Compliance Monthly Update
February 2025
A brief update on what happened the prior month in group health plan compliance at the federal level, organized chronologically. An update for the state and local level are further down. If you would like additional information, please reach out to the GBS Compliance Team.
Federal Compliance Update
Trump executive order on expanding access to IVF (no immediate impact on group health plans).
On February 18, President Trump signed an executive order directing the administration to develop policy recommendations (within 90 days) to protect and increase access to in vitro fertilization (IVF) services and to reduce the cost of IVF treatments. It is important to note that executive orders serve as a directive from the President—meaning they do not make any immediate changes to the law, but rather direct the federal agencies to take future action to align with the directive of the executive order. So, while this executive order has no immediate impact, it shows the administration’s intention to expand coverage for IVF services. Also, this executive order will have no immediate impact on current or soon to be implemented state IVF requirements (e.g., see our October 2025 state/local compliance update discussion on California’s new law requiring IVF coverage for group health plans beginning July 1, 2025). We will be monitoring for any federal action or guidance that comes about due to this executive order.
HHS rescinds prior guidance on gender care.
On February 20, HHS released a memo (and an associated press release) rescinding March 2022 guidance on federal civil rights protections and privacy laws that apply to gender care for transgender youth. The prior guidance stated that ACA Section 1557 protections extend to nondiscrimination on the basis of gender identity and sexual orientation—and that state laws restricting a provider’s ability to provide or prescribe gender care or requiring the reporting of such care to state authorities may violate Section 1557, HIPAA, and other federal laws. The new memo states that the 2022 guidance has been rescinded effective immediately, and covered entities should no longer rely on the rescinded guidance. It also states the previous interpretations of this section have been challenged in multiple court decisions and that the rescinded guidance no longer reflects HHS policy under the current administration.
IRS guidance on alternative furnishing method of ACA reporting forms.
On February 21, the IRS released Notice 2025-15 which provides guidance and details on the new optional alternative manner of furnishing Forms 1095-C under the December 2024 Paperwork Burden Reduction Act—where employers are no longer required to automatically furnish Forms 1095-C to individuals, unless the forms are requested, so long as timely notice is provided. Additional guidance was needed from the IRS on how to satisfy the notice requirement, which IRS Notice 2025-15 provides. This guidance mirrors prior guidance insurers could use for furnishing Forms 1095-B. Specifically, the notice must be posted on the employer’s website clearly and conspicuously (in a location on the website that is reasonably accessible to all full-time employees) with a statement that individuals may receive a copy of their forms upon request and must include an email address, a physical address, and a telephone number that individuals can contact if they have questions. The notice must be posted by the due date for furnishing the statement, including the automatic 30-day extension. For example, for 2024 statements, the notice must have been posted by March 3, 2025. If requested, Form 1095-C must be provided by the later of January 31 of the year following the year to which the form relates, or 30 days after request. So, for example, an employee who requests a copy of Form 1095-C in July 2025 must be furnished a copy of the 2024 Form 1095-C within 30 days, but would not be entitled to receive the 2025 Form 1095-C until January 31, 2026. Remember, (1) this guidance and new legislation only impacts federal ACA reporting requirements—state laws requiring distribution of the forms to individuals continue to apply and (2) forms must still be filed with the IRS even if an employer is utilizing this alternative furnishing method.
Trump executive order on transparency (no immediate impact on group health plans).
On February 25, President Trump signed another executive order directing the administration to rapidly implement and enforce prior healthcare price transparency regulations; ensure hospitals and insurers “disclose actual prices, not estimates;” and take action to make prices comparable across hospitals and insurers, including prescription drug prices. The order signals the administration’s renewed interest in health care price transparency. Note again that this executive order does not create new rules but simply directs the agencies to enforce existing rules and promulgate further guidance in this area. Many of the existing transparency rules are directed toward providers, but some impact group health plans and plan sponsors. While we await new rules in the coming months/years, in the meantime, plans should continue to comply with the transparency rules that have been in place for several years (most of which are implemented directly by the carrier or TPA, but some of which—such as RxDC reporting and the gag clause attestation—can require action by plan sponsors).
State/Local Compliance Update
A brief update on what happened the prior month in group health plan compliance at the state and local level, listed alphabetically. If you would like additional information, please reach out to the GBS Compliance Team.
Arkansas
Arkansas pharmacy compensation reporting under Rule 128.
Last year, Arkansas issued Rule 128: Fair and Reasonable Pharmacy Reimbursements that requires health plans subject to the Arkansas Pharmacy Benefit Licensure Act to file a written report describing certain pharmacy compensation data. The data requirements are detailed in Bulletin # 18-2024. There is uncertainty on the interpretation of this rule, but here is a summary of the current guidance:
- Fully-insured health insurance carriers are required to file for their plans.
- In the Bulletin, Arkansas states that the “filing requirements … apply to self-funded employer plans and self-funded governmental health plans.” There is a potential ERISA preemption argument that this should not apply to self-funded plans, but until there is a legal challenge and court ruling on the ERISA preemption issue, Arkansas is taking the position that it will apply to self-funded plans.
- Self-funded plans with less than 5,000 plan participants that are Arkansas residents are exempt from all but one data reporting requirement and the Rule’s two-year phase in obligation. So, a self-funded group health plan that covers less than 5,000 Arkansas residents is only required to provide…
- The total annual average percentage of total pharmacy reimbursement above or relative to NADAC pricing (or WAC, wholesale acquisition cost if NADAC is unavailable) in the previous calendar year. Please provide such percentage also separately for generic drugs verses brand name drugs. (please also provide a median and 25th/75th percent calculation for total annual above NADAC pricing as well as for generic and brand name drugs relative to NADAC pricing).
- TPAs or PBMs of a self-funded plan may file the data on behalf of the plan. So, self-funded plan sponsors should check with their TPAs or PBMs to see if they are reporting on their behalf or simply providing the information to the plan for them to report.
- The filing deadlines are outlined in the Bulletin which provides a two-year phase in with “[the] objective … to provide staggered filing dates in 2025 to phase into a regular and repeating March 1 annual filing date for fully insured [and self-funded] health benefit plans filing a report under this Bulletin.” So, the filing deadlines are as follows:
- Plan year 2024 – submit data by February 17, 2025.
- Plan year 2025 – submit data by July 1, 2025.
- Plan years 2026+ – submit data by March 1 each year using the previous full year of plan data.
- * Self-funded health plans may file for reasonable extensions for required filings if the data or report requires information or calculations not available or in possession of the health plan.
Maryland
Maryland DOL proposes delay to paid family and medical leave program.
As background, the Maryland Family and Medical Leave Insurance (FAMLI) program was passed into law in 2022. It provides that all employers with Maryland employees would be required to provide covered employees with up to twelve weeks of paid family and medical leave, with the possibility of an additional twelve weeks of paid parental leave. After prior delays, employee contributions were scheduled to begin on July 1, 2025, with benefits commencing one year later on July 1, 2026. However, the Maryland Department of Labor is now proposing another delay until January 1, 2027 (for deductions) and January 1, 2028 (for benefits) “in order to provide employers and workers additional time before launch.” Legislative action will be required to enact this proposed delay. For more information, see the Maryland FAMLI website.
Michigan
Last-minute changes to Michigan’s Earned Sick Time Act.
On February 21, Governor Whitmer signed HB 4002 amending the state’s Earned Sick Time Act (ESTA). The changes are effective immediately. Highlights of the amendment include changes to: the definition of a covered employee; accrual and usage of earned sick time; carryover provisions; frontloading option; notice requirements; and effective dates. For more information, see the Michigan ESTA website.
