Seyfarth Synopsis: Orders issued by the Eastern District of Texas on Thursday July 25 and the Northern District of Texas on Friday July 26 indefinitely delayed the September 23, 2024 effective date of the Department of Labor’s revised regulation defining when a party becomes an “investment advice” fiduciary (the “New Fiduciary Rule”) and amendments to seven related prohibited transaction exemptions (“PTEs”).

In Federation of Americans for Consumer Choice v. Department of Labor (the “FACC Case”), the plaintiffs, a trade group representing the insurance industry, whose mission is “to promote a level playing field for independent insurance professionals by advocating and influencing practices, regulations, and legislation that foster consumer choice” and certain insurance professionals who are members of FACC, challenged the New Fiduciary Rule and amendments to PTE 84-24 (“PTE 84-14 Amendments”) under the Administrative Procedures Act (the “APA”). The plaintiffs moved for a stay of the effective date of New Fiduciary Rule and the PTE 84-24 Amendments, or a preliminary injunction prohibiting enforcement of the New Fiduciary Rule and PTE 84-24 Amendments, while the FACC Case is pending.Continue Reading Two Texas District Courts Issue Orders Delaying the Effective Date of DOL Fiduciary Rule and Related Amendments to Seven Prohibited Transaction Exemptions

Seyfarth Synopsis: In light of a recent focus on price transparency, claims data, and hidden fees in the health plan world, employer-sponsored health plans have been bringing their fight to the courtroom in an effort to lower costs and demonstrate good fiduciary governance.

In the wake of the Consolidated Appropriations Act, as well as newly-issued transparency regulations, employers sponsoring group health plans now have access to (or should have access to) a bevy of data not previously available in the notoriously secretive space of health plan pricing. As predicted, this new era of information transparency has spurred a small but growing stream of lawsuits. Surprisingly though, the plaintiffs in these suits are plan sponsors (or their committees) in their role as plan administrator, as opposed to plan participants, and the defendants are health plan third-party administrators rather than the plans themselves. In light of these recent lawsuits, this post focuses on fiduciary considerations for health plans in this new era of fee and price transparency.

While each lawsuit filed to date has unique aspects, they all generally allege some combination of the following:

  • Failure to adequately and fully disclose payment data as required by law;
  • Imposition of hidden and unreasonable fees;
  • Breach of fiduciary duty; and
  • Claims mismanagement and overpayment.

Continue Reading Who Do I Need to Sue to Get a Decent Cup of Coffee? Jittery Fiduciaries Consider Options as Health Plan Litigation Froths Up