On May 15, 2025, the Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) announced a pause in enforcement of the final rule (the “2024 Final Rule”) to the Mental Health Parity and Addiction Equity Act (“MHPAEA”). The 2024 Final Rule was issued in September 2024, and imposed significant new compliance requirements on plan sponsors. The Departments also announced that they would be undertaking a broad reexamination of each Departments’ enforcement approach under MHPAEA. This pause was not unexpected,  as it had been telegraphed a week earlier in a filing by the federal government in a lawsuit challenging the 2024 Final Rule. Below is an overview of this enforcement pause and what it means for plan sponsors. 2024 Final Rule  The 2024 Final Rule amended prior MHPAEA regulations issued in 2013 (the “2013 Final Rule”) and added new rules implementing the nonquantitative treatment limitation (“NQTL”) comparative

In a decision with far-reaching implications, the U.S. District Court for the Northern District of Texas, issued a decision in Faulk Company, Inc. v. Xavier Becerra et al., invalidating an assessment against Faulk Company for failure to provide its employees with health coverage.​ This assessment, called an Employer Shared Responsibility Payment (“ESRP”), is an excise tax that is assessed against employers of a certain size who fail to offer their full-time employees health coverage that meets applicable requirements of the Affordable Care Act (“ACA”). More importantly, the Court also invalidated the regulations by which the Internal Revenue Service (“IRS”) assesses the ESRP. If not overturned by an appellate court, this decision could arguably result in the invalidation of all ESRPs previously assessed by the IRS. The Court’s decision relies on an interpretation of the interaction between two provisions of the ACA, each under the jurisdiction of a different agency: (i) Section

Over the past two decades, a lot of (very expensive) ink has been spilled in courts around the country in ERISA litigation cases regarding a single question: how much does a plaintiff need to say in a complaint alleging that a prohibited transaction has occurred, to survive an early motion to dismiss? The question seems very academic, at first, but the answer has significant implications for sponsors and fiduciaries of employee benefit plans. On April 17, 2025, a unanimous Supreme Court weighed in, resolved a split between federal circuit courts and put the issue to rest, concluding that plaintiffs alleging violations of ERISA’s prohibited transaction provisions need not plead facts to show that service provider arrangements are unreasonable, but rather that it is the burden of defendants to plead and prove that arrangements between plans and service providers are reasonable and no more than reasonable compensation is paid for those