Compliance Matters Newsletter | January 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.

• IRS Clarification on HSA Provisions in the OBBBA
• Form 1095-C Notice of Availability Posting
• Look-Back Measurement Period Refresher
• Employee Benefits Litigation Series: Court Allows ERISA and No Surprises Act Claims to Proceed
• 2026 State Regulation Series: California AB 260 Preserving Mifepristone Access & Reproductive Rights

Additional Updates & Resources

End of ACA Subsidies May Impact Employer Plan Enrollment

Since 2020, the federal government has expanded the amount of ACA premium tax credits available for Exchange enrollment. These expanded subsidies ended on December 31, 2025. The temporary funding bill that ended the most recent government shutdown did not include a solution for the end to ACA subsidies, and as of today, Congress has not passed legislation extending premium tax credits. The recently passed House bill did not contain provisions to extend ACA subsidies.

While the long-term impact on employer-sponsored plans due to the change in subsidies is unknown, we anticipate that some employees, particularly those with spouses and dependents who are receiving subsidies, may want to move back to the employer-sponsored plan. Please note that the reduction or elimination of a premium tax credit is not a qualified life event that allows mid-year enrollment into an employer plan. A significant change in cost to coverage is only a qualifying event when the increase is through an employer plan. Note that voluntarily choosing to non-renew an Exchange plan or cancellation for non-payment of premium are also not qualified life events that allow a midyear change to a cafeteria plan election.

Employers may allow changes to elections up until the start of the cafeteria plan year; however, once the plan year starts, the cafeteria plan rules require elections to be irrevocable outside of open enrollment and special midyear events. This means that for calendar year plans starting January 1, employers may only allow changes to elections for the 2026 plan until December 31. Any changes for the 2026 plan year starting after January 1 are allowed only with a qualified life event. Allowing exceptions to these rules could result in the IRS disqualifying the entire cafeteria plan, and a cafeteria plan violation could result in increased tax liability for the plan and its participants.

Johnson & Johnson ERISA Fiduciary Breach Suit Dismissed

On November 26, 2025, the United States District Court for the District of New Jersey dismissed a complaint alleging breach of fiduciary duties under the Employee Retirement Income Security Act (ERISA) against Johnson & Johnson (J&J) for the second time. Similar to the complaint dismissed earlier this year, the amended complaint was dismissed due to a lack of standing. In reaching its decision, the court found that the connection between what plan participants were required to pay and the fees the plans were required to pay the pharmaceutical benefit managers (PBMs) was weak, stating that J&J has discretion in setting participant contribution rates and that said rates can be influenced by multiple factors, not just those related to prescription drugs.

Because the court’s dismissal was without prejudice, the plaintiffs may file an amended complaint.

For more information on the J&J case, access our prior alerts from February 2024, February 2025, and April 2025.

Reminder | Part D Online Disclosure to CMS due March 1 for Calendar Year Plans

Annually, group health plans must disclose to the Centers for Medicare and Medicaid Services (CMS) whether the prescription drug coverage offered to Medicare Part D eligible individuals is creditable or non-creditable. This disclosure is due no later than 60 days after the start of the plan year, which is March 1, 2026, for calendar year plans beginning January 1, 2026. The disclosure form is fairly simple and must be completed online. CMS provides the disclosure form along with instructions and screenshots showing what information is required. This disclosure is in addition to the Medicare Part D Notice of Creditable/Non-Creditable Coverage provided to individuals. That notice is due annually before October 15. For more information, access our January 2025 Compliance Matters Alert.

Guidance for Electronic Submission of ACA Employer Reporting

The IRS has released Publication 5164 for the 2025 filing season, providing updated guidance for electronic submission of Forms 1094 and 1095 through the Affordable Care Act Information Returns (AIR) system. While the publication outlines technical standards and testing procedures, most employers will continue to rely on third-party vendors for electronic reporting due to the complexity of obtaining a Transmitter Control Code (TCC), meeting formatting specifications, and completing required testing. Employers should confirm they are prepared to electronically file or have a vendor solution in place ahead of the 2025 reporting deadlines.

CMS Final Rule | Hospital Pricing Transparency

The Center for Medicare & Medicaid Services’ (CMS’s) recent final rule aims to strengthen hospital price transparency requirements beginning in 2026. Hospitals must publicly disclose actual (rather than estimated) allowed amounts along with counts and National Provider Identifiers (NPIs) in machine-readable files (MRFs), backed by a formal accuracy attestation. While this could certainly increase price transparency, the required MRFs remain highly technical and difficult for the average consumer to interpret. As a result, employers and third-party tools will play a critical role in translating these data into usable insights for plan members. More accurate, transparent pricing data may give employer-sponsored group health plans stronger leverage in evaluating hospital contracting and benchmarking provider prices. Employers might also use the information to enhance benefit design strategies such as tiered networks, reference pricing, and steering toward lower-cost care settings. The fact sheet for the final rule can be found here.

IRS Releases Guidance on Trump Accounts

The Internal Revenue Service (IRS) recently released Notice 2025-68 announcing its intent to issue proposed regulations implementing Trump Accounts (TAs) – a new type of Individual Retirement Account (IRA) added under the One Big Beautiful Bill Act (OBBBA) that may be established for eligible minors. The notice provides some initial guidance on how these accounts will operate. Beginning July 4, 2026, employers may contribute up to $2,500 per year (indexed annually) per employee on a tax-favored basis via Trump Account Contribution Plans (TACPs). The notice also confirms that TACPs may be offered through cafeteria plan salary reductions, and that further rules coordinating TACPs with cafeteria plans will be addressed in upcoming proposed regulations.

Pharmaceutical Recovery Opportunities with EPIC Partner MCAG

In light of the increase in litigation against pharmaceutical manufacturers, EPIC has partnered with Managed Care Advisory Group (MCAG), an experienced class-action settlement recovery consulting company, to assist our clients in researching potential opportunities to join class action lawsuits against pharmaceutical drug manufacturers. These class actions commonly develop as a result of anti-competitive practices undertaken by the drug manufacturers. The intent is to recover funds for employer health plans that overpaid for drugs purchased on behalf of their employees due to artificially inflated and/or stabilized prices. There are typically several active lawsuits and/or class action settlements that fall into the category of “pharmaceutical benefit plan settlements” being litigated at any given time. While the number of these opportunities in any given year varies, there can be several ongoing at the same time.

MCAG researches potential class action opportunities for employers. Then, they help employers complete the necessary paperwork and serve as a class representative for what will ultimately become a class action settlement. Plan sponsors that act as class representatives can receive more money than from participating in a general settlement. But, there is also more work because in those cases, the plan would be to sue the defendants directly. MCAG takes on most of that work for the employer. For more information about available opportunities, reach out to your EPIC representative and schedule a call with MCAG.