BENEFITS DIGEST

The surprise-billing arbitration system worked as Congress designed it, SpecialtyCare’s October 23 complaint says, except for the last step, the insurer paying. The surgical-monitoring provider wants about $280,856 in federal dispute-resolution awards it says Anthem Health Plans of Kentucky never paid, and it pleads six alternative routes to collection spanning the No Surprises Act, arbitration law and ERISA, including theories that it stands in patients’ shoes because they signed their claims over to it and that Anthem acts as a fiduciary when it decides these claims. The complaint candidly acknowledges that some courts, including two federal appeals courts, have held providers have no private right to enforce the awards.

Joshua Hill surveys the growing fight over what happens when a health plan simply doesn’t pay a surprise-billing arbitration award. Federal appeals courts have held providers can’t sue to enforce the awards directly, while at least one district court has gone the other way, leaving regulators’ penalties, rather than individual collection suits, as the main enforcement path, with a separate open question about routes through general arbitration law. Whether a provider can collect an unpaid award in court remains unsettled, with the appeals courts and at least one district court divided, and new collection suits keep testing that uncertainty.

The Second Circuit held September 17 that the No Surprises Act doesn’t give providers a private right of action to enforce arbitration awards against plans, joining the Fifth Circuit and affirming dismissal of a provider’s collection suit. The court relied on the statute’s text and its scheme of agency and state enforcement, and found the Declaratory Judgment Act supplies no independent cause of action. Awards remain binding and payment obligations persist through other enforcement channels, and a footnote expressly leaves open how far the statute’s judicial-review bar reaches.

Calendar-year plan administrators have several notice deadlines approaching on December 2. Reinhart’s roundup identifies annual default-investment, automatic-enrollment and applicable safe-harbor notices, with requirements depending on the plan’s design. It also covers plan-amendment deadlines, PBGC reporting relief, preparation for the Saver’s Match and health-plan developments, including commentary on enforcement of surprise-billing arbitration awards.

Squire Patton Boggs explains the Second Circuit’s September 30 holding in [Diaz-Roa v. Hermes Law](https://digest.theinnerfirm.com/docs/diaz-roa-v-hermes-law-ca2-opinion-2026-09-30.pdf) that when an employee properly invokes the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, a pre-dispute arbitration agreement becomes unenforceable as to the entire lawsuit, not just the harassment claims. In the case itself the defendants did not contest proper invocation. The surviving non-harassment claim concerned stock options the employee alleged had been wrongfully taken. Severance, bonus, and equity disputes often travel in the same complaint as harassment allegations, and under this holding a properly invoked sexual-harassment claim takes those compensation claims out of arbitration along with everything else. The court left class actions and cases involving different plaintiffs for another day.

K&L Gates explains that California employers with five or more employees must extend bereavement leave to a designated person beginning January 1, 2027, with employees able to designate one person per 12-month period for the five-day leave. The roundup also covers revised restrictions on stay-or-pay agreements, the arrangements requiring workers to repay bonuses, training costs, or other amounts when they leave, with separate conditions and effective dates, plus AI, surveillance, and arbitration changes. Effective dates differ by statute, so compliance calendars should use each law’s own date rather than a single January 1 assumption.

SpecialtyCare and two physician groups sued Anthem Health Plans of Virginia and HealthKeepers on October 16 over federal surprise-billing arbitration awards for out-of-network intraoperative neuromonitoring, the tracking of a patient’s nerve function during surgery, that the insurers allegedly never paid. The providers allege that $2,501,372 remains unpaid, and the complaint pleads several alternative routes to enforcement under the No Surprises Act, the Federal Arbitration Act and ERISA, with the ERISA counts limited to awards involving self-funded plans. For plan sponsors, the case tests what happens when the surprise-billing arbitration system produces awards that go unpaid. Whether any of the enforcement theories holds up is now the court’s question.

October Three reviews three bills House Democrats introduced on October 1. The Employee and Retiree Access to Justice Act would replace deferential review of benefit denials with fresh judicial review and restrict arbitration. The Protecting Workers’ Benefits Act would let defined benefit participants sue on a plan’s behalf and receive a litigation incentive of 0.5% to 1.0% of the amount recovered. The Workers’ Retirement Savings Protection Act would broaden fiduciary investment advice, including rollover advice. October Three sees little near-term prospect of enactment, and the bills create no current duties.

Judge Gregory B. Williams grants summary judgment to Kraft Heinz in its suit to stop Teamsters Local 355 from arbitrating a grievance over a former Dover plant employee’s eligibility for the company retiree health plan. The collective bargaining agreement’s arbitration clause is broad, but its benefits section commits questions and disputes about benefit programs to the insurance policies and plan documents, and the plan documents supply their own procedures for eligibility disputes. That carve-out takes the grievance outside arbitration, and a permanent injunction will issue.

True North Medical of Suffolk and a fellow provider have appealed, in a case [docketed](https://www.courtlistener.com/docket/74971039/true-north-medical-of-suffolk-pc-v-aetna-inc/) in the Second Circuit on October 15, from Judge Kiyo Matsumoto’s September 16 ruling dismissing their bid to confirm No Surprises Act arbitration awards against Aetna for lack of federal jurisdiction. The district court held that the Federal Arbitration Act supplies no independent jurisdiction and found no implied right of judicial enforcement in the No Surprises Act itself, while expressly not deciding that Aetna owes nothing. The dispute concerns how providers can enforce unpaid No Surprises Act arbitration awards.

Your ERISA Watch surveys a busy week of benefits litigation, led by the Fifth Circuit’s affirmance of a judgment against a business owner who failed to transmit employee contributions and pay health claims. Other entries address releases, fiduciary duties, arbitration and benefit disputes. In the lead case, [Sonderling v. Sills](https://digest.theinnerfirm.com/docs/sonderling-v-sills-opinion-2026-10-06.pdf), the court upheld a $209,466.34 award and a permanent ban on serving as an ERISA fiduciary. The owner’s financial-distress and delegation arguments didn’t undo the record establishing his responsibility.

International Bancshares can’t preserve its plan’s arbitration requirement by cutting out restrictions on representative claims and available remedies. In an [October 9 order](https://digest.theinnerfirm.com/docs/parrott-ibc-severability-order-2026-10-09.pdf) following a Fifth Circuit remand, Judge David Ezra concluded that those restrictions were integral to the agreement under Texas law. Clauses allowing invalid provisions to be removed didn’t overcome the way the terms depended on one another. Removing them would require the court to rewrite the arbitrator’s authority. The decision addresses this agreement’s enforceability and leaves the underlying fiduciary claims unresolved.

Rep. Frank Pallone’s Lower Premiums, Faster Payments Act would replace federal surprise-billing arbitration with a payment standard tied to the qualifying payment amount, generally an inflation-adjusted median contracted rate. The proposal would apply to services furnished beginning January 1, 2028, and require payment within 30 days of receiving the bill. It would also revise how the qualifying payment amount is calculated, including treatment of expected bonuses and risk-sharing payments, and expand audits. The existing statutory roles for specified state laws and all-payer models wouldn’t simply disappear. Holland & Knight explains the proposed shift away from case-by-case arbitration; the bill text shows why the calculation of the payment benchmark would become even more consequential. This is a proposed overhaul, not a change employers should implement now.

Rep. Frank Pallone is proposing to replace federal surprise-billing arbitration with payments tied to a statutory benchmark. Healthcare Dive examines the proposal against complaints about the cost and volume of the existing dispute process and disagreement among healthcare stakeholders over how out-of-network care should be paid. Moving away from individual arbitration would make the payment benchmark—generally an inflation-adjusted median contracted rate—more consequential. The proposal remains legislation under discussion, not a payment rule plans can begin applying. Providers and plans would face different incentives under a fixed benchmark, which helps explain why reform is contested.

