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Seyfarth Synopsis: On July 4, 2025, Donald Trump signed the One Big Beautiful Bill (OBBB) into law. Although most have focused on the sweeping tax reform included in the OBBB, a number of key employee benefits provisions are included in the OBBB as well. Most significantly, the OBBB expands access to and eligible expenses payable from Health Savings Accounts (HSAs), solidifies first dollar coverage for telehealth under high-deductible health plans (HDHPs), and permanently increases the annual contribution limit for dependent care flexible spending accounts (FSAs) for the first time since 1986. Most of the benefits-related changes become effective January 1, 2026. This legal update provides an overview of the OBBB’s employee benefits provisions and any actions that employers need to take for their employee benefit plans now or in the future.

Click here to read the full Legal Update.

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Seyfarth Synopsis: In a closely watched decision, the Supreme Court has upheld the authority of the U.S. Preventive Services Task Force (Task Force), preserving the Affordable Care Act’s (ACA) requirement that health plans cover preventive services–such as HIV prevention medication–without cost sharing. The ruling ensures continued access to a wide range of preventive care for millions of Americans.

Background: The Role of the Task Force

The Task Force, originally established by the Department of Health and Human Services (HHS) and later codified by Congress in 1999, is a panel of volunteer experts appointed by the HHS Secretary. Its mission is to issue evidence-based recommendations on preventive health care.

When Congress passed the ACA in 2010, it leveraged off of the existence of the Task Force by requiring health plans to cover its recommended preventive services without any cost-sharing requirements. One such service is Apretude for pre-exposure prophylaxis (known as PrEP), a medication used to prevent HIV. However, some employers have objected to covering certain services –like PrEP–arguing that they prevent health conditions that those sponsors believe result from life styles that are in conflict with their religious beliefs.

The Braidwood Challenge

One such employer, Braidwood Management, Inc., served as lead plaintiff challenging the ACA’s preventive care mandate in Kennedy v. Braidwood Management, Inc. The plaintiffs argued that the Task Force members were unconstitutionally appointed because they were not nominated by the President and confirmed by the Senate. They claimed that this invalidated the Task Force’s recommendations, and, by extension, the ACA’s preventive care requirements.

The U.S. District Court for the Northern District of Texas and the Fifth Circuit Court of Appeals agreed with the plaintiffs, ruling that the Task Force members were improperly appointed under the Constitution’s Appointments Clause.

Despite the change in administration, the current Trump administration continued to pursue the appeal of the Fifth Circuit decision to the Supreme Court, defending the ACA’s preventive care provisions.

The Supreme Court’s Decision

The Supreme Court reversed the Fifth Circuit’s decision, holding that Task Force members are “inferior officers” whose appointments by the HHS Secretary are consistent with the Appointments Clause. The Court clarified that only “principal officers” must be appointed by the President with the advice and consent of the Senate. Congress may allow inferior officers to be appointed by department heads, which it did in this case.

The Court also emphasized that the Task Force operations are under the supervision of the HHS Secretary, who retains the authority to review, block or remove members and their recommendations.

What This Means for Employers and Insurers 

The ruling preserves the ACA’s preventive care mandate, meaning employer-sponsored health plans must continue to cover Task Force-recommended services without cost sharing. Notably, however, there may still be exemptions from ACA mandates for employers with sincerely held religious beliefs. For plan sponsors, it’s business as usual—no immediate changes are required to plan design or coverage.  

This was captured well waiting for the doctor who was busy at the time
Hush Naidoo Jade Photography, Unsplash

Seyfarth Synopsis: In the wake of a recent federal District Court decision, the reproductive health care HIPAA Privacy rules finalized during the Biden Administration have been vacated and plan sponsors should re-evaluate the language included in their HIPAA compliance documents.

