Spotlight on Benefits

Reminder: The CARES Act High-Deductible Health Plan Telehealth Rule Has Expired

Effective January 1, 2025, the special COVID-era rule under the CARES Act that allowed employers sponsoring high-deductible health plans to provide free telehealth visits without affecting employees’ eligibility to contribute to health savings accounts (HSA) has expired. Employers must now either ensure that telehealth services are preventive or subject to the plan’s deductible, or they must charge for such services in order to maintain HSA eligibility for their employees.

As noted in our prior blog post on health plan coverage post-COVID-19 emergencies, for plan years beginning on or after January 1, 2020, through December 31, 2024, employers that sponsor high-deductible health plans could, but were not required to, offer free telehealth services before meeting the plan’s deductible without affecting participants’ eligibility to contribute to an HSA.

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Stop the Presses – Annual Funding Notice Guidance Issued

On April 3, 2025, the Department of Labor (DOL) issued guidance on the Annual Funding Notice changes made by the SECURE Act 2.0 and provided model notices. Pension plan administrators should review and revise their annual funding notices in light of the new guidance.

Background

Section 343 of SECURE Act 2.0, passed December 29, 2022, implemented changes to the annual funding notice provided to defined benefit pension plan participants. The changes became effective for plan years beginning after December 31, 2023. For calendar year pension plans, the 2024 Annual Funding Notice (due no later than April 30, 2025) would be the first notice implementing the new rules. The DOL had not issued guidance or provided a model notice until the afternoon of April 3, 2025.

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(Auto) Enroll With It: Understanding the New Automatic Enrollment Requirements

On January 10, 2025, the Treasury Department and the Internal Revenue Service issued Proposed Regulations on the automatic enrollment requirements introduced by SECURE 2.0. The Proposed Regulations incorporate and expand upon previously issued interim guidance under IRS Notice 2024-2 and address various open issues.

SECURE 2.0

SECURE 2.0 generally requires that new 401(k) and 403(b) plans that are established on or after December 29, 2022 (the “enactment date”), automatically enroll employees at a uniform contribution rate of 3% (but not more than 10%) and also automatically increase the contribution rate by 1% annually, up to at least 10% (with a cap at 15%).

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New Self-Correction Component under the DOL’s Voluntary Fiduciary Correction Program

The Voluntary Fiduciary Correction Program (VFCP) has long been a source of reprieve to plan sponsors and fiduciaries from enforcement actions by the Department of Labor (DOL), by allowing the voluntary correction of a number of Employee Retirement Income Security Act (ERISA) violations before potential agency intervention. In coming forward and voluntarily correcting certain errors, the DOL continues to encourage plan sponsors and fiduciaries to engage in such behavior by issuing letters to those who have accepted VFCP submissions stating that the agency will not take any further action and will not pursue civil penalties on those matters. However, VFCP submissions require detailed applications which can be time-consuming and costly to prepare in comparison to the potentially minor correction that they are intended to rectify.

On January 15, 2025, the DOL’s Employee Benefits Security Administration (EBSA) amended and restated the VFCP, including finalized amendments to Prohibited Transaction Exception (PTE) 2002-51, to be effective March 17, 2025.

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ERISA Moments Ep. 31: The Trump Administration Policies for Retirement Plans

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, The Trump Administration Policies for Retirement Plans, below.

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Affordable Care Act Penalty and Reporting Relief

The Employer Reporting Improvement Act and the Paperwork Burden Reduction Act (PBA), each signed into law in December 2024, provide the following penalty and reporting relief for plan sponsors required to provide minimum essential coverage in accordance with the requirements of the Patient Protection and Affordable Care Act (ACA):

An individual’s date of birth may be used as a substitute when the individual does not have a tax identification number (TIN) for ACA reporting due in 2025 and after.

Reminder: Until further guidance is issued, to ensure that the reasonable cause exception from ACA reporting penalties is retained, plan sponsors should continue to solicit the individual’s TIN three times: (i) as part of the application for enrollment in the plan, (ii) within 75 days after the application is received and (iii) by December 31 of the year after the initial solicitation.

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ERISA Moments Ep. 30: DOL Investigations: Priorities for 2025

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Second Circuit Adopts “Meaningful Benchmark” Pleading Standard in ERISA Cases

In Singh v. Deloitte LLP, et al., No. 23-1108, 2024 WL 5049345 (2d Cir. Dec. 10, 2024), the Second Circuit Court of Appeals upheld a district court’s dismissal of a complaint alleging that plan fiduciaries caused an ERISA-governed 401(k) plan to pay excessive recordkeeping fees. This article discusses the Singh case and its impact on excessive-fee claims.

As more and more employers face lawsuits alleging that their 401(k) plans paid excessive recordkeeping and administrative fees, courts continue to grapple with the standard required for plaintiffs to plead plausible claims that survive motions to dismiss. The Second Circuit is the most recent Court of Appeals to adopt the “meaningful benchmark” pleading standard for claims alleging excessive recordkeeping or administrative fees, and it is among the most stringent pleading standards yet.

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DOL Lost & Found Database for Retirement Savings Goes Live

If you have ever found $10 in the pocket of a coat that you have not worn for some time, you are familiar with the delight of finding lost money that belongs to you. The Department of Labor’s new Retirement Savings Lost & Found Database (Database) seeks to recreate that feeling in the employee benefits realm by reuniting missing participants and beneficiaries with benefits they may have accrued under job-based retirement plans.

The importance of locating missing participants

Taking steps to find participants and beneficiaries who may be owed a benefit is important to companies that sponsor retirement plans for several reasons.

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PBGC Issues Technical Update on Accelerated Due Date for 2025 Premium Filings

The Pension Benefit Guaranty Corporation (PBGC) has issued its first technical update of the year to provide guidance on the accelerated premium filing date for plan years that begin in 2025.

As required by a provision in the Bipartisan Budget Act of 2015, for plan years that begin in 2025, the PBGC premium filing due date for all plans is the 15^th day of the 9^th calendar month that begins on or after the first day of the plan year. This is a change from the normal due date under the PBGC regulations, which is the 15^th day of the 10^th calendar month that begins on or after the first day of the plan year. The provision also supersedes the special due dates that typically apply for certain new plans and plans that complete a standard termination before the normal premium due date.

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