TIP: Creditable Coverage Notices

Employers are confused about which plan year needs to be addressed in the Medicare Part D creditable coverage notice, especially those employers who are trying to distribute a notice to eligible individuals by October 15 to align with Medicare’s open enrollment period.

First of all, it’s helpful to clarify that the creditable coverage notice isn’t technically required to be distributed in the fall if the employer distributes it upon initial eligibility and during open enrollment each year. CMS does require that the notice be distributed prior to October 15, but that requirement is met so long as it has been distributed within the 12 months prior to October 15. If the notice is distributed during open enrollment each year, it makes it easier to address the creditable status for the upcoming plan year. However, if the notice is distributed in the early fall, or creditable status isn’t yet known during open enrollment, the best the employer can do is communicate the creditable status of the current plan. Then, if creditable status changes upon the 2026 renewal, the employer would be obligated to send out an additional notice letting eligible individuals know that the creditable status of the plan has changed.

Draft ACA Reporting Instructions

The IRS has released the draft 2025 instructions for Forms 1094-C and 1095-C. There are no significant changes from the prior year’s instructions other than updated due dates and penalty amounts. For 2025 reporting (covering the 2024 calendar year), statements must be furnished to employees or a notice of availability posted by March 2, 2025, and electronic filing with the IRS is due by March 31, 2025. The maximum penalty for reporting failures has increased to $340 per form. While we will need to wait until the final instructions are issued, it is unlikely there will be substantial changes from the draft version.

The draft 2025 Instructions for Forms 1094-C and 1095-C can be found here.

In addition, Publication 5165 (Rev. 7-2025), which provides a guide for electronically filing the ACA information returns, can be found here.

DOL Spring Agenda

The Department of Labor’s Spring 2025 regulatory agenda includes several health and welfare benefit plan initiatives focused on transparency, nondiscrimination, and disclosure requirements. Overall, the agenda shows a continued regulatory push toward participant protections and plan transparency. Items of interest for health and welfare benefits include:

• Default electronic disclosure/notice rules;
• Further transparency into pharmacy benefit manager fee disclosures;
• Guidance for the advanced explanation of benefits;
• Provider nondiscrimination requirements;
• Requirements for air ambulance services; and
• Clarification for broker disclosures.

The DOL’s full spring agenda (Agency Rule List – Spring 2025) can be found here.

Certain Marketplace Changes Paused

On August 22, 2025, a U.S. District Court Judge issued a preliminary injunction blocking several provisions of the new “Marketplace Integrity and Affordability Rule,” which had been set to take effect shortly and would likely have affected coverage for individuals beginning in 2026. The rule would have imposed stricter income verification, premium penalties for auto-re-enrollees, exclusions for individuals with unpaid premiums, and tighter eligibility checks for special enrollment periods. The judge found that plaintiffs were likely to succeed on their Administrative Procedure Act claims and that the changes risked irreparable harm by pushing millions off coverage. Some provisions of the rule will proceed (e.g., changes to cost-sharing calculations and the elimination of the 60-day reconciliation window for income discrepancies), but the ruling temporarily preserves broader access to Marketplace individual coverage while litigation continues over whether the rule unlawfully undermines the ACA’s protections.

The text of the opinion can be found here.

Provider Directories – Ghost Networks

A growing wave of lawsuits target inaccurate provider directories, primarily focused on mental health providers, resulting in some significant settlement payments and corrective action. Research revealed that many mental health providers listed in plan directories were unreachable, not accepting patients, or not actually in-network—commonly referred to as “ghost providers.” For employers sponsoring group health plans, this poses both a compliance and a reputational concern. Employers are encouraged to push their carriers and TPAs to perform regular provider verification (at least quarterly) and to provide transparency regarding how inaccuracy is detected and addressed.

Short-Term Limited Duration Insurance – Possible Resurgence?

Individual short-term limited duration insurance (STLDI) plans are not subject to the same requirements as comprehensive individual health insurance and may exclude coverage for pre-existing conditions. Historically, STLDI plans were limited to a maximum of three months of coverage. In 2018, the Trump administration expanded these plans, allowing for initial coverage of up to 12 months with renewals permitted for up to 36 months total. In contrast, the Biden administration issued final rules—effective in late 2024—restricting STLDI coverage to a maximum of three months, with a one-month extension permitted in certain cases, and requiring enhanced consumer notices.

