Legislative and Regulatory Archives - Spotlight on Benefits

Increase to Dependent Care Flexible Spending Account Limit

On July 4, 2025, the Trump administration signed into law the final version of H.R. 1- One Big Beautiful Bill (OBBB). The OBBB includes various changes that affect employee benefits, including an optional increase to the annual amount an employer can allow an employee to contribute on a tax-favored basis to their dependent care assistance program/flexible spending account (FSA).

For plan years starting on or after January 1, 2026, the maximum dependent care FSA contribution limit will increase from $5,000 to $7,500 a year (and from $2,500 to $3,750 per year if married and filing taxes separately). This new dependent care FSA contribution limit is not indexed for inflation.

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Reproductive Health Information Protections Afforded by New HIPAA Privacy Guidance

On April 26, 2024, the U.S. Department of Health and Human Services (HHS) issued a Final Rule updating certain Health Insurance Portability and Accountability Act (HIPAA) privacy rules with respect to the disclosure of protected health information (PHI) related to reproductive health care. Essentially, the Final Rule prohibits a covered entity from using or disclosing PHI to conduct criminal, civil or administrative investigations, or to impose corresponding liability on a person seeking or providing lawful reproductive health care.

Reproductive health care is broadly defined as “health care that affects the health of the individual in all matters relating to the reproductive system and to its functions and processes.” The preamble provides a non-exhaustive list of examples, including contraception, fertility and infertility treatments, and pregnancy-related care.

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NLRB: Severance Pay Cannot Include Condition to Waive Rights Under NLRA

The decision of the National Labor Relations Board (the Board) in McLaren Macomb, 372 NLRB No. 58 ( Feb. 21, 2023), reinstates a limit on the confidentiality, non-disclosure, and non-disparagement clauses that employers may include in severance agreements with most of their lower-level employees. While the Board bills its decision as a return to the standard applied in earlier cases, this decision suggests that the Board will take a broader view of how such agreements infringe on employees’ rights under Section 7 of the National Labor Relations Act.

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The Annual Form 5500 Audit: DOL Broadens Criteria for Independent Qualified Public Accountants

The Department of Labor (DOL) recently removed one regulatory hurdle for public companies that maintain employee benefit plans subject to the Form 5500 requirement. Specifically, the DOL has relaxed the criteria for who qualifies as an “independent qualified public accountant,” or “IQPA.” This matters to employers because it will open the market to new accounting firms that can issue the accountant’s report for the Form 5500 annual filing. IQPAs are the auditors who issue the annual accountant’s report. While not all Form 5500-filers are subject to the accountant’s report requirement, ERISA-covered retirement plans (except for certain small retirement plans) and funded welfare plans must provide the accountant’s report annually.

Revising and restating its 1975 Interpretive Bulletin on the Independence of Employee Benefit Plan Accountants with new Interpretive Bulletin 2022-01, the DOL has changed its guidelines for determining the “independence” of an IQPA. Previously, an auditor could not be an IQPA for a plan if they, the accounting firm, or certain other “members” of the firm owned any direct or indirect financial interest in the plan sponsor during the period covered by the financial statements that are the subject of the audit or during the period of the professional engagement.

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ERISA Litigation Roundup: Legislation Update — House Passes ERISA Bill to End Arbitration and Firestone

Earlier this year we reported on the “Employee and Retiree Access to Justice Act,” which sought to render arbitration and class action waiver provisions, and discretionary authority for plan administrators, in ERISA plans unenforceable. On September 29, 2022, the U.S. House of Representatives passed the Mental Health Matters Act (the Act) — which encompasses the Employee and Retiree Access to Justice Act.

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IRS Relaxes Plan Amendment Deadlines for Changes Under the SECURE Act and Other Laws

The Internal Revenue Service recently granted plan sponsors additional time to amend retirement plans to reflect changes in law under: (i) Section 2203 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act); (ii) the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act); and (iii) Section 104 of the Bipartisan American Miners Act of 2019 (Miners Act).

Sponsors of qualified plans and non-governmental Section 403(b) plans (including collectively bargained plans) now have until December 31, 2025, to adopt certain plan amendments required by these recent changes in law or to conform the written plan to operational changes permitted by these laws.

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IRS Extends Temporary Relief from “Physical Presence” Requirement Through December 31, 2022

The IRS recently issued Notice 2022-27, providing a six-month extension of the temporary relief from the physical presence requirement for certain plan elections (including spousal consents) required to be witnessed by a plan representative or notary public. Issued in response to the COVID-19 pandemic, the IRS provided initial relief from the physical presence requirement for the period January 1through December 1, 2020, provided initial extended relief through June 30, 2021, and extended relief for a second time through June 30, 2022. Most recently, Notice 2022-27 extends the relief through December 31, 2022.

The temporary relief from the physical presence requirement applies to any participant election witnessed by a notary public of a state that permits remote electronic notarization or by a plan representative, if certain requirements are satisfied. We discussed those requirements in a prior blog post on this topic.

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Stay Tuned – the DOL Regulatory Agenda

The Department of Labor (“DOL”) recently published its Spring 2022 Regulatory Agenda, and here is a summary of several big ticket items:

ESG & ERISA: Plan sponsors and investment professionals have been waiting for final rules on the permissible use of environmental, social, and governance (“ESG”) considerations under ERISA when selecting plan investments and exercising shareholder rights with respect to plan assets. Based on the updated regulatory agenda, the DOL is planning to issue final ESG rules in December 2022.

Fiduciary Rule: Plan advisors and investment professionals have also been awaiting guidance on the DOL’s fiduciary rule re-write. The Trump era “fiduciary rule” is currently in effect and is a combination of a new and expansive definition of fiduciary advice and an exemption – PTE 2020-02 – from the prohibitions of ERISA and the Internal Revenue Code for certain conflicts of interest arising from nondiscretionary fiduciary recommendations. However, last year, the Biden administration announced that it is revisiting the definition of fiduciary investment advice and the requirements of various prohibited transaction exemptions. Based on the Agenda, we can expect a new proposed fiduciary rule in December 2022.

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ERISA Litigation Roundup: The End of Firestone?

The Employee and Retiree Access to Justice Act is — yes — another employee benefits bill recently introduced in both the House and Senate (see our other blog post on SECURE 2.0, already passed by the House and which now has a draft bill under review in the Senate Health, Education, Labor and Pensions Committee). In addition to seeking to eliminate individual arbitration as a method for resolving benefit denial and breach of fiduciary duty disputes under ERISA, the Employee and Retiree Access to Justice Act also seeks to invalidate discretionary clauses in ERISA-governed benefit plans. The prohibition of such clauses would eliminate deferential judicial review of benefit claim denials in court.

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IRS Pilots Pre-Examination Compliance Program for Retirement Plans

In its recent June Employee Plans newsletter, the Internal Revenue Service (IRS) announced the launch of a 90-day pre-examination compliance pilot program. Under the program, the IRS will notify a plan sponsor that its retirement plan has been selected for pre-examination. The notification will provide the sponsor with 90 days to review retirement plan documents and operations to determine compliance with current tax law. If the sponsor does not respond within 90 days, the IRS will contact the sponsor to schedule an examination.

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