In a somewhat unsurprising turn of events, a Texas District Court vacated the HIPAA Privacy Rule to Support Reproductive Health Care Privacy (Final Rule) that added specific protections and obligations relating to reproductive health data under the HIPAA Privacy rules. In Purl v. United States Department of Health and Human Services, the U.S. District Court for the North District of Texas held that the Final Rule exceeded the Department of Health and Human Services’ statutory authority, specifically noting the Department unlawfully tried to restrict and preempt state laws relating to public health, reporting obligations, and more. Although Covered Entities must continue to protect reproductive health information under the standard federal protections HIPAA affords to protected health information, the heightened restrictions and obligations imposed by the Final Rule on reproductive health care data will no longer be enforced nationwide. However, although the reproductive health care data requirements were vacated, the District Court left in place specific requirements relating to substance use disorder records under Part 2.

Plan Sponsor and Covered Entity Considerations

Given that the ruling is unlikely to be challenged by the Department under the current administration, Plan Sponsors and Covered Entities should review their HIPAA Privacy Policy, HIPAA Notice of Privacy Practices, business associate agreements, and any other related HIPAA Privacy documentation to determine whether any updates are needed. Plan sponsors that added language to their documentation relating to reproductive health care protections to comply with the Final Rule should evaluate whether this language should now be removed. Reach out to your trusted Seyfarth employee benefits attorney if you have compliance questions.

By: Sam Schwartz-Fenwick

In a widely awaited for decision, the Supreme Court in a 6-3 opinion authored by Justice Roberts held that a Tennessee law which prohibits certain medical treatments (puberty blockers and hormones) for transgender minors, does not violate the Equal Protection Clause of the Fourteenth Amendment. (Justice Alito concurred in part and joined in part with the Majority)

Justice Roberts analyzed the law under a rational basis review, not the heightened scrutiny called for by the transgender plaintiffs in the case.  The Majority found the law was constitutional under this standard due to the legitimate interest of the Tennessee legislature in preventing harm associated with using puberty blockers to treat gender dysphoria in minors.  The Court reached this holding while acknowledging that under Tennessee law puberty blockers remain a legal treatment of minors for conditions other than gender dysphoria. The Court found this distinction did not create an unlawful sex-based distinction. “The law does not prohibit conduct for one sex that it permits for the other. Under SB1, no minor may be administered puberty blockers or hormones to treat gender dysphoria, gender identity disorder, or gender incongruence; minors of any sex may be administered puberty blockers or hormones for other purpose.” The Court noted that this reasoning was in accord with Bostock, as even if that decision based in Title VII applied to a constitutional analysis, the fact would remain in the Majority’s view that neither sex nor transgender status were the but-for-cause of the prohibition on treatment.

In a searing dissent, Justice Sotomayor wrote the law at issue was unconstitutional as it targets transgender minors by denying them treatments available to others. The dissent noted that heightened scrutiny was required in cases like this that treat people differently based on sex. In her framing of the statute “Male (but not female) adolescents can receive medicines that help them look like boys, and female (but not male) adolescents can receive medicines that help them look like girls.” She rejected the medical uncertainty referenced by the Majority, and noted “the American Academy of Pediatrics, American Medical Association, American Psychiatric Association, American Psychological Association, and American Academy of Child Adolescent Psychiatry all agree that hormones and puberty blockers are appropriate and medically necessary to treat gender dysphoria when clinically indicated.” (Justice Kagan agreed that analysis of the law required heightened scrutiny but did not opine as to whether or not the law met this test).

This decision will have significant consequences as over 20 states have enacted bans similar to the law in Tennessee in that it will preclude children in these jurisdictions from medically treating gender dysphoria. It is uncertain what impact these statutes will have on the ability of employee benefit plans to continue to offer gender dysphoria coverage to minors. It is possible that employers and their plans that offer such benefits may be targeted for aiding a crime under some state statutes. In addition, it is possible that the DOJ’s recent initiative under Attorney General Bondi to investigate and aid criminal prosecutions related to gender affirming care will target parents of transgender children (i.e. employees) and benefit plans.  Whether or not this transpires is unknown, and it is recommended that in light of this decision benefit plans review their benefit offerings in close contact with legal counsel.

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We’re proud to share that Seyfarth’s Beneficially Yours blog has been ranked #1 on FeedSpot’s list of the Top 35 ERISA blogs.

Compiled from thousands of blogs, FeedSpot’s list highlights leading sources based on web traffic, social media engagement, domain authority, and content freshness.

