Welfare Plan Roundup: Keeping Up with the Flurry of New Developments

Seyfarth Synopsis: It's been a busy few months in the world of employee welfare benefit plans. A wave of new guidance and litigation activity affecting plan disclosures, dependent care assistance programs, mental health parity, wellness programs, Trump Accounts, and the No Surprises Act has kept employers and plan sponsors on their toes. In case you missed anything, we’ve compiled a list of the key developments, with links to our prior alerts for readers interested in a deeper dive into each topic.

This roundup highlights the key developments and practical considerations for employers and plan sponsors trying to keep track of the latest impacts on employer-sponsored welfare plans. Below please find a summary of the latest updates and direct access to our related client alerts by clicking the embedded links.

• Electronic Disclosure Safe Harbor: The Department of Labor has proposed a new electronic disclosure safe harbor for group health plans that, if finalized, that would provide employers and plan sponsors with greater flexibility to deliver welfare plan notices electronically. The proposal represents a significant step toward modernizing participant communications and could reduce administrative burdens if finalized. Read “From Mailbox to Inbox: DOL Proposes New Electronic Disclosure Safe Harbor for Group Health Plans.” 
• Dependent Care Assistance Program Testing: Long-awaited proposed IRS regulations provide detailed guidance on the four nondiscrimination tests applicable to dependent care assistance programs, including a proposed methodology for the average benefits test and potential correction opportunities for certain testing failures. If finalized, the regulations may offer a more workable path to passing the average benefits test. Read “Worth the Wait: After 45 Years, Dependent Care Assistance Programs Finally Get Regulations.” 
• Mental Health Parity Compliance: New Department of Labor guidance highlights MHPAEA enforcement priorities and compliance red flags, while providing plan sponsors with a practical roadmap for evaluating plan terms, operational practices, vendor support, and nonquantitative treatment limitation comparative analyses. Although the Department of Labor has announced limited nonenforcement relief for certain portions of the 2024 Final Rule, it continues to enforce MHPAEA’s core statutory requirements. Read “DOL Hands Employers a Mental Health Parity Roadmap.” 
• No Surprises Act IDR Developments: Recent appellate decisions have limited providers’ ability to sue under the No Surprises Act to enforce independent dispute resolution awards in certain jurisdictions. However, plan sponsors must continue to navigate litigation, administrative enforcement, vendor responsibilities, contested awards, and evolving federal IDR requirements. Read “Provider Enforcement Takes a Hit: What NSA IDR Litigation Means for Health Plan Sponsors.” 
• Trump Accounts: Proposed IRS guidance addresses employer Trump Account contribution programs, including written plan requirements, contribution limits, eligibility, nondiscrimination rules, notices, reporting obligations, and permissible investments. However, many operational, compliance, and administrative questions remain unanswered as employers evaluate whether and how to offer these programs. Read “Employer Contributions to Trump Accounts: Partially Explained."
• Wellness Program Guidance and Tobacco Surcharge Litigation: New agency FAQs announce temporary enforcement relief under which the agencies will not take enforcement action against an otherwise compliant plan that provides a wellness reward prospectively after a participant completes a reasonable alternative standard. The FAQs also clarify when plan materials must include notice of the availability of a reasonable alternative standard. Note that class actions continue to challenge tobacco-related premium surcharges based on alleged deficiencies involving reasonable alternative standards, participant notices, and access to the full reward. While the FAQs reflect the agencies' enforcement position, particularly in light of the Supreme Court's decision in Loper Bright, that may not be dispositive in litigation. Accordingly, employers should continue reviewing their program terms, communications, and administrative practices for compliance. Read “Wellness Program FAQs: Agencies Offer Relief on Retroactive Rewards and Clarify Notice Requirements.”
• Health Plan Price Transparency Requirements: The tri-agencies have finalized significant revisions to the Transparency in Coverage regulations. The amendments expand access to personalized cost-sharing information, restructure machine-readable file requirements, and align certain obligations with the No Surprises Act. With changes taking effect on a staggered basis beginning in 2027, employer plan sponsors should begin coordinating with carriers, TPAs, and other vendors regarding implementation and compliance responsibilities. Read “Know Before You Owe: New Rules Expand Health Plan Price Transparency Requirements.”

Employers and plan sponsors should review these developments with their Seyfarth benefits counsel and determine whether any updates to plan documents, participant communications, administrative practices, or vendor arrangements may be appropriate.