Well, another year is nearing completion and in our world of compliance, our holiday healthcare stocking is full of interesting and important changes, additions, and surprises.
Let’s start big, and by big we mean The One Big Beautiful Bill Act (OBBBA). Enacted into law in July of this year, the OBBBA brought us several new consumer directed provisions, including:
The courts, including the Supreme Court, had a busy year as well.
The Affordable Care Act made an appearance in 2025, notably in a major court case, Faulk Company, Inc, v. Bacerra. Here, an employer filed a complaint that they were improperly assessed an employer shared responsibility payment (ESRP) penalty under IRC §4980H for failing to offer minimum essential coverage. They argued that HHS did not issue a notification, that HHS improperly delegated the necessary notification to the IRS, and that a 226J letter is not adequate notification. In their ruling, the court ordered the IRS to refund over $200,000 in penalties paid by Faulk and to set aside the regulation that allowed the IRS to issue notifications. An appeal has been filed. In the meantime, the reporting requirement remains unchanged and ESRP letters are still being mailed to employers.
This year also saw the introduction of an alternative furnishing option for Forms 1095. Employers that don’t want to automatically mail Forms 1095 to all recipients can instead post a notice on their website instructing employees how to request them. Requested 2025 forms must be provided by the latter of January 31, 2026 or 30 days from when the request was submitted.
A flurry of fiduciary lawsuits this year shone a spotlight on the fiduciary responsibilities employers have as sponsors of group health plans. Although a few of these cases were dismissed for lack of standing, they nonetheless brought significant visibility and awareness to the issue of fiduciary responsibilities.
Pharmacy Benefit Managers (PBMs) also made their way onto this year’s compliance-oriented center stage. Several states enacted legislation addressing PBM rebates, spread pricing, any willing provider provisions, and gag clauses in contracts. Additionally, states like Illinois, Tennessee, Iowa, and Oklahoma navigated legal challenges to their PBM legislation from self-funded plans. In these cases, the rule that ERISA preempts any state law pertaining to an ERISA plan has resulted in court decisions in favor of preemption, though some of those rulings have now been appealed.
We don’t really have a crystal ball, but in 2026, we wouldn’t be surprised to see increased talk about Individual Coverage Health Reimbursement Arrangements (ICHRAs) and direct to consumer purchasing of healthcare, more states adopting paid leave programs, more lawsuits, and increased enforcement for non-compliance. Plan sponsors will likely be called upon to remain vigilant and responsible for overseeing their benefit plans, reporting in a timely manner, reading their contracts, and vetting their vendors. In a new year, the compliance protections put in place for employers and employees remain as important as always.
Happy Compliance New Year!