Edited by Diane Dygert and Richard Schwartz, Beneficially Yours covers the latest hot topics related to ERISA and employee benefits, ranging from litigation trends to compliance issues. Our ERISA litigation team, together with our Employee Benefits and Executive Compensation team, draw on their first-hand experience in handling ERISA and employee benefits matters to provide timely insights on cutting-edge issues in the field.

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Seyfarth Synopsis: As expected, the lawsuits have commenced following the enactment of the Arkansas legislation prohibiting pharmacy benefit managers (PBM’s) from owning or operating actual pharmacies within the state. Michigan has filed its own lawsuit against PBMs. Further, a similar bill targeting PBMs is winding its way through the Illinois legislature.

Arkansas Law

As we discussed in our blog post here, Arkansas recently became the first state in the nation to prohibit licenses for retail, mail order or specialty pharmacies that are owned (directly or indirectly) by a PBM. The law does contain a limited exception that allows the issuance of licenses to PBM-affiliated pharmacies for certain rare, orphan, or limited distribution drugs, but this window for exceptions closes in September 2027 (presumably intended to provide a transition period to source these drugs through pharmacies not affiliated with PBMs). 

PBM Reaction

Two lawsuits have now been filed by PBMs challenging Arkansas’ authority to pass this legislation. The lawsuits allege harm to residents of Arkansas by causing the closure of many brick and mortar pharmacies across the state and the inability to access mail-order pharmacies. Express Scripts, in its suit, argues that the Arkansas state law violates several provisions of the United States Constitution, claiming that:

  • the intended purpose of the state statute — to protect local pharmacies — violates the Commerce Clause.
  • the protectionist purpose of burdening out-of-state citizens violates the Privileges and Immunities Clause
  • the singling out of PBMs and their affiliated pharmacies for punishment violates the Attainder Clause, which bars legislative punishment (including banishment) of specific groups.

Because Express Scripts and its affiliates provide services to the US Defense Department’s TRICARE program, the suit also claims that the state statute is preempted by the federal law and regulations surrounding that program.

Arkansas has not yet filed its response to the suits.

Continue Reading States Seeking Remedies for the Rising Costs of Prescription Drugs
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Seyfarth Synopsis: On May 15, 2025 the Departments of Labor, Health and Human Services, and Treasury (the “Departments”) announced they will temporarily not enforce their new standards published under the mental health parity Final Rule last fall. However, the earlier final rules and the statute itself remain in place and plan sponsors and fiduciaries should continue to prepare the comparative analyses required by the Consolidated Appropriations Act, 2021 (“CAA”) and monitor their plan design for any limitations on mental health and substance use disorder benefits that may violate the Mental Health Parity and Addiction Equity Act (“MHPAEA”).

Since the passage of the CAA, plan sponsors, administrators, and fiduciaries have agonized over how to comply with the requirement that medical and prescription drug plans perform and document a written analysis of their non-quantitative treatment limitations (“NQTLs”). In September 2024, the Biden administration published a Final Rule that added multiple complex and onerous content requirements to the NQTL comparative analysis, causing even more panic and uncertainty as many struggled to understand how to apply the rules and comply with the new regulations. In response to employer dissatisfaction with the new standards under the Final Rule, the ERISA Industry Committee (“ERIC”) filed a lawsuit challenging the Final Rule on numerous grounds.

In connection with President Trump’s Executive Order 14219, which directs federal agencies to review agency regulations that have unduly burdensome requirements and high costs for private parties and small businesses, the Departments issued a statement on May 15, 2025 announcing a policy of nonenforcement with respect to the Final Rule. Additionally, the Departments indicated they may issue a notice of proposed rulemaking either rescinding or modifying the Final Rule.

Importantly, while this non-enforcement policy is directed at the Final Rule, it does not apply to the underlying NQTL comparative analysis requirement itself, which is part of the original language in the CAA (although the Departments noted they will generally engage in a broad of review of the mental health parity provisions under the CAA). Further, it does not apply to the underlying parity rules under MHPAEA that have been in place over a decade, which require employers to ensure that the limits on mental health and substance use disorder benefits are no more restrictive than those applied to medical and surgical benefits (to the extent mental health benefits are covered). As such, plan sponsors, administrators, and fiduciaries should continue to work toward compliance with the NQTL comparative analysis requirement, keeping in mind that the complex content requirements added last year may be going by the wayside.

