Compliance News & Updates: February 4 , 2025 Issue

In our recent In Compliance Newsletter, we feature articles highlighting recent legislative changes and regulatory guidance for employer-sponsored benefit plans. Stay up-to-date on the always changing state of employee benefits compliance. Sign up for our Bi-Weekly In-Compliance Newsletter.

2025 Federal Poverty Levels Impact Employer Liability under Pay or Play Rules

The U.S. Department of Health and Human Services (HHS) updates federal poverty levels (FPLs) each year to determine eligibility for certain programs and benefits. HHS’ new guidelines set the 2025 FPL for an individual at $15,650 (up from $15,060 in 2024) in the 48 contiguous states and the District of Columbia. For Alaska and Hawaii, FPLs for an individual are $19,550 and $17,990, respectively (up from $18,810 and $17,310 in 2024). Read more>>

CMS Preserves Creditable Coverage Simplified Determination for 2025, Proposes Revised Method for 2026

In April 2024, the Centers for Medicare and Medicaid Services (CMS) issued Final Part D Redesign Program Instructions for calendar year 2025. On Jan. 10, 2025, CMS released Draft Part D Redesign Program Instructions for calendar year 2026. Both sets of instructions contain a detailed description of, and guidance related to, changes to the Part D benefit made by the Inflation Reduction Act of 2022 (IRA). Among other things, these changes impact the creditable coverage status of employer-sponsored prescription drug coverage. ​​​​​Read more >>

DOL Releases Audit Results of ERISA Enforcement During 2024

The U.S. Department of Labor (DOL) has released the results of its Employee Benefits Security Administration’s (EBSA) enforcement actions during fiscal year (FY) 2024. Read more >>

ERISA Fiduciary Breach Claims Dismissed in J&J Lawsuit

On Jan. 24, 2025, a U.S. District Court for the District of New Jersey dismissed two claims in a class-action lawsuit filed against Johnson & Johnson (J&J), which alleged that the company breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by mismanaging its prescription drug benefits plan, costing the plan and its participants millions of dollars due to higher out-of-pocket costs for prescription drugs and higher premiums, among other things. Read more >>

IRS Issues Revenue Ruling on Tax Treatment of State PFML Programs

The IRS has issued Revenue Ruling 2025-4, providing long-awaited guidance on the federal tax treatment of contributions and benefits under state paid family and medical leave (PFML) programs. The ruling addresses how federal income and employment tax rules apply to the programs and includes guidance on related reporting requirements. The guidance was issued Jan. 15, 2025. Read more>>

Medicare Part D Disclosures due by March 1, 2025 for Calendar Year Plans

Group health plan sponsors are required to complete an online disclosure form with the Centers for Medicare & Medicaid Services (CMS) on an annual basis and at other select times, indicating whether the plan’s prescription drug coverage is creditable or non-creditable. This disclosure requirement applies when an employer-sponsored group health plan provides prescription drug coverage to individuals who are eligible for coverage under Medicare Part D. Read more>>

Mental Health Parity Continues to Be a Top Enforcement Priority

The Employee Benefits Security Administration (EBSA) recently released its annual enforcement report on the Mental Health Parity and Addiction Equity Act (MHPAEA). EBSA is an agency within the U.S. Department of Labor (DOL). According to EBSA, MHPAEA compliance remains one of its top enforcement priorities. Read more>>

​​Top Health Plan Compliance Issues for 2025

Employers should be aware of the top compliance issues that may impact their health plan coverage for 2025. Some of these compliance issues are established requirements for employers, such as the new simplified reporting under the Affordable Care Act (ACA). Other compliance issues are anticipated developments employers should monitor, such as additional health care transparency requirements. It is uncertain what impact Republican control of Congress and the White House may have on health plan compliance issues, although there will likely be a shift in priorities related to health care policies. Read more>>

Trump Revokes Biden Executive Order Preventing Gender Identity and Sexual Orientation Discrimination

On Jan. 20, 2025, President Donald Trump issued an executive order (EO) to revoke EO 13988, signed by former President Joe Biden on Jan. 20, 2021. EO 13988 aimed to prevent and combat discrimination on the basis of an individual’s gender identity or sexual orientation, including in the workplace. Read more>>

Benefits and HR State Updates

California DIR Issues FAQs on Employment Laws and Wildfire

The California Department of Industrial Relations (DIR) has issued guidance for employers on the ongoing Los Angeles-area wildfires and laws enforced by the state labor commissioner. The guidance is in the form of answers to frequently asked questions (FAQs). Read more>>

Illinois Eliminates Subminimum Wages for Disabled Employees

On Jan. 21, 2025, Illinois enacted the Dignity in Pay Act (the Act), which phases out subminimum wage authorizations permitted under Section 14(c) of the Fair Labor Standards Act (FLSA) until they are completely eliminated in the state by Dec. 31, 2029. The Act took effect on Jan. 21, 2025. Read more>>

Massachusetts Issues FAQs for Upcoming Pay Transparency Law

The Massachusetts Executive Office of Labor and Workforce Development (LWD) recently published frequently asked questions (FAQs) regarding the state’s pay transparency law. The FAQs clarify certain pay data reporting requirements that take effect Feb. 1, 2025, but do not impose additional requirements. Read more>>

Ohio Enacts Wage Statement Law

On Jan. 8, 2025, Ohio enacted the Pay Stub Protection Act (the Act) requiring employers to provide earning and deduction statements to each employee. The Act becomes effective on April 9, 2025. Read more>>