Air ambulance operator PHI Health filed at least six additional suits in early October seeking payment of surprise-billing arbitration awards, against Cigna Healthcare in the Western District of Virginia, Highmark West Virginia, CareFirst of Maryland, Presbyterian Health Plan in New Mexico, UMR in Kentucky and the outside administrator 90 Degree Benefits in Ohio. They join PHI’s pending suits against Anthem affiliates in Kentucky and Missouri and an Indiana case filed in September that named roughly 70 employer and union plans as defendants. The complaints follow a common template, seeking court enforcement of arbitration awards the payors allegedly ignored, and PHI alleges Anthem alone owes nearly $30 million on more than 1,200 awards nationwide. According to the Maryland complaint, the arbitrator ruled for PHI after CareFirst failed to submit an offer or pay its arbitration fees. PHI says $19,492.87 remains unpaid months after the award became binding. In the Kentucky and Indiana cases, PHI also names employer plan sponsors as defendants in their fiduciary capacity for keeping an administrator that allegedly failed to pay binding awards. These are allegations no court has tested. Any self-funded sponsor whose administrator handles surprise-billing disputes now has a reason to ask how many awards involving the plan remain unpaid.

Air ambulance operator PHI Health has sued Anthem’s Missouri Blue Cross affiliates, three employers and their health plans over nearly $298,000 in allegedly unpaid surprise-billing arbitration awards. The employers are Astec Industries, Essential Services and TKM Group. Filed October 7, the complaint follows a similar Kentucky suit filed the previous day. The suit again asks the court to order the awards paid, and again alleges the employer sponsors kept Anthem as administrator despite public warning signs, including the roughly $30 million in more than 1,200 awards PHI says Anthem owes it nationwide. Missouri adds state-law teeth the Kentucky complaint lacked, a vexatious refusal count and a prompt-pay count that accrues interest at 1 percent a month plus a daily penalty. The complaint also alleges Anthem cut its in-network rate offer to PHI by 39.6 percent on mileage and 15.3 percent on liftoff charges after the nonpayment campaign began, which PHI casts as economic pressure to accept below-market rates. These are allegations, and no court has ruled on them. But two suits in two days naming employer fiduciaries over an administrator’s unpaid awards looks less like a one-off and more like a litigation strategy.

Anthem’s Virginia plans sued AGS Health, the billing manager for a network of Schumacher emergency physician groups, alleging a scheme of falsely attesting that thousands of billing disputes were eligible for No Surprises Act arbitration, many of which Anthem says belonged under Virginia’s own balance billing law instead. Judge Robert S. Ballou dismissed all ten counts with prejudice. The court rejected Anthem’s attempt to challenge the awards through separate racketeering, benefits-law and state-law claims. Challenges had to fit the narrow grounds for overturning arbitration awards, and Anthem’s allegations did not meet that test. Anthem raised its eligibility objections during the arbitrations and the arbitrators rejected them, which defeated the fraud theory, and arbitrators empowered to decide eligibility do not exceed their powers by deciding it. The opinion joins a line of 2026 decisions reaching the same result against Anthem, Aetna and Blue Cross plans in California, Florida, Texas and Georgia.

Air ambulance operator PHI Health sued Anthem, dozens of employers and their health plans in Kentucky on October 6, seeking $2.6 million in unpaid balances on 116 No Surprises Act arbitration awards. Defendants include Walmart, Amazon, Toyota and the University of Kentucky. Beyond collecting the awards, PHI alleges that plan fiduciaries failed to respond to warning signs about Anthem’s payment practices. The complaint cites demand letters, other lawsuits and trade reporting that allegedly put them on notice, and says Anthem had accumulated more than a thousand unpaid awards approaching $30 million nationwide. PHI asks for corrective action that could include replacing Anthem as administrator, along with monetary relief. The court hasn’t ruled on those allegations.

Democrats on House Education and Workforce introduced a three-bill retirement package. The Workers’ Retirement Savings Protection Act from Ranking Member Bobby Scott would extend ERISA fiduciary status to one-time advice, including rollover recommendations, reviving concepts from the vacated Retirement Security Rule in statutory form. The Employee and Retiree Access to Justice Act from Rep. DeSaulnier and Sen. Smith would make forced arbitration clauses, class action waivers and representation waivers unenforceable whether signed before or after a dispute, and would ban discretionary clauses outside multiemployer plans so benefit denials get a fresh look in court. The Protecting Workers’ Benefits Act would treat litigation recoveries as plan assets, add a participant incentive award of 0.5 to 1 percent of any recovery, and require consolidation of duplicative suits. The bills lay out House Democrats’ priorities, though their prospects in the current Congress are uncertain.

A Texas federal court ruled that an arbitration agreement’s exception for benefits claims did not cover an employee’s claim that he was fired to interfere with his benefits. In the September 28 Hawkins v. Wells Fargo order, the court distinguished a challenge to the firing from a demand for benefits owed under the plan, and it noted the plaintiff couldn’t cite a single case reading a comparable carve-out his way. The benefits claim itself stays in federal court, while the retaliation and disability discrimination claims head to arbitration.

Patrick Hawkins sued Wells Fargo and its short-term disability plan over denied benefits, and separately claims he was fired for pursuing those benefits and for providing information to the Labor Department. Wells Fargo’s arbitration agreement covers employment claims broadly but carves out ‘claims for benefits under the Employee Retirement Income Security Act.’ In a September 28 opinion, Magistrate Judge Andrew Edison in Galveston read the carve-out narrowly. The claim seeking the unpaid disability benefits stays in court, and both sides agreed it should. The claim that Wells Fargo fired him for pursuing those benefits, brought under ERISA section 510, goes to arbitration along with his disability discrimination claims, because it attacks the termination rather than seeking benefits. The opinion collects decisions from other courts reading similar language the same way. Anyone who assumed an ERISA carve-out keeps every ERISA claim in court should reread their arbitration agreement with that distinction in mind.

When the No Surprises Act passed, regulators projected about 22,000 payment disputes a year. Providers initiated 2.6 million in 2025, and of the disputes that reached a decision, providers won 85%, at a median award more than four times the plan's median in-network rate. Research cited in a Georgetown University analysis puts costs attributable to the arbitration process at $22.4 billion from 2022 through 2025. The post explains the process, in which each side proposes a payment and the arbitrator must pick one number or the other, and the September letter in which 67 employer, consumer and patient groups asked Congress to replace arbitration with a predictable benchmark payment. Employers with self-funded plans should ask their claims administrator how many disputes involve their plan and what the awards are costing. Choosing in-network care can reduce exposure, but it doesn't eliminate surprise bills from out-of-network clinicians working at in-network hospitals.

Capital Group has asked the Supreme Court to review the Ninth Circuit’s July 30 decision refusing to send an ERISA fiduciary-breach suit against it to arbitration. Whether plan arbitration provisions can keep participants’ fiduciary-breach claims out of court is a question the courts of appeals have divided over for years. The Court requested a response to the petition on October 1, after the participant initially waived one; her response is due November 2. The justices haven’t decided whether to hear the case.