Recent guidance from the Trump administration indicates an intent to roll back the Biden-era restrictions and restore the longer duration limits, potentially allowing policies to extend up to one year with renewals for a total of three years. While formal rulemaking is pending, the administration has announced that it will not enforce the 2024 rules in the interim. Note: Despite this federal non-enforcement stance, many states continue to impose their own restrictions on, or may even prohibit, STLDI plans.

The statement can be found here.

Court Decision – MHPAEA Enforcement 

A recent federal district court’s ruling in Perrone v. Blue Cross Blue Shield of Michigan reinforces that health plan participants can pursue Mental Health Parity & Addiction Equity Act (MHPAEA) claims under ERISA, making clear that mental health parity violations are judicially enforceable. This decision contributes to a growing body of case law showing that courts are willing to entertain MHPAEA lawsuits claiming a lack of parity in how a plan treats mental health or substance use disorder (MH/SUD) benefits compared to medical/surgical ones. The case highlights the growing importance of proactively auditing any financial requirements or treatment limitations imposed on MH/SUD benefits—particularly non-quantitative treatment limitations (NQTLs) like network restrictions and utilization management—and thoroughly documenting these reviews as part of the required NQTL written comparative analysis.

The full text of the court opinion can be found here.

Prescription Drug Management

The Trump administration continues to advance its commitment to lowering prescription drug prices, centered on a revived “Most-Favored-Nation” model. A recent executive order directs federal agencies to benchmark U.S. drug prices against the lowest prices paid in comparable countries, while also expanding direct purchasing and drug re-importation programs. To further pressure manufacturers, the administration has threatened steep tariffs on imported pharmaceuticals.

At the state level, legislatures have introduced over 800 bills in 2025 to improve prescription access and reduce consumer costs. These proposals include capping out-of-pocket expenses, regulating pharmacy benefit managers (PBMs), supporting state affordability boards, and addressing high-cost therapies and pricing trends. An overview of state efforts is available in the National Conference of State Legislatures’ (NCSL) summary: This Year’s Prescription Drug Bills Aim to Reduce Consumer Costs

While state initiatives focus on consumer protections and targeted regulatory reforms, the federal strategy under the Trump administration leans heavily on international price comparisons, trade leverage, and structural market changes. We can only hope these combined efforts will eventually lead to more affordable prescription drugs.

Updated CHIP Model Notice

The DOL provided an updated CHIP model notice with information that is current as of July 31, 2025. The State Premium Assistance Notice for Medicaid and CHIP informs employees of potential opportunities for premium assistance available in the state in which they reside. Employers are required to distribute the CHIP notice annually to all eligible employees who live in a state offering premium assistance, so most employers distribute the notice to all employees who are eligible for the employer’s group health plan during each open enrollment, likely as part of their benefits summary or in an annual notices packet. Employers should always grab the most current model notice when distributing the notice.

The recently updated version of the CHIP notice can be found here.

PCORI Fee Reminder

The PCORI fee for group health plans that ended sometime during 2024 must be reported and paid by July 31, 2025. Health insurance carriers pay the fee on behalf of fully-insured plans, but employers are responsible for reporting and paying the fee for any self-funded group health plans, including HRAs. The fees due in July 2025 are as follows:

• $3.22 per covered life for plan years ending in January – September 2024.
• $3.47 per covered life for plan years ending in October – December 2025.

Average covered lives used for reporting and paying the PCORI fee may be determined using one of three methods: (i) the actual count method; (ii) the snapshot method; or (iii) the Form 5500 method. The fee is reported and paid by employers sponsoring self-funded group health plans using quarterly excise tax Form 720, Line 133(c) and (d), and should be filed for the 2nd quarter ending June 30th, 2025.

Form 5500 Extensions – Calendar Year Plans

The Form 5500 for an ERISA plan is due the last day of the seventh month after the end of the ERISA plan year, including short plan years. So, for a calendar year plan, the Form 5500 is generally due on July 31st. An extension of up to 2 1/2 months is available for employers that request an extension using Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns). Form 5558 must be filed with the IRS, not with the DOL. If Form 5558 is filed on or before the normal due date of the Form 5500, the extension request will be automatically granted; no approval is necessary. For a calendar-year plan, the 2 1/2-month extension will result in a Form 5500 due date of October 15th.

More information about Form 5558 can be found here.