On January 22, the U.S. House of Representatives passed on a bipartisan basis HR 7148, the Consolidated Appropriations Act, 2026 (HR 7148). If it also wins passage in the Senate, the bill would, among other Trump administration priorities, impose new rules and requirements for pharmacy benefit managers (PBMs) and pharmacy benefit administration more generally. As with prior federal legislative proposals, HR 7148 attempts to bring more transparency to the administration of pharmacy benefits for both fully insured and self-funded groups and would impose enhanced transparency requirements for PBMs contracting with Medicare Part D prescription drug plans PDP sponsors. Specifically, among other requirements, HR 7148 proposes the following new rules and regulations impacting PBM arrangements:
IRS Announces 2026 Retirement Plan Limits: Modest Increases
The Internal Revenue Service (IRS) announced the 2026 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2026. Most of the dollar limits, including the elective deferral contribution limit for 401(k), 403(b), and 457(b) plans; the annual compensation limit under 401(a)(17); and the maximum annual contribution limit under Code Section 415(c) will increase from 2025 limits. The dollar limit for catch-up contributions for participants who attain age 60,61,62, or 63 in 2026 will remain the same.
Federal Court Finds No Monetary Damages in ERISA Fiduciary Breach Case, Orders Governance Changes
Last May, we provided a client alert about a recent federal district court case (Spence v. American Airlines, No. 4:23-cv-00552-O, 2025 WL 225127, at *2 (N.D. Tex. Jan. 10, 2025)), in which a plan sponsor and certain plan fiduciaries were found to have breached their ERISA fiduciary duty of loyalty based primarily on conduct related to proxy voting of securities held in certain of the 401(k) plans’ investment funds. At that time, the court left open the question of whether the breach resulted in any damages to the participants.
UPDATE – Form 5330 E-Filing Requirement Headache Relieved for 2024
In a blog post dated May 10, 2024, we discussed the Form 5330, an excise tax return used by certain employers and individuals to pay penalty taxes with respect to employee benefit plans, must be filed electronically for taxable years ending on or after December 31, 2023 if the filer is required to file at least 10 returns of any type. As described further in that blog post, this electronic filing requirement had the potential to create issues for sponsors of qualified retirement plans because there was not an Authorized e-file Provider (“AEP”) with the capability of electronically filing Forms 5330. Without relief from the Internal Revenue Service (“IRS”), employers would not have the option of filing the Forms 5330 by paper even with the lack of AEPs.
Form 5330 E-Filing Requirement Headache
The Form 5330, an excise tax return used by certain employers and individuals to pay penalty taxes, must be filed electronically for taxable years ending on or after December 31, 2023. As described below, this may create issues for sponsors of qualified retirement plans.
Final Rule Issued by OCR and CMS for Nondiscrimination Protections Under Section 1557 of the ACA
The U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) and the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule on April 26, 2024 (the “Final Rule”) under Section 1557 of the Affordable Care Act (“ACA”) after reviewing more than 85,000 comments from the public following the Proposed Rule.