Employee Benefits Briefing, Spring 2025

Nixon Peabody LLP

Although the Department of Labor has announced a non-enforcement policy for certain 2024 mental health parity regulations provisions, many core requirements remain in effect. Plan sponsors should not interpret the pause as a blanket exemption. 

Recent executive orders issued by the Trump administration signal a shift in federal benefits policy, with implications for prescription drug pricing, wellness programs, and reproductive health benefits. 

Litigation targeting health and welfare plan fiduciary governance, with a particular focus on oversight of prescription drug benefits, is gaining momentum. Recent class actions allege fiduciary failures in PBM selection, contract negotiation, and ongoing cost and performance monitoring. 

Plan sponsors should prepare for several administrative updates in 2025 and 2026, particularly those stemming from SECURE 2.0 and the Cycle 4 restatement period. 

The Supreme Court’s decision in the Cunningham case is concerning because it may preclude defendants from being able to bring motions to dismiss in response to recordkeeping “prohibited transaction” claims. This in turn may effectively enable plaintiffs to circumvent the “meaningful benchmark” standard that applies to prudence claims alleging excessive recordkeeping fees. This could increase ERISA class litigation expense for plan sponsors.

In addition, pension risk transfer transactions are being challenged in court over annuity provider selection. In the first two decisions, the courts have split on whether plaintiffs have standing to sue.

Financial wellness programs are becoming a key component of employer benefit strategies. Offerings range from budgeting tools and one-on-one coaching to student loan support and earned wage access.

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