BENEFITS DIGEST

Fisher Phillips assembles an open-enrollment checklist that runs from eligibility and the ACA offer requirement through prospective section 125 elections, required disclosures, and enrollment access for employees on FMLA leave or COBRA. The guide collects the 2027 dollar limits announced so far, including HSA figures the article sources to Rev. Proc. 2026-24, and flags the figures still awaiting announcement. The guide’s process reminder is that plan terms, cafeteria-plan rules and enrollment communications have to agree, and that the carrier does not handle compliance by default.

A former employee sued Optum Financial and ConnectYourCare on October 14 over a $20 processing charge he says was added to one-time online COBRA premium payments and inadequately disclosed, paying $944.59 on one occasion where $924.59 was due and $120 extra across six payments. The theory is that the charge pushed payments past the premium ceiling COBRA permits, but the complaint pleads four state-law claims, California unfair-competition and consumer-remedies counts, unjust enrichment and Minnesota consumer fraud, and no ERISA count. The focus is one-time online payments and the disclosure of alternatives, not a claim that every payment method carried a fee. Nationwide and California classes are proposed, and the allegations are untested.

KFF’s updated tracker counts 11 carriers announcing full or partial exits from the ACA marketplaces for 2027 against six entering new states. Cigna is the headline departure, leaving the individual market in all 11 of its states after reporting more than 350,000 on-exchange members in the first quarter. KFF ties the retrenchment to the expiration of the enhanced premium tax credits at the end of 2025, which already cut sign-ups by more than a million between the 2025 and 2026 open enrollments, shrinking the market and likely worsening the risk pool as healthier enrollees drop first. Employers feel this indirectly but concretely. Fewer individual-market options can make employer-funded individual coverage less attractive, narrow the alternatives for departing employees weighing COBRA, and raise the stakes of the subsidy fight Congress has not resolved.

After the enhanced premium tax credits expired, net premium payments in the Affordable Care Act marketplaces rose 58 percent on average, and 114 percent for those staying in the same plan. Enrollment among people who paid their premiums fell from 21.8 million to 19.2 million, the first drop in seven years, and insurers are seeking a median 15 percent increase for 2027 while citing a deteriorating risk pool. CBO puts the combined uninsured increase from the reconciliation law and the credit expiry above 14 million by 2034. The increases matter for workers comparing COBRA with individual coverage and for part-time employees who aren’t eligible for employer coverage.

Dairy Farmers of America closed its St. Albans Creamery in Vermont, the Teamsters local took the closure to arbitration as anti-union retaliation, and the company announced it would stop paying its 85% share of health premiums for the 44 bargaining-unit members on October 1. Judge William Sessions III ordered the premiums continued until arbitration concludes, with an exception for anyone who lands coverage with a new employer. The judge found that lost health coverage is the kind of harm an arbitrator can't later repair, and courts can order an employer to preserve the status quo so that arbitration doesn't become a hollow formality. Employee declarations described a $15 copay becoming a $3,000-a-month prescription and family COBRA premiums near $2,500. The court declined to force an arbitration date, since the parties' chosen arbitrator isn't available until January, and noted a disputed internal memo proposing 'idling operations' aimed at 'Union Decertification,' which the company says is an AI-generated fake.

Federal oversight of the ACA marketplaces just escalated sharply. In late August, CMS canceled about 315,000 policies covering more than 760,000 people, roughly 4 percent of marketplace enrollment, after concluding the enrollments were unauthorized, and it plans to investigate 440,000 more. An interim final rule published September 23 then froze new agent and broker registrations for the federally facilitated marketplaces for the 2027 plan year, a moratorium expected to run to February 1, 2027. CMS expects to recover about $2.2 billion in advance premium tax credits, and enrollees who did not answer a 30-day verification request lost coverage, which Morgan Lewis notes has stakeholders asking whether legitimate enrollments were swept in. Employers are not directly regulated here, but a tightened individual market changes the fallback for COBRA-eligible workers, part-timers, and early retirees, with open enrollment starting November 1.

A divorce, a records deadline, and a two-year clock ended a former spouse's coverage fight. Mass General Brigham let certain former spouses keep after-tax coverage if the employee updated human resources records by a deadline. The employee did not, and the plan terminated her former husband's coverage. Judge Saylor dismissed the case. The plan's two-year deadline to sue began when it notified the employee that her former husband was no longer eligible. He also never used the plan's 180-day appeal process. The court rejected his four state-law claims, contract, fiduciary, good faith, and negligence, because each depended on interpreting the benefit plan and so was displaced by federal benefits law. If his ex-wife breached the divorce agreement by letting coverage lapse, the court said, that claim belongs in state court against her, not against the plan.

The comment period closed September 21 on the proposal to let group health plans deliver required notices electronically. As Hall Benefits Law explains, the optional safe harbor works by posting documents online and notifying participants where to find them, by email or through a web portal, mirroring what retirement plans have had since 2020, and anyone who prefers paper can opt out and receive paper copies. It would cover summary plan descriptions, summaries of benefits and coverage, COBRA notices, and HIPAA special-enrollment notices, among others. The website, which can be a mobile app, must keep documents up at least a year, be searchable, and let users print or save. One caution from [Marsh's alert](https://www.mercer.com/en-us/insights/us-health-news/dol-proposed-rule-would-ease-e-delivery-by-erisa-group-health-plans/) for sponsors planning ahead. A wrap document, a single document combining several benefit programs, may not fully qualify, because the safe harbor covers group health plan disclosures only.

Who will provide continued health coverage after a sale? Lowenstein Sandler's podcast explains why buyers and sellers should settle that question before signing. Generally, a selling-group plan keeps the federal COBRA obligation for the affected beneficiaries while the selling group maintains any group health plan, and those beneficiaries can include people whose qualifying event happened before the sale. If the selling group stops offering all group health coverage in connection with the sale, responsibility can shift to the buyer. Asset sales add a successor-employer test, and hiring the seller's employees alone isn't enough. The parties can assign responsibilities in the purchase agreement, but if that arrangement fails, the party responsible under the regulations still has to provide coverage. A sale doesn't restart an existing COBRA coverage period.

New Jersey now requires employers to report every employee separation to the state DOL through a new portal, under a 2023 mandate taking effect. Mostly an HR-operations item, with severance and COBRA administration touchpoints.

Employers who offer an on-site health clinic as an employee benefit may not realize it can qualify as an ERISA group health plan in its own right, which can trigger COBRA notice obligations most sponsors don't associate with an in-house clinic.

(COBRA) compliance often gets treated as a “set it and forget it” administrative task, particularly when employers outsource to third-party