Compliance Matters Newsletter | April 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.

• Deep Dive: Expanded ERISA Compensation Disclosure Requirements
• Break in Service Rules
• ERISA Plan Documents
• DOL Opinion Letters Clarify FMLA
• Litigation Series: Court Rejects ERISA Challenge to Tobacco Surcharge
• State Series: Washington State PFML Updates

Additional Updates & Resources

Reminder! RxDC Reporting Due June 1

Annual Prescription Drug Data Collection (RxDC) reporting is required by June 1 of each year. Reporting for the data from 2025 will be due June 1, 2026. The reporting consists of a plan file (P2), eight data files (D1 – D8), and accompanying narratives. Most employer-sponsored health plans rely heavily on their carriers, third-party administrators (TPAs), and pharmacy benefit managers (PBMs) to provide the data necessary, and in many cases, to submit the reporting to Centers for Medicare and Medicaid Services (CMS) on behalf of employer group health plans. To complete the reporting, the carrier or TPA may reach out to employers to ask for information about premium splits (employer and employee contributions) as well as other data required for the D1 file. Once this information is provided, the carrier, TPA and/or PBM may handle the entirety of a group health plan’s RxDC reporting, so employers should make sure to timely respond to such requests. If the employer fails to timely respond with the requested data, or if the carrier/TPA/PBM is unwilling to help with the D1 file, the employer may have to submit a P2 and D1 file on their own.

CMS released updated instructions for RxDC reporting in late February. The instructions don’t include any substantive changes. The latest instructions and templates can be found here.

For more information on RxDC reporting, access our Compliance Matters alert from March 2025.

ERISA Fiduciary Litigation Update

Recent Employee Retirement Income Security Act (ERISA) litigation developments continue to highlight the growing scrutiny on employer health plan fiduciary practices, particularly related to prescription drug pricing and pharmacy benefit manager (PBM) oversight.

In Navarro v. Wells Fargo, a federal court dismissed claims alleging the company breached fiduciary duties by allowing excessive prescription drug pricing in its health plan. The court found plaintiffs lacked Article III standing because they failed to demonstrate a concrete financial injury. Conversely, Stern v. JPMorgan Chase will move forward after a court allowed claims alleging fiduciaries failed to prudently monitor PBM arrangements and allowed participants to pay inflated prices for generic drugs.

These cases reinforce the importance for plan fiduciaries to maintain strong governance, actively monitor vendors, and document efforts to meet ERISA’s duties of prudence and loyalty.

All-Payer Claims Databases

Employers may be receiving letters from their third-party administrators (TPAs) requesting that employers sponsoring self-funded plans opt-in or out of the All-Payer Claims Database (APCD). This is not a federal requirement, but rather one that has been adopted by several states. Fully insured and non-Employee Retirement Income Security Act (ERISA) plans must report plan eligibility and claims information to the applicable state database which is then used to gain better information about healthcare costs, trends, etc. Self-funded plans are not required to participate due to ERISA preemption but can choose to participate. The major benefit of choosing to participate is that the employer is contributing to the effort to lower overall health care costs. Some potential negatives are the hassle of providing the information, especially if the TPA will charge additional fees for the administration, and privacy concerns both for individual participants as well as broader use of the shared data. For more information access our prior Alert from 2023.

Postmark Rule Clarification May Impact Plan Notices

On December 24, 2025, the United States Postal Service (“USPS”) finalized a rule adding Section 608.11, “Postmarks and Postal Possession,” which clarifies that the date on an official USPS postmark reflects the time when the mail piece is first processed by an automated USPS sorting facility, not when the mail piece was dropped off or received by the USPS. Because this update was issued as a clarification, not a new rule, this update could affect employer plan sponsors and benefits plans because certain notices, like the election notice for coverage under COBRA (the Consolidated Omnibus Budget Reconciliation Act) have specific timing and delivery requirements. Plan sponsors are encouraged to mail notices early to ensure timely receipt, and if possible, use electronic delivery methods in accordance with the Department of Labor (DOL) electronic delivery safe harbor rules.

CRS Report: Premium Tax Credits & Cost-Sharing Reductions

The Congressional Research Service’s (CRS) report on the Health Insurance Premium Tax Credit (PTC) and Cost-Sharing Reductions (CSRs) offers a thorough overview of how Affordable Care Act (ACA) subsidies operate, including eligibility criteria, calculation of credit amounts, enrollment requirements, and historical enrollment and spending data. The report is a useful reference for those seeking to understand federal subsidy mechanics and how recent law changes such as temporary expansions of PTC eligibility and amounts affect Marketplace coverage. With recent regulatory changes tightening enrollment and eligibility determination procedures and no further legislation yet passed to continue enhanced premium tax credits, premiums may increase and coverage instability could affect Marketplace enrollees. The CRS analysis helps frame these ongoing debates by grounding them in current law and data. Health Insurance Premium Tax Credit and Cost-Sharing Reductions | Congress.gov | Library of Congress

Proposed Rules for Trump Accounts

The Internal Revenue Service (IRS) recently released proposed regulations implementing “Trump Accounts,” a new tax-advantaged savings vehicle for children born under 2025 tax legislation. The proposed rules primarily address how accounts are opened, who may act as the responsible party, and how the government’s $1,000 pilot contribution for children born between 2025 and 2028 will be administered.

For employers, the underlying law allows employer contributions of up to $2,500 annually per employee, and earlier IRS guidance indicates employers may eventually allow salary-reduction contributions through a §125 cafeteria plan to fund a dependent child’s Trump Account. However, the newly proposed regulations largely reserve those employer-specific details for future guidance. Additional rules are expected addressing employer contribution programs, cafeteria plan coordination, and potential Employee Retirement Income Security Act (ERISA) implications.

San Francisco HCSO Annual Form Due April 30

Employers covered by the San Francisco Health Care Security Ordinance (HCSO) are required to report on their compliance with the law for calendar year 2025 by submitting the Employer Annual Reporting Form (ARF) by midnight on April 30, 2026. Employers who do not comply may be subject to penalties of $500 per quarter. The San Francisco Office of Labor Standards Enforcement (OLSE) released the reporting form that employers will use to report HCSO expenditures on March 30.