Ranking Member Bobby Scott is pushing a trio of bills he says belong in any future SECURE 3.0 package. The first would require that one-time retirement advice, including rollover recommendations, be given in the saver's best interest, and would stop advisers from avoiding fiduciary status through fine print saying their advice isn't the main basis for a decision. The second would expand participants' ability to sue over pension-plan mismanagement, responding to the Supreme Court's limits on standing in its 2020 Thole decision. The third, co-sponsored with Rep. Mark DeSaulnier and Sen. Tina Smith, would bar forced arbitration and class action waivers in ERISA plans and would outlaw the plan terms that give claim administrators deferential court review of their own benefit denials. The bills have been introduced but haven't become law. They map where Democrats want the statute to go.

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.

A retrospective on six July decisions: the Ninth Circuit's refusal to compel arbitration in the Capital Group 401(k) self-dealing suit, the largely denied dismissal motion in the O'Reilly Automotive tobacco-surcharge case, Elevance's forfeiture-suit dismissal with 40 days to amend, the standing-based dismissal of the ATI and State Street pension risk transfer suit, the Dish Network target-date-fund case ordered to trial, and the D.C. Circuit's partial reversal of a $13 million withdrawal-liability judgment won by the IAM National Pension Fund.

A surgery center that won a $71,888.85 arbitration award under the No Surprises Act and never got paid can't sue to collect it, Magistrate Judge Nathanael Cousins held, dismissing every claim without leave to amend. The court found no private right of action to enforce independent dispute resolution awards, agreeing with the Fifth Circuit's Guardian Flight decision and with the Second Circuit's September ECAPS ruling: enforcement belongs to the agencies through penalties, not to providers through lawsuits. The provider's fallback ERISA claims failed for lack of standing because the patient, fully insulated from the unpaid balance, suffered no injury the assignment could carry. State law claims could not fill the gap. The upshot of this ruling is specific: the provider holds an arbitration award the plan hasn't paid, and this court closed every route it offered for collecting it.

A collection fight over surprise-billing arbitration awards has arrived on employers' doorsteps. PHI Health, an air ambulance operator, [filed suit](https://digest.theinnerfirm.com/docs/phi-health-v-anthem-complaint-2026-09-15.pdf) in federal court in Indiana on September 15 to collect just over $4.3 million it says Anthem left unpaid on awards issued through the No Surprises Act's independent dispute resolution process. One claim targets the plan sponsors directly. PHI alleges they breached their duties by choosing and keeping Anthem and failing to monitor whether it paid the arbitration awards. That claim names the sponsors, not Anthem. The defendants include roughly 70 employer and union-affiliated plans and their sponsors, among them Eli Lilly, General Motors, Walmart, Kroger, State Farm, Indiana school corporations, and joint union-employer benefit funds. The complaint also claims plan benefits directly under ERISA using payment rights transferred by the patients PHI transported. PHI asks the court to enforce the awards under the No Surprises Act itself or, alternatively, under the Federal Arbitration Act on the theory that participating in the arbitration process creates an enforceable agreement. Whether those statutes allow this kind of collection suit is a disputed question. These are allegations at the filing stage, and no defendant has responded. Self-funded sponsors whose administrators handle these disputes now have a concrete reason to ask how the awards are being paid.

Changes to the federal surprise-billing arbitration process are [taking effect in stages](https://www.cms.gov/files/document/federal-idr-operations-implementation-timeline.pdf). The federal administrative fee fell from $115 to $15 per party for disputes initiated on or after June 11. New requirements for codes explaining claim payments and denials apply to services furnished beginning January 1, 2027. Other changes, including plan registration and moving negotiations into the federal portal, follow separate implementation schedules, and CMS is launching audits of the certified arbitration entities amid questions about arbitrator bias. Seyfarth's alert walks through the operational side for plan sponsors. On the legal side, Troutman Pepper Locke explains the Second Circuit's ruling that providers cannot sue under the No Surprises Act to collect unpaid arbitration awards, because Congress gave enforcement to the agencies. One Maryland district court has disagreed, and appeals raising the question are pending in other circuits, including the Ninth Circuit's SpecialtyCare v. Kaiser. Providers are also turning to state-law collection theories, which three district courts have already rejected. Ask your administrator which requirements are already in effect and whether its systems meet them.

After East Coast Advanced Plastic Surgery v. Cigna, No. 25-2204 (2d Cir. Sept. 17, 2026), the next front is providers pivoting to state-law claims, with one district court already staying hundreds of provider suits pending amended complaints, per Groom's Daniel Mulligan. His alert also traces the holding to a drafting tell. The statute lets a party ask a court to set aside an arbitration award but never provides for court enforcement of one. The volume behind the fight is striking. In 2025, 2.56 million disputes were initiated, roughly 115 times what the government projected. Kantor & Kantor's Peter Sessions fills in the fight itself, including Cigna's counterclaim that the practice's billing caused $8.5 million in overpayments.

Thursday's Second Circuit ruling limits providers' ability to sue under the No Surprises Act to collect arbitration awards. It doesn't cancel the awards or the obligation to pay them, and regulators can still enforce payment. Thompson Hine's alert says a plan with grounds to challenge an award should review its options with counsel, and counts self-insured plans as the named responding party in roughly 68 percent of last year's disputes. The firm also recommends asking claims administrators for plan-specific arbitration results and using them in cost forecasts. On the administrative side, [Segal reports](https://www.segalco.com/consulting-insights/idr-operations-update-a-new-gateway-and-guidance-on-codes/) that registration opened September 15 for the new federal dispute-resolution portal, expected to launch late this year, and that required payment-explanation codes apply to services provided on or after January 1, 2027. Plans that outsource this work should confirm their administrator is preparing for both changes. McDermott Will & Schulte's broader survey of NSA litigation and reporting developments is [here](https://www.jdsupra.com/legalnews/no-surprises-act-developments-in-7201130).

The employer coalition opened a new front in the No Surprises Act fight. The ERISA Industry Committee, whose board includes ExxonMobil, Lockheed Martin, PepsiCo and Walmart executives, released a report Thursday and briefed both chambers, arguing arbitration fees are landing on self-funded plans. One employer reports more than $6 million in dispute payments in the first half of the year, and Mercer projects employer coverage costs up 8.5 percent next year, the steepest climb in nearly a quarter century. ERIC wants awards anchored to the in-network benchmark rate, the approach the Fifth Circuit's August ruling (covered here September 11) held had let insurers keep rates artificially low, and the doctors' groups and their House allies call that a non-starter. Everyone agrees on the vehicle: the year-end spending bill.

The provider-side counterweight, built on [Georgetown's analysis of the 2025 dispute data](https://chir.georgetown.edu/the-no-surprises-act-idr-process-an-early-look-at-2025-data/) that both sides are citing. Providers won 88 percent of disputes in the first half of 2025, the highest rate recorded, and median awards ran at multiples of the in-network benchmark. DWT's tally by specialty tops out at roughly 32 times the benchmark for breast implant and reconstruction, the specialty of the provider who just lost the Second Circuit enforcement case above. The firm's advice to providers is direct. With the filing fee cut from $115 to $15 per party in June, and eligible claims from the same patient visit now allowed to be combined into one dispute, underpayments once too small to arbitrate may be worth pursuing. Their answer to the cost critique is that rising IDR spending reflects meritorious claims, not a broken system.

The rest of the opinion behind today's Second Thing. IAC argued in the alternative that the award had to fall because the Fund used inconsistent rates for withdrawal liability and minimum funding. On that point IAC lost: the opinion collects the decisions since the Supreme Court's Concrete Pipe case holding the two rates must be similar, though not necessarily identical. The court also read this year's M&K Employee Solutions decision as support rather than obstacle, noting the Supreme Court's warning about actuaries adopting intentionally low discount rates for withdrawal liability while using higher rates for other purposes. Judgment entered September 15; the recalculation goes back to the arbitrator.

