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Health & Welfare Plans Newsletter

February 12, 2024

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[Official Guidance]

Text of IRS Rev. Proc. 2024-14: Adjusted Dollar Amounts Under Section 4980H for Calendar Year 2025 (PDF)

"[T]he premium adjustment percentage for 2025 is the percentage (if any) by which the NHEA Projections 2022-2031 value for per enrollee employer-sponsored insurance (ESI) premiums for 2024 ($7,110) exceeds the NHEA Projections 2022-2031 value for per enrollee ESI premiums for 2013 ($4,897) ... Using this formula, the applicable premium adjustment percentage is 1.4519093322. For calendar year 2025, the adjusted $2,000 amount under Section 4980H(c)(1) is $2,900, and the adjusted $3,000 amount under Section 4980H(b)(1) is $4,350."  MORE >>

Internal Revenue Service [IRS]

[Official Guidance]

New York Proposes Regs Governing Pharmacy Benefit Managers Operating in the State

"The Department is also inviting submissions of comments, data, or documented evidence from the public regarding network adequacy requirements, formulary changes, drug manufacturer rebates, and aberrant quantity/product list restrictions.... The regulations ... [1] Prohibit PBMs from barring any in-network pharmacies from providing mail order or delivery services ... [2] [Require] PBMs to list formularies and pharmacy directories online ... [3] Require PBMs to post a telephone number and email address for consumers[.]"  MORE >>

Department of Financial Services [DFS], New York State

Tenth Circuit Revives ERISA Breach of Fiduciary Claim Based on Misleading Email About Continued Life Insurance Coverage

"Plaintiff then sued ... for breach of fiduciary duty, seeking an equitable remedy of surcharge ... because [the employer's] November 30th email was misleading and caused Mr. Watson to believe he still had basic life insurance coverage.... The district court denied Plaintiff's motion for determination.... The Tenth Circuit [held that] 'The district court committed legal error and therefore abused its discretion because it treated Ms. Watson's Section 1132(a)(3) claim for fiduciary breach as a Section 1132(a)(1)(B) claim to recover under the plan.' " [Watson v. EMC Corp., No. 22-1356 (10th Cir. Feb. 9, 2024) ]  MORE >>

Roberts Disability Law

United Behavioral Health Files Cert Petition Over Mental Health Coverage Claim Decision

"In its cert petition, UBH argues that courts cannot impose requirements on ERISA plan administrators that neither Congress nor the U.S. [DOL] have imposed. More specifically, UBH argues that the court cannot require it to explain why it disagrees with the claimant's treating physician's recommendations." [D.K. v. United Behavioral Health, No. 21-4088 (10th Cir. May 15, 2023; cert. pet. filed Nov. 29, 2023, No. 23-586)]  MORE >>

Hall Benefits Law

Proposed Class Action Filed Against Plan Fiduciaries Alleges Prescription Drug Mismanagement

"[To] help limit employer and plan fiduciary liability ... [1] [G]ood fiduciary hygiene dictates a formal RFP for PBM selection. [2] PBM contract negotiation requires a critical eye for provisions that may unreasonably benefit the PBM (e.g., spread pricing or rebate retention) or otherwise create conflicts of interest (e.g., PBM-owned pharmacies).... [3] [E]mployers and plan fiduciaries should monitor their PBM arrangements with the same detail and scrutiny afforded to any other critical employee benefit plan vendor." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Conner & Winters, LLP

Illinois Generic Drug Price Gouging Law Challenged; State Affordability Boards May Draw Similar Fire

"These lawsuits have important implications for the future of price-gouging laws generally and may also have implications for future challenges to prescription drug affordability boards (PDABs), which are becoming a frequent feature of state efforts to regulate drug pricing and threaten to further restrict manufacturers' ability to set prices for their products."  MORE >>

Sidley Austin LLP

Managing Welfare Plan Risk: The Fiduciary Committee

"[An] appropriately empowered and staffed committee will have overall oversight and monitoring roles with respect to fiduciary functions.... A more sophisticated employer may decide to establish a separate plan sponsor committee to handle non-fiduciary activities such as plan design and plan amendments. This committee can act in the best interest of the plan sponsor without being subject to any fiduciary duty to participants under ERISA."  MORE >>

Morgan Lewis

Benefits in General

[Guidance Overview]

Going Above and Beyond: ERISA Disclosures (PDF)

"[M]ultiple court decisions demonstrate that fiduciaries may need to go above and beyond [ERISA's] requirements when providing notices and benefits information to plan participants.... [1] Provide legally and factually accurate communications at all times. [2] Make sure all communications are understandable to the average participant. [3] Consider whether additional information is appropriate given a participant's unique circumstances. [4] Quickly correct misstatements or incorrect communications. [5] Advise affected participants about benefit changes under serious consideration."  MORE >>

benefits magazine, a publication of The International Foundation of Employee Benefit Plans [IFEBP]

Employee Benefits Jobs

View job as Regional Vice President, Sales for MAP Retirement USA LLC

Regional Vice President, Sales

MAP Retirement USA LLC


View job as Regional Vice President, Sales for MAP Retirement USA LLC

Last Issue's Most Popular Items

Text of IRS FAQs for the Premium Tax Credit (PDF)

Internal Revenue Service [IRS]

Johnson & Johnson Case Signals Employee Drug Price Suits to Come

Bloomberg Law

Federal Poverty Level Announced for 2024: What This Mean for Employer Shared Responsibility Rules

Winston & Strawn LLP

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BenefitsLink® Health & Welfare Plans Newsletter, ISSN no. 1536-9595.

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