Compliance Matters Newsletter | July 2026

Let our team help you navigate the ever-changing benefits compliance landscape each month. Check out this month’s latest alerts, additional updates, and resources hot off the press:

Employee Benefits Compliance Alerts

This month’s Compliance Matters newsletter provides a comprehensive review of the following topics. To obtain your copy, please use the form below to download.

• Federal Government Finalizes Rule Intended to Streamline Medical Billing Disputes
• BCBS Settlement Payments Have Arrived… Now What?
• Litigation Series: Hospitals Sue Over Anthem’s New Out-of-Network Policy
• State Series: State Mandated Vaccine and Immunization Assessment Programs

Additional Updates & Resources

Reminder! PCORI Due July 31

Employers who sponsored self-funded medical plans that ended sometime during 2025 are required to report and pay the Affordable Care Act (ACA) Patient-Centered Outcomes Research Institute (PCORI) fees no later than July 31, 2026. Fully insured plan sponsors can rely on their carriers to submit the fee on their behalf, but fully insured plan sponsors that sponsor a self-funded plan component, such as a health reimbursement arrangement (HRA), will need to file and pay for the self-funded component plan.

Payment amounts due in 2026 will differ based on the employer’s plan year. The Internal Revenue Service (IRS) provides a chart showing applicable fee amounts depending on the plan’s year-end date. The fees due in July 2026 are as follows:

• $3.47 per covered life for plan years ending after September 30, 2024, and before October 1, 2025
• $3.84 per covered life for plan years ending after September 30, 2025, and before October 1, 2026

Self-funded plans may use one of three methods to determine the average covered lives used for reporting and paying the PCORI fee: (i) the actual count method; (ii) the snapshot method; or (iii) the Form 5500 method. There are special counting rules that apply to employers offering multiple self-funded plans or an HRA integrated with a fully insured plan. The PCORI fee count and payment are submitted using the IRS Form 720.

Reminder! Form 5500s Due July 31 for Calendar Year Plans

Employee health and welfare plan administrators with at least 100 participants must file an Internal Revenue Service (IRS) Form 5500 each year by the last day of the seventh month after the end of the plan year, which means plan sponsors with calendar year plans must file annually by July 31.

Plan sponsors may file an extension, which delays the annual filing deadline for calendar year plans to October 15. For a list of Form 5500 frequently asked questions (FAQs) see our prior alert from July 2024.

Court Vacates ACA Section 1557 (again)

On June 2, 2026, the Department of Health and Human Services (HHS) published a Notice of Vacatur stating that a federal court has vacated certain provisions of the Affordable Care Act (ACA) Section 1557 regulations that prohibit discrimination on the basis of race, color, national origin, sex, age, or disability in health programs receiving federal financial assistance.

In May 2024, HHS issued Section 1557 final regulations interpreting sex discrimination to include discrimination based on gender identity; however, subsequent federal court actions significantly limited enforcement of those provisions. A preliminary injunction was followed by a final judgment vacating the portions of the rule that expanded Title IX’s definition of sex discrimination to encompass gender identity. HHS has since confirmed that these vacated provisions are legally void and will not be enforced, though all other aspects of the 2024 regulations remain in effect for covered entities. Accordingly, while HHS will not currently pursue enforcement related to the gender identity provisions, employers should remain mindful that other federal laws—such as Title VII, as interpreted by the U.S. Supreme Court—may still prohibit gender identity discrimination in certain contexts.

IRS ACA Certification Decision

In Supreme Linen Services, Inc. v. United States, a federal district court upheld the Internal Revenue Service’s (IRS’s) authority to assess an employer shared responsibility penalty under the Affordable Care Act (ACA) without prior certification from the Department of Health and Human Services (HHS) or an Exchange. The employer had argued the penalty was invalid because no such certification was issued, contending that only HHS has that authority. The IRS countered that its Letter 226‑J satisfied the certification requirement, and the court agreed, reasoning that administrative authority under the Internal Revenue Code generally rests with the IRS absent explicit delegation to another agency. As a result, the court ruled in favor of the government and denied the employer’s refund claim. This decision creates a split among federal trial courts on which agency has certification authority, signaling potential for further judicial review, while employers should continue compliance efforts as the issue evolves.

Federal Government Seeking Comments on PBM Reform

On June 18, 2026, the Centers for Medicare and Medicaid Services (CMS) published a Request for Information (RFI) in the Federal Register to solicit input on services and business practices of pharmacy benefit managers (PBMs) in light of recently passed legislation intended to be effective beginning in calendar year 2028.

Comments may be submitted electronically at Regulations.gov or by mail. Comments are due 30 days from publication in the Federal Register, which is July 18, 2026.

Massachusetts Minimum Creditable Coverage 2027 Updates

Massachusetts has released its 2027 minimum creditable coverage (MCC) standards under the state’s individual mandate, which requires residents to maintain qualifying health coverage or potentially face a tax penalty. For 2027, deductible limits remain unchanged, while out‑of‑pocket maximums increase in line with federal Affordable Care Act (ACA) thresholds. Employers are not required to offer MCC, but many plans are used by employees to satisfy the mandate, and plan sponsors (or their vendors) must ensure compliance with MCC standards and annual reporting requirements, including distribution of Form MA 1099‑HC to Massachusetts residents. Employers should work with insurers or TPAs to confirm MCC status, reporting responsibilities, and any necessary plan adjustments for 2027, while noting that penalties primarily apply to individuals who fail to maintain qualifying coverage.