The IDR machinery gets some plumbing: federal agencies released nine new remittance advice remark codes so payers can tell providers exactly why a claim is not surprise-billing material—a state law limits the reimbursement, the claim is ineligible for IDR, the service is not covered. The codes supplement the existing claim adjustment reason codes and become mandatory January 1, 2027. Small as it sounds, clearer remittance coding aims at the front end of the dispute pipeline, where miscommunication feeds the arbitration volumes the agencies have been trying to tame all year.

A litigation-side read of the August 11 en banc decision, sharpest on remedy and what happens next. The Fifth Circuit held the QPA methodology unlawful for counting ghost rates—contracted rates for services a provider never actually furnishes—and for excluding bonus and incentive payments from a benchmark the statute defines as the total maximum payment; the deflation was stark enough that providers were winning more than 80 percent of IDR arbitrations. Vacatur stood as the default APA remedy over the agencies' disruption objections, with enforcement discretion bridging the gap while QPAs are recalculated upward. Six judges dissented, and single-case air ambulance agreements stay out of the benchmark, the one issue the agencies won.

A Proskauer team unpacks the Fifth Circuit's August 11 en banc ruling on how insurers calculate the qualifying payment amount that anchors No Surprises Act arbitration. The court excluded ghost rates, contracted rates for services a provider never actually furnishes, required inclusion of bonus and incentive payments, and preserved the exclusion of single case agreements. The practical effect is higher QPAs in dispute resolution, a benchmark shift that lands on self funded plans just as arbitration volume keeps climbing.

HaloMD claims the No Surprises Act has cut out-of-network emergency spending by 13% to 52%, saving $1 billion to $4 billion a year. Independent researchers are skeptical. The study leans on assumptions rather than actual payment data, ignores the cost of running the arbitration system, and comes from a company that files about a quarter of all arbitration claims itself. Worth knowing before this number shows up in a policy fight.

This week's roundup, a short-handed edition with no case of the week, flags two decisions as most notable. In Central States v. McClain the Seventh Circuit held that Arkansas's latest pharmacy benefit manager regulation survives ERISA preemption, and in Liu v. Kaiser the Ninth Circuit extended the substantial compliance doctrine to benefit elections. The edition also collects the week's decisions on arbitration, attorneys' fees, fiduciary breach, disability claims, preemption, exhaustion, and pleading.

ERIC's read of the Georgetown research puts No Surprises Act arbitration costs at $22.4 billion over four years, with filings up 77 percent year over year and providers winning roughly 85 percent of disputes at awards well above median in-network rates. The employer lobby wants Congress to recalibrate the IDR process, arguing plans and workers ultimately absorb the pressure.

In Larkin v. Caremark Rx, No. 1:25-cv-07307 (S.D.N.Y.), participants allege the PBM wrongfully denied coverage for the GLP-1 drug Zepbound on medical-necessity grounds while steering them to Wegovy. According to early reports, the court has now declined to compel arbitration based on an arbitration provision in CVS's website terms of use, letting the ERISA coverage claims proceed. The order itself is not yet publicly posted, and the decision date is unconfirmed.

Eight federal appellate courts have now held that ERISA plan sponsors cannot use an arbitration clause to strip participants of plan-wide relief, with representative-capacity bars, remedy limits capping recovery at individual accounts, and class-action waivers each failing across ten circuit decisions. The carve-outs sponsors tried instead (exceptions for injunctive relief, savings clauses promising ERISA remedies, general severability language) have each been tested and rejected on appeal, and legacy waiver language drafted before this consensus formed is unlikely to survive a challenge. Nixon Peabody's ERISA litigation team identifies two structures no court has yet foreclosed (delegating arbitrability to the arbitrator and clauses that omit the restrictive language entirely) and advises sponsors to audit existing arbitration provisions now rather than wait for a challenge to test them.

In an unpublished memorandum, the Ninth Circuit affirmed an arbitration award holding that a multiemployer plan actuary's use of PBGC-published interest rate assumptions to calculate withdrawal liability violated ERISA's requirement that assumptions represent the actuary's best estimate of anticipated experience. The plan's 7 percent minimum funding rate applied instead. See The Second Thing above.

In Pover v. Capital Group Companies, the Ninth Circuit held a 401(k) plan's arbitration clause unenforceable under the effective vindication doctrine because it barred participants from pursuing representative claims and the plan-wide relief ERISA section 409(a) makes available. Mayer Brown advises sponsors to review existing arbitration language, preserve all arbitrability arguments at the district court, and weigh whether arbitration's benefits still outweigh its limits for plan-wide monetary disputes.

Though the plan document appeared to require arbitration in pursuing recovery in a fiduciary breach suit, a federal appellate court has affirmed a district court decision rebuffing that requirement.

F.4th —-, No. 24-5298, 2026 WL 2196257 (9th Cir. July 30, 2026), Plaintiff sued her former employer, The Capital Group Companies, Inc., and its fiduciaries on behalf of the company’s defined-contribution retirement plan.

Employee sued her former employer's retirement plan for fiduciary mismanagement; Ninth Circuit upheld denial of arbitration, finding the plan's class-action waiver unenforceable under ERISA's effective-vindication doctrine.

When an employee leaves Verizon before the company's matching contributions vest, the money left behind, called forfeitures, has to go somewhere. Verizon's 401(k) plan gave its benefits committee a choice: use forfeitures to reduce the matching contributions Verizon owed, or use them to pay plan expenses. Year after year the committee chose the first option, at least $21.9 million in 2019 and $31.8 million in 2020, while participants paid plan expenses from their own accounts. Judge Arun Subramanian's September 30 opinion holds that the annual choice was a fiduciary decision, not protected plan design, and that participants plausibly allege the committee put Verizon's interests first. The loyalty, prudence, and oversight claims proceed to discovery; the prohibited-transaction claims are dismissed for good: in the court's reasoning, this internal allocation of forfeitures isn't a transaction with any counterparty at all. The court counted more than 20 district court decisions coming out both ways on these questions, with no appeals court yet to rule. A case schedule, including class certification, is due October 14.

A federal judge declined to let a prostate cancer patient pursue a class action over BlueCross BlueShield of Tennessee's denials of proton beam therapy, which the insurer's medical policy treats as investigational for prostate cancer. The proposed class covered people in employer health plans governed by ERISA that BlueCross administers or insures, claiming the designation violated their plan terms and the insurer's fiduciary duties. The court did not decide whether the insurer was right to deny coverage. Judge McDonough found at least 74 people across eight states were denied under the same policy language, and whether that designation violated the plans is a question that can be answered once for everyone. He rejected the insurer's argument that its case-by-case review of unique clinical circumstances made each denial different, since that review happens only because the policy labels the treatment investigational in the first place. Certification still failed because each person's treatment costs and other claimed losses would require substantial individual review. The court left open the possibility of a narrower request.

Angela Stockbridge gets specific about the new correction program, which replaced its predecessor immediately on October 22. Her walkthrough covers the conditions for fixing eligible inadvertent failures, the correction window running to the later of the third plan-year end or 18 months after identification, and the need to document discovery and correction before an IRS examination begins. Employer-eligibility failures require stopping contributions within six months, overpayment relief carries exceptions including a $250 threshold and rollover notices, and she describes a 12-month window that applies to certain matching-contribution corrections. The separate IRA correction program opens May 1, 2027, and the earnings-floor idea tied to the Labor Department’s online calculator remains a proposal, not a current rule.

