without review by Cigna doctors. The case cited reporting by ProPublica that PxDx denied more than 300,000 requests for payments over two months in 2022, with Cigna doctors spending an average of 1.2 seconds reviewing each claim. The participants argued that use of the PxDx system constituted an ERISA fiduciary breach...

On March 24, 2025, in Navarro v. Wells Fargo & Co., a federal court in the District of Minnesota dismissed a case alleging that an employer failed to meet its fiduciary duty to its group health plan when it mismanaged the plan’s prescription drug benefit. The plaintiffs were former employees of the defendant employer, which sponsors and administers the health plan the plaintiffs participated in. The plaintiffs alleged that the defendant violated the fiduciary duties imposed upon it by ERISA when it mismanaged the health plan’s employee prescription drug benefits program.

On March 31, 2025, in McKee Foods Corporation v. BFP, Inc., the U.S. District Court for the Eastern District of Tennessee ruled that ERISA preempts key provisions of Tennessee laws that require employers to include “any willing pharmacy” in their group benefit plan networks. The court’s ruling is a positive development for sponsors of self-insured ERISA plans.

On February 4, 2025, a federal court in the Middle District of Florida Tampa Division denied a defendant’s motion to dismiss a case alleging that the defendant issued a deficient COBRA election notice. The plaintiff is a former employee of the defendant's employer, which sponsors and administers the health plan the plaintiff participated in. The defendant terminated the plaintiff’s employment, but not for gross misconduct. The defendant is subject to federal COBRA, and the plaintiff’s termination was a qualifying event, so the defendant was obliged to... 

The Council of Insurance Agents & Brokers (CIAB) and the American Benefits Council (ABC) recently released a study by Ernst & Young (E&Y), which examined the impact of the tax exclusion on employer-provided health insurance. The study reviewed the effects of limiting the income and payroll tax exclusion for employment-based health insurance to the 75th percentile of premiums, effective January 2026. The study was based on a model similar to those used by the Congressional Budget Office, the Joint Committee on Taxation, and the U.S. Treasury Department.

On March 10, 2025, in Lewandowski v. Johnson & Johnson, et al., the original plaintiff, Ann Lewandowski, amended her ERISA fiduciary breach complaint and added another plaintiff, Robert Gregory, to the putative class action lawsuit. The amended complaint attempts to address deficiencies in the plaintiff’s prior claims, which were previously dismissed by a New Jersey district court due to lack of legal standing.

On February 22, 2025, a federal court in the District of Maine dismissed a proposed class action lawsuit which sought to characterize obesity as a disability under Section 1557 of the ACA. The plaintiff brought the case against the insurance carrier that administered the health plan the plaintiff participated in. The plan does not provide prescription drug coverage for weight loss. The plaintiff claimed that this was discrimination based on a disability and a violation of Section 1557 of the ACA. 

The DOL's Advisory Council on Employee Welfare and Pension Benefit Plans (the Council) recently issued a report examining the group health plan benefit claims and appeals process. In particular, the report studies the reasons behind low participant appeal rates and makes recommendations to address this concern.