The non-enforcement relief would apply to several of the more onerous requirements under the final rule, however, most notably including:

  • Meaningful Benefits Standard.  The Final Rule would have required that plans provide “meaningful benefits” for mental health/substance use disorder benefits in any category where the plan provides medical/surgical benefits.
  • Production of Comparative Analysis in Response to Participant Requests or in Connection to Claim for Benefits.  The Final Rule would have required that ERISA plan sponsors produce a copy of the comparative analysis within 30 day of a participant request (essentially treating this analysis as an “operative plan document” for purposes of ERISA 104(b)(4)).  Similarly, it would have required that all plans produce a copy of the comparative analysis in connection with a claim for mental health or substance use disorder benefits denied on the basis of an NQTL imposed by the plan. 
  • Fiduciary Certification.  The Final Rule would have required that ERISA plan fiduciaries certify that they have engaged a “qualified service provider” to prepare the plan’s comparative analysis. 

Because these standards derive from the Final Rule, they should fall under the DOL’s non-enforcement standard. 

Notably, however, the DOL’s non-enforcement standard does not protect plans from potential private enforcement action by plan participants.  While courts may decline to enforce standards declared to be under review by the DOL, they would have the discretion to interpret applicability of these regulations to plans as they see fit.  Moreover, the DOL and plan participants could continue to enforce/seek enforcement of the 2013 rules and the statutory requirements under the CAA. 

Additionally, plan sponsors and fiduciaries should continue to review their plan design for potentially problematic limitations, paying particularly close attention to those limitations that have publicly been identified by the Departments as widespread problems.

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Seyfarth is proud to serve as a Gold sponsor of the International Employment Lawyer (IEL) Executive Compensation & Benefits Summit, taking place May 27, 2025, in New York City. This prestigious global event brings together leading legal and HR professionals to explore the evolving landscape of executive pay, incentive design, and cross-border benefits strategy.

As part of the day’s programming, Seyfarth Employee Benefits & Executive Compensation partner Alan Wilmit will serve as a featured panelist on the session titled “Changing Governments and Their Impact on Executive Pay Structures.” This timely discussion will examine how political transitions, regulatory reform, and shifting public sentiment are influencing compensation policies in the US and around the world.

Alan brings deep experience advising multinational employers on the tax, governance, and disclosure implications of executive pay—particularly in periods of policy uncertainty. He will join a panel of international experts offering comparative insights and best practices for navigating political change in both mature and emerging markets.

To learn more about the summit, visit the International Employment Lawyer website.

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Seyfarth Synopsis: Arkansas has become the first state in the nation to enact legislation, effective starting in 2026, prohibiting pharmacy benefit managers (PBMs) from owning or operating actual pharmacies within the state. We take a look at what that may mean for employers sponsoring health plans with pharmacy benefits in the state.

Background on PBMs Role in the Marketplace

PBMs have become a unifying scapegoat in the escalating concern about the cost of prescription drug coverage in the country. So, it becomes important to understand what role they really play. PBMs act as a middle man of sorts for the prescription drug coverage offered by many employer health benefit plans. With the ever-expanding universe of prescription drugs, including the many specialty drugs that are being offered and widely advertised to the public, it is difficult for plan sponsors to be able to directly manage this benefit. PBMs grew up as an answer to the needs for a third party to administer drug coverage under plans. 

Continue Reading Cutting Out the Middle Man
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Seyfarth Synopsis: In a unanimous decision reversing dismissal of prohibited transaction claims based on fees paid to defined contribution plan recordkeepers, the Supreme Court held that ERISA’s prohibited transaction exemptions are affirmative defenses, and do not present additional pleading elements plaintiffs must satisfy to state viable claims. While acknowledging the decision may allow plaintiffs to survive dismissal with “barebones” allegations, the Court held that the practical concerns of an increase in meritless litigation cannot overcome the statutory text and structure.

Click here to read the full Legal Update.