NAPA details the IRA side of the October 22 correction guidance. The new IRA program opens May 1, 2027 with corrections limited at launch to four categories. Three cover service-provider errors, a missed required minimum distribution, the wrong type of account opened, and a distribution or transfer that mishandles an inherited IRA for a nonspouse beneficiary. The fourth covers a 60-day rollover that missed its window where denying a waiver would offend equity or good conscience, including events beyond the individual’s reasonable control. Applications are filed through Pay.gov with a $3,500 fee for single filings before 2028. Rollover-deadline waivers transition out of individual IRS ruling requests, with both routes open during 2027, while the free automatic-waiver and self-certification routes stay available. Self-correction isn’t part of the IRA program at launch, and comments on both revenue procedures are due January 20, 2027.

Four months after discovery closed in Ford’s suit against Blue Cross Blue Shield of Michigan, the defendants asked to compel more discovery and take additional depositions. Magistrate Judge Elizabeth Stafford said no to all of it in an October 26 order, finding the requests untimely, unaccompanied by any motion to change the schedule, and out of proportion to what the case needs at this stage. The order limits further evidence gathering without deciding the underlying claims. The parties have 14 days to object, and the order governs unless a judge puts it on hold. Ford is among the employers in litigation with the administrator of a self-funded health plan, the same genre as the Aramark complaint against UnitedHealth affiliates, and the order shows courts holding both sides to the schedule for gathering evidence.

Morgan Lewis separates what changed immediately from what arrives later in the October 22 corrections guidance. The updated Employee Plans Compliance Resolution System, the IRS program for correcting retirement-plan errors, took effect on issuance, while the IRA correction program opens May 1, 2027 and runs on applications rather than self-correction. The firm also walks through the transition for 60-day rollover-waiver requests, which move out of requests for individual IRS rulings and into the new IRA program. Sponsors and IRA custodians get a map of which procedure now governs which mistake.

Mayer Brown examines the full Eleventh Circuit’s October 13 [decision](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) ending the requirement that participants complete a plan’s internal claims and appeals process, known as exhaustion, before bringing statutory ERISA claims in that circuit. Exhaustion for ordinary benefit claims stays put. The authors expect modest practical effect, since the defense in their experience delayed cases more often than it ended them, an assessment that is theirs. The court expressly left open whether a plan can impose exhaustion by contract for statutory claims, because the plan before it didn’t. Plan sponsors in the circuit lose a procedural defense and gain a drafting question.

In Collier v. Lincoln, a California federal court rejected the insurer’s argument that starting litigation permanently shields legal advice about administering a disability claim. When a claim returns to the insurer for another decision, some advice about that review may again fall within the fiduciary exception, which can give plan beneficiaries access to otherwise privileged communications. Separate protection for material prepared for litigation may still apply. The court required an expanded privilege log and confidential judicial review, not wholesale disclosure to the claimant. The amended log is due October 30 unless a specified appeal triggers a stay, and the order separately sets November 16 for submission of disputed documents to the judge. Roberts Disability Law has a [write-up](https://robertsdisability.com/does-an-erisa-remand-revive-the-fiduciary-exception-federal-court-orders-disability-insurer-to-log-attorney-communications-about-a-remanded-claim/) of the ruling.

A federal judge in Illinois allowed a family’s benefits and mental-health-parity claims against Blue Cross and Blue Shield of Illinois to proceed over approximately ten weeks of wilderness treatment. The family alleges it paid $48,000 after coverage was denied. Exceptions in the plan’s wilderness-treatment exclusion and conflicting provider definitions made a benefits claim plausible, and the court also found a plausible claim that the plan restricted mental-health treatment without a comparable restriction on medical care. The ruling permits the lawsuit to proceed. It does not order reimbursement or invalidate every wilderness-treatment exclusion.

A New Jersey federal judge sent a former Novartis executive’s severance suit back to state court after finding the company had not established that ERISA gave the federal court jurisdiction. Andrew Isaacs alleges that an improper misconduct termination cost him a package worth about $1.04 million. The court concluded he had not shown a sufficiently plausible claim to benefits under the plan Novartis supplied, citing its misconduct exclusion and his failure to allege use of its written application process, while Isaacs alleges he was told there was no process to challenge the termination. The ruling decides the forum, not whether he is owed severance.

A New York federal magistrate judge declined to reconsider an order refusing further amendments in a Walgreens employee’s benefits and employment lawsuit. The plaintiff did not identify overlooked authority, evidence, or a correctable omission sufficient to reopen the ruling. Her objections to the earlier order remain for the district judge, and the case continues on surviving claims. The decision does not newly resolve the merits of those claims.

Peter Sessions’s case-of-the-week treatment of [Bolton v. Inland Fresh Seafood](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) in his weekly roundup connects the full Eleventh Circuit’s decision that participants bringing statutory ERISA claims need not first complete the plan’s internal claims and appeals process back to the employee stock ownership transaction that started the case, a $92 million loan-funded purchase of the company’s stock. The same roundup summarizes a dozen other decisions across arbitration, fiduciary claims, discovery, benefits, and severance, including Kraft Heinz, Taylor, Watt, and Hannon. The Bolton ruling concerns statutory claims. The decision leaves the existing rules for benefit-denial claims unchanged, and the court left open whether plan terms demanding the internal process for statutory claims are enforceable.

Haynes Boone’s analysis of [Bolton](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) emphasizes what the overruling means for defense strategy, since fiduciary-breach and other statutory claims in the Eleventh Circuit no longer require completing the plan’s internal claims and appeals process before suing, while the existing rules for benefit-denial claims are unchanged. The firm recommends that sponsors review their claims-procedure language with counsel. Whether plan terms that purport to require exhaustion of statutory claims remain enforceable is a question the opinion itself expressly left open.

HR Dive examines whether leave provided as a disability accommodation must preserve an employee’s accrued paid time off, drawing on [Kingsolver v. U.S. Attorney General](https://digest.theinnerfirm.com/docs/kingsolver-v-us-attorney-general-ca11-opinion-2026-08-20.pdf), the Eleventh Circuit’s published August decision applying ADA standards under the Rehabilitation Act. The court held that flexible use of roughly 240 hours of accrued paid leave was itself a reasonable accommodation, that nothing about the employee’s disability required unpaid leave on top of it, and that an employee is entitled to a reasonable accommodation, not the accommodation of her choice. The practical checklist runs to written policies, past practice, and the interactive process. The holding is case-specific, not a universal rule that employers may always require PTO exhaustion.

Littler’s analysis of [Bolton v. Inland Fresh Seafood](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) emphasizes what the en banc Eleventh Circuit’s overruling of its exhaustion precedent removes, a procedural defense to statutory claims such as fiduciary-breach suits, while benefit-denial claims still go through the plan’s claims process. The firm keeps the open question open, since the court did not decide whether an express plan provision requiring exhaustion of statutory claims would hold.

The IRS republished its annual special per diem rates in this week’s Internal Revenue Bulletin. The high-low substantiation method uses $329 for high-cost localities and $230 for other localities within the continental United States, with separate transportation-industry and incidental-expenses-only rates and a revised high-cost locality list. The rates have applied since October 1 for employers that use this optional substantiation method, and the applicable rate turns on the travel location and seasonal period rather than the headline numbers. Employers using the method should check their reimbursement tables against the new rates and locality dates.

