May 2026: Employee Benefits Compliance Brief

An exclusive UBA Partner Firm monthly newsletter, focusing on one of your most important responsibilities — employer compliance.

Employer Priorities

A New Era of Health and Welfare Fiduciary Litigation

Employer-sponsored health plans — especially self-funded plans — are facing growing ERISA fiduciary scrutiny as healthcare transparency rules and rising medical costs drive more litigation. Recent lawsuits have focused on excessive administrative fees, PBM oversight, prescription drug pricing, and insufficient fiduciary governance. Employers should review vendor agreements, benchmark plan costs, strengthen documentation practices, and ensure fiduciary committees maintain clear oversight procedures.

CMS Revises Medicare Part D Creditable Coverage Rules for 2027

Beginning in 2027, CMS is tightening Medicare Part D creditable coverage standards for employer-sponsored prescription drug plans. Key updates include:

• The actuarial threshold for creditable coverage increases to 73%
• HDHPs may need plan design adjustments to remain creditable
• Employers should review prescription drug coverage with carriers, PBMs, and actuaries
• Medicare Part D notices must accurately reflect creditable coverage status

Proactive review of prescription drug plans now can help employers avoid compliance risks and participant confusion later.

IRS Releases 2027 Employer Shared Responsibility Payment Amounts

The IRS announced increased ACA employer shared responsibility penalties for 2027. The Section 4980H(a) penalty rises to $3,780 per full-time employee, while the Section 4980H(b) penalty increases to $5,670 per affected employee. Employers should review affordability calculations, employee classification procedures, ACA reporting processes, and vendor coordination to minimize penalty exposure.

Relational Advisors is a UBA Partner Firm.