Seyfarth’s benefits blog reads the Retire Through Ownership Act as a long-sought answer to the valuation uncertainty that has dogged employee stock ownership plan transactions, with fiduciaries now expressly permitted to rely in good faith on an independent appraisal that follows the valuation principles of Revenue Ruling 59-60. The authors argue the change should reduce litigation pressure on good-faith reliance. The statute itself preserves ERISA’s fiduciary duties and the Labor Department’s rulemaking authority, so the reliance the firm describes still sits inside the duty of prudence rather than outside it.

WilmerHale’s treatment of [Bolton v. Inland Fresh Seafood](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) situates the full Eleventh Circuit’s overruling of its exhaustion precedent among the other circuits that already declined to require plan-level review before statutory ERISA suits. The firm keeps the two standing limits in view, since benefit claims still go through the plan’s process and the court left open whether an express plan provision requiring exhaustion of statutory claims would hold. The underlying valuation allegations about the company’s employee stock ownership plan remain just allegations on remand.

This preview collects the term’s employment and benefits questions, led by Anderson v. Intel on what a 401(k) plaintiff must plead about comparator benchmarks. It also covers the personal-staff exemption dispute in Younge and the Title IX employment question in Crowther. The benchmark question is the one with daily consequences for plan sponsors, since pleading standards decide which fee and performance suits survive long enough to cost money. (Editor’s note: The case comes from the Ninth Circuit, not the Eleventh, and was argued October 6.)

Three former HP employees filed a would-be class action in the Northern District of California on October 7 over two collective investment trusts holding about $2.53 billion, 23.3% of the $10.85 billion 401(k) plan. The [complaint](https://digest.theinnerfirm.com/docs/ohara-v-hp-complaint-2026-10-07.pdf) alleges the large-cap fund trailed its Russell 1000 benchmark in 9 of 11 calendar years from 2015 through 2025 and the small and mid-cap fund in eight, and estimates roughly $313 million in foregone returns for 2021 through 2025 against comparator averages, an illustration by the plaintiffs rather than money removed from accounts or an adjudicated loss. Both funds also sat inside all 12 of the plan’s default Birth Date funds. Separate counts invoke Cunningham v. Cornell to challenge recordkeeping, revenue-sharing and plan-administration payments, though Fidelity, SEI and Callan are not defendants, and the complaint itself says late contributions were corrected with lost earnings in 2024. Every figure above is the plaintiffs’ account.

Proskauer analyzes the full Eleventh Circuit’s [decision](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) in Bolton v. Inland Fresh Seafood, which overruled the circuit’s longstanding rule that participants must first use a plan’s internal claims and appeals process before suing on statutory ERISA claims such as fiduciary breach, in litigation over an ESOP’s alleged $92 million purchase. The firm keeps two limits in view. The ruling leaves the existing exhaustion rules for claims seeking plan benefits unchanged, and the court left open whether a plan provision expressly requiring exhaustion of statutory claims would be enforced. Predictions about Supreme Court review are the firm’s, not anything the opinion holds.

Gibson Dunn concentrates on what the full Eleventh Circuit’s [ruling](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) in Bolton v. Inland Fresh Seafood changes for fiduciary-breach litigation now that statutory ERISA claims in that circuit no longer wait for plan-level review, with the case back before the panel. The firm sketches plan-design responses, including express exhaustion provisions, while acknowledging the court did not decide whether such a clause would hold. Benefit claims under plan terms are unaffected, and the suggestions are the firm’s practice advice rather than anything the opinion establishes.

Proskauer examines the defense employers lost when the Eleventh Circuit decided Bolton. Participants bringing statutory ERISA claims no longer have to complete a plan’s internal claims process merely because circuit precedent required it. The [full-court opinion](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) overrules that precedent while preserving the distinction between statutory claims and claims for benefits due under plan terms. Whether a plan can impose an enforceable contractual exhaustion requirement remains unresolved. Fiduciaries therefore need to evaluate the claim itself before relying on an unfinished administrative appeal.

The Eleventh Circuit’s decision in Bolton removes a court-imposed exhaustion requirement for statutory ERISA claims, including fiduciary-breach suits. PLANSPONSOR explores what that means for employers and litigants through practitioner interviews. The [full-court opinion](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) distinguishes those claims from suits seeking benefits under a plan, where exhaustion remains relevant. It also leaves open the effect of an exhaustion requirement written into a plan. The ruling changes the route into court, without deciding whether the underlying fiduciary allegations will succeed.

Roberts Disability Law explains why the Eleventh Circuit abandoned its longstanding requirement that claimants exhaust internal remedies before bringing statutory ERISA claims. The court concluded that the statute doesn’t impose that prerequisite on claims such as breach of fiduciary duty. The [Bolton opinion](https://digest.theinnerfirm.com/docs/bolton-v-inland-fresh-seafood-opinion-2026-10-13.pdf) leaves benefits claims on a different track and doesn’t resolve whether plan language can create a contractual exhaustion obligation. For participants asserting wrongdoing beyond a benefits denial, the distinction can determine when litigation may begin.

A severance release didn’t end James Muldoon’s challenge to Penn State Health’s retirement plans. The court dismissed his individual claims but allowed claims brought on the plans’ behalf to proceed. Hall Benefits Law discusses allegations involving investment selection, recordkeeping charges and the use of employer contributions that departing employees hadn’t earned the right to keep to reduce the employer’s own payments. The [September 2 opinion](https://digest.theinnerfirm.com/docs/muldoon-v-penn-state-health-memorandum-2026-09-02.pdf) treats those allegations as sufficient to continue litigation, without finding that the fiduciaries actually breached their duties.

A disability claimant’s separate fiduciary-breach claim can justify discovery beyond the material used to decide benefits. Roberts Disability Law discusses Gibson, where the claimant alleged that Unum misrepresented a conversation with a treating physician. The Minnesota court’s [October 5 order](https://digest.theinnerfirm.com/docs/gibson-v-unum-order-2026-10-05.pdf) allowed discovery tied to that separately pleaded claim, subject to ordinary relevance and proportionality limits. It didn’t broadly reopen the benefits claim’s administrative record or decide that the alleged misrepresentation occurred.

Former Twitter employees suing over allegedly unpaid severance benefits have reached a settlement in principle with X and Elon Musk. Their [amended complaint](https://sanfordheisler.com/wp-content/uploads/2026/02/015-Amended-Complaint.pdf) alleges that the company failed to honor its severance plan after the takeover and misled employees about their benefits. Those are disputed allegations, not court findings. The [October 9 status report](https://digest.theinnerfirm.com/docs/ye-musk-settlement-status-report-2026-10-09.pdf) says the parties are negotiating a written agreement and discloses no settlement amount. The [court’s order](https://digest.theinnerfirm.com/docs/ye-musk-ecf60-docket-excerpt-2026-10-09.pdf) requires a dismissal or status report by January 15, 2027, and cancels the October 22 conference while maintaining other dates except as modified. No settlement has been approved.

Participants bringing statutory ERISA claims in the Eleventh Circuit no longer face the court-created requirement to complete a plan’s administrative claims process first. The full Eleventh Circuit’s Bolton decision overrules that part of its longstanding precedent in a dispute over an employee stock ownership plan’s allegedly overpriced stock purchase. The court found no statutory basis for requiring exhaustion of fiduciary-breach claims. It preserved the existing exhaustion rule for ordinary benefit claims and left mandatory contractual exhaustion provisions unresolved because the plan before it made the process optional. The decision returns the litigation for further proceedings; it doesn’t establish that the stock transaction was unlawful.

The full Eleventh Circuit’s decision in Bolton removes the circuit’s judge-made exhaustion requirement for statutory ERISA claims. Seyfarth focuses on the resulting need to review plan language and litigation strategy. The distinction matters because the court found this ESOP’s administrative process optional and expressly left open whether a plan could require exhaustion by contract. It also left the existing rule for ordinary benefit-denial claims alone. The decision reverses the dismissal and sends the case back for further proceedings; it doesn’t decide whether the challenged stock purchase breached a fiduciary duty. Sponsors reviewing mandatory language should treat its enforceability as an unresolved question, not as a replacement defense the court has already blessed.

Falcon Rappaport & Berkman examines what the Eleventh Circuit’s Bolton decision means for sponsors facing fiduciary-breach litigation. Participants no longer have to complete a plan’s administrative process solely because the circuit previously imposed that requirement on statutory ERISA claims. The firm recommends reviewing claims provisions, governance and litigation preparedness. The opinion itself leaves open whether mandatory plan language could create an enforceable contractual requirement and preserves the existing treatment of ordinary benefit claims. Reviewing the document is sensible preparation, but the court hasn’t approved a wording change that restores the defense it rejected.

Three former employees sued HP and its plan committee on October 7 in San Jose federal court over two custom funds in the company’s $10.85 billion 401(k) plan, the U.S. Large Cap Equity Fund and the U.S. Small/Mid Cap Equity Fund. The complaint alleges the large-cap fund trailed the Russell 1000 index in nine of the eleven calendar years from 2015 through 2025 and the small/mid-cap fund trailed the Russell 2500 in eight of eleven, underperformance it says was visible on the funds’ own fact sheets and the Fidelity screens shown to participants. The two funds held about 23 percent of plan assets and sit inside all twelve of the plan’s Birth Date Funds, the investments used for participants who don’t make their own selections. The complaint therefore also seeks compensation for losses suffered by participants who never selected either fund directly, and it estimates plan losses above $300 million. The suit brings distinct prohibited transaction claims as well, over the plan’s recordkeeping and revenue-sharing payments to Fidelity, its payments to HP itself for administrative services, and employee contributions deposited late in seven straight years, delays the plan’s own filings classify as nonexempt prohibited transactions. The plaintiffs argue that their chosen comparisons meet the standard the Supreme Court is considering in the Intel case.

December 31, 2026 is the deadline for most calendar-year retirement plans to document, in a formal amendment, the CARES, SECURE and SECURE 2.0 changes they’ve been operating under, from Roth catch-ups for high earners and long-term part-time eligibility through super catch-ups, higher RMD ages and the optional early-withdrawal provisions. Informal IRS guidance from September 16 suggests some SECURE 2.0 amendment deadlines may slip, but the firm still recommends documenting everything implemented as part of this year-end. The discretionary review is where the litigation lessons show up. The firm suggests forfeiture language that makes the allocation choice a plan-design decision rather than a fiduciary one, claims procedures with limitations and venue provisions, a look at arbitration language, and beneficiary procedures that answer what happens after a divorce or when a beneficiary dies before being paid.

NAPA's Nevin Adams walks through the Marsh & McLennan voluntary benefits complaint as the third in Capozzi Adler's series, after USI and Arthur J. Gallagher, and lays out the arrangement the three complaints allege: the employer sits on both sides of the transaction as plan sponsor and broker, specifies its own commission and administration fee structure, and the carrier builds that compensation into the premiums participants pay, so that when the broker demands more, participants pay more. The piece also traces the two safe harbor prongs the suits attack, endorsement through company-branded benefits handbooks and the nearly $7 million in consideration Marsh allegedly retained. The allegations haven't been tested, and any employer whose affiliates earn revenue from its own benefit plans will want to understand the theory.

The IRS is clearing out old guidance. Notice 2026-58 declares 71 revenue rulings, revenue procedures, notices, and announcements obsolete under the administration's deregulatory executive orders, the third round in the effort after earlier notices covering 9 and 83 documents. Nothing here repeals a current benefit protection. The listed items are expired or superseded, including Notice 96-8, the 1996 guidance on calculating lump sum distributions from cash balance plans, which Congress superseded in the Pension Protection Act of 2006, and financial-crisis-era funding relief for multiemployer pension plans whose election windows closed years ago. Sponsors with plan documents or procedures that still cite any listed item should confirm what replaced it.

Without changes in law, the Congressional Budget Office projects that Social Security's retirement trust fund will run out in mid-2032, leaving incoming revenue insufficient to pay scheduled benefits in full. The [updated projections](https://www.cbo.gov/publication/62556), released September 17, put the cut at that point at 26 percent, deeper than the 22 percent in the trustees' June report, and widening to 40 percent by the end of the century. Against today's average retired-worker benefit of $2,087.52 a month, a 26 percent cut is about $543 a month, more than $6,500 a year. Even the standard fallback, merging the retirement fund with the healthier disability fund, buys one year and still leaves a projected 23 percent cut. For plan sponsors this is an education problem before it is a policy one. Workers modeling retirement income on full scheduled benefits are counting on payments current law cannot fully fund past 2032, which makes the workplace plan's income projections, and the assumptions behind them, worth a check.

The IRS's August rollover guidance is optional today and a signal for tomorrow. Notice 2026-49, issued August 12, offers plans a five-step process and four sample forms for direct rollovers between plans and IRAs, as SECURE 2.0 required. Foley reads the signals in the fine print: future guidance may disallow paper checks, bar demands for Medallion signature guarantees, a bank's stamp vouching for a signature, that stall rollovers today, and let receiving plans "reasonably conclude" a sending plan is qualified, a lighter standard than the 2014 revenue ruling it would relax. Comments are due October 23.

The Retire Through Ownership Act has passed Congress and awaits the President's signature. It would give employee stock ownership plan fiduciaries a safe harbor for relying in good faith on independent appraisals that follow Revenue Ruling 59-60. Groom explains that those principles recognize a range of fair market values rather than a single exact figure, and that trustees needn't be valuation experts to rely on qualified appraisers. The safe harbor would apply to determinations made after enactment. Groom expects several years to pass before courts hear lawsuits over transactions covered by it.

The mechanics behind the First Thing, from the bill text. The new ERISA §3(18)(B) would let an ESOP fiduciary rely in good faith on a fair-market-value determination by an independent valuation expert or business appraiser who “relied upon the principles and methodologies set forth in Internal Revenue Service Revenue Ruling 59-60,” as the IRS amplifies and modifies it over time (weighted earnings, assets, and comparable-company analysis). Two caveats matter for counsel. The bill expressly leaves ERISA §404's prudence duties untouched, so the safe harbor would protect the price standard, not a sloppy process. And the Labor Department could still issue regulations. It would apply to valuations made on or after enactment.

The number behind every future fight over the tax break for employer-provided health coverage. CBO and the Joint Committee on Taxation now put the federal subsidy for employment-based coverage at $6.6 trillion over the next decade. The 2026 figure alone is $471 billion, about 25 percent higher than projected in 2023, driven by higher service costs, higher utilization, and higher enrollment. Hall's point for sponsors is that numbers this size invite exclusion caps whenever Congress needs revenue, so the tax treatment employers take for granted is a policy choice with a growing price tag.

The transition relief on the federal tax treatment of state PFML programs runs out after 2026, and this walkthrough focuses on the payroll consequences. Under Revenue Ruling 2025-4, as extended by Notice 2026-6, medical leave benefits funded by employer contributions are treated as wages for federal employment tax purposes, which brings withholding, employment tax, and reporting obligations that family leave benefits do not carry. Washington and Massachusetts have already restructured their programs to point employer money at family leave and employee money at medical leave. The action items are unglamorous and datable. Review how each state program is funded, and confirm the payroll vendor can capture what 2027 reporting will require.

Saul Ewing's monthly roundup runs procedural this time, and usefully so. A California court kept a long COVID disability case in the plaintiff's chosen district even though she lived, and most of her doctors practiced, in another one, deference that carries extra weight in ERISA cases. A Florida plaintiff won leave to dismiss and refile elsewhere after seventeen months of litigation, on condition she pay the insurer's costs. A Minnesota court refused to let defendants swap in a new rationale for a denial once litigation began. An Illinois court rejected a claimant's oral testimony that he mailed a timely appeal, drawing a negative inference from his failure to produce the letters themselves. And a South Carolina court held an eighteen day review was enough where the denial turned on eligibility rather than disability.

Proposed regulations in this morning's Federal Register would write into the regulations what Revenue Ruling 71-447 and the case law behind it established decades ago, that a racially discriminatory private school is not tax exempt. Two things are new. The rule reaches every private school from kindergarten through universities and trade schools, and it treats race-based criteria as discrimination for any purpose, sweeping in diversity-motivated scholarships, donor-restricted funds, and other school-supported programs. Religious admissions criteria survive if they are genuinely religious rather than proxies for ancestry or ethnicity. If finalized, the rule applies to taxable years beginning after May 31, 2027, and comments are due 60 days after publication.

Two district courts issued ERISA venue rulings within a day of each other, and both moved the case out of the plaintiff's chosen forum. In one, a 401(k) fiduciary-breach class action filed in the Southern District of California was transferred to Nebraska under section 1404(a), where the plan is administered and its fiduciaries sit. Useful reading for anyone choosing where to file an ERISA case, or trying to move one.

New proposed regulations make it easier for dependent care flexible spending accounts (“DCFSAs”) to pass applicable nondiscrimination rules under the Internal Revenue Code and, in particular, the “average benefits test.”

On remand from the Eighth Circuit, a Minnesota federal judge again dismissed the proposed class action claiming Wells Fargo used about $2.2 million in 401(k) forfeitures to reduce its own matching contributions rather than pay plan expenses, this time without prejudice. The ruling turns on standing rather than the merits, so whether the forfeiture-offset practice itself is permissible remains an open question.

The Treasury Department recently issued proposed regulations providing long-awaited guidance on employer contributions to Trump Accounts under Internal Revenue Code Section 128.

Dependent Care Assistance Programs are subject to the nondiscrimination rules that are set forth in Internal Revenue Code Section 129 (Section 129).

A Pennsylvania federal court dismissed a class action challenging ATI's $1.5 billion pension risk transfer to Athene, holding under Thole that retirees whose monthly benefits remain unchanged lack standing, and that the alleged risk of future harm was too speculative. The decision deepens the district-court split over Athene-related de-risking suits, with standing rejected in Schoen, Camire, and Bueno but sustained in Konya and Doherty, both now on interlocutory appeal to the Fourth and Second Circuits. Nixon Peabody's ERISA litigation team advises sponsors to document annuity-provider selection under the DOL's six-factor guidance before closing, since no court has yet reached the fiduciary merits on a developed record.

In Stempel v. Unum Life Insurance Company of America, No. 24 C 6077, 2026 WL 2241244 (N.D. Ill. Aug. 4, 2026), the court dismissed an ERISA disability suit for failure to exhaust administrative remedies after the claimant could not establish that he actually mailed his appeal.

Rev. Proc. 2026-30 updates the application procedures in Rev. Proc. 2026-4 to streamline requests for letter rulings.

Like several other pro-employer pension risk transfer rulings, the judge said the plaintiffs lack standing to sue as they continued to receive promised benefits.

To avoid politics and focus solely on the numbers, we will refer to Trump accounts as “530A accounts,” so named by the section of the Internal Revenue Code enacted under the One Big Beautiful Bill Act (OBBBA) on July 4, 2025.

Revenue Procedure 2026-26 provides the 2027 indexing adjustments for the ACA premium tax credit applicable percentage table and sets the required contribution percentage at 10.22 percent, up from 9.96 percent for 2026. That figure drives the employer affordability safe harbors, so sponsors should have it in hand before setting 2027 employee contributions.

The Internal Revenue Service (“IRS”) released Notice 2026-36 (Notice of Intent to Issue Regulations under Section 4960), (the “Notice”) relating to the tax on executive compensation under Internal Revenue Code (“Code”) Section 4960, as modified by the One Big Beautiful Bill Act (the “OBBBA”)

Section 409A of the Internal Revenue Code (Section 409A) imposes strict rules governing the timing of deferred compensation payments, such as when and under what circumstances such payments can be made.

The United States District Court for the District of New Jersey, per U.S. District Judge Esther Salas, granted the defendants’ motions to dismiss a pro se ERISA claimant’s short-term disability suit and to compel arbitration of his retaliation claim.

The U.S. Department of Labor (the “DOL”) recently issued Technical Release 2026-02, providing guidance on whether certain Trump accounts established under Section 530A of the Internal Revenue Code and the One, Big, Beautiful Bill Act (“Trump Accounts”) and employer contribution programs to such accounts constitute employee benefit plans subject to ERISA.

The court denied Defendant Metropolitan Life Insurance Company’s motion.

Trump Accounts, a new tax-advantaged individual retirement account (IRA) intended for the benefit of minor children, were established under Internal Revenue Code (Code) Section 530A as part of the

Transfer-tax safe harbor for individual donors who contribute to Trump accounts under IRC §530A. If specified conditions are met, contributions are treated as completed gifts that are not future

Goodyear asked the court to reconsider the October ruling that let a statutory nicotine-surcharge claim proceed, and on October 23 the court said no. The decision explains that the out-of-circuit authority Goodyear relied on is nonbinding and distinguishable, and that a party can’t introduce a new argument for the first time on reconsideration. The case proceeds, but the court hasn’t decided liability.

After a crew member was lost at sea, the insurer eventually paid $200,000 in accidental-death benefits, and the fight that remained was over prejudgment interest and fees. The Sixth Circuit’s October 21 unpublished decision affirms their denial. The policy gave the insurer discretion to require satisfactory proof of loss, including formal death documentation, and the court separated review of that proof decision from the equitable discretion governing interest. It’s a case-specific ruling about proof of loss, not a general shield for slow investigations.

The Fourth Circuit on October 16 affirmed judgments under Title VII and Maryland law for a Catholic Relief Services data analyst whose husband was denied the spousal health coverage other employees’ spouses received. The majority held that a religious motivation did not displace the prohibition on sex discrimination for an employee in a nonministerial role, and that the Religious Freedom Restoration Act, the federal religious-liberty statute, supplied no defense in a suit between private parties. The parties had stipulated to $60,000 in damages if liability stood on any claim, so the court dismissed the separate Equal Pay Act appeal as moot rather than deciding it. A long dissent would have given the religious employer far broader protection, and the decision does not disturb the ministerial exception, which CRS did not press for this employee.

Judge David O. Carter certified three classes of Sodexo health plan participants who paid the plan's nicotine surcharge: two damages classes on whether the surcharge program violated ERISA's requirements and the plan's own terms, and a fiduciary-duty class certified because individual suits would risk inconsistent rulings. Certification follows a published Ninth Circuit decision last year holding that Platt never agreed to arbitrate his claims and that the arbitration agreement's class-action waiver couldn't block claims brought on the plan's behalf. Employers that charge tobacco users higher premiums now face the compliance questions at class scale: did the program offer a qualifying alternative way to avoid the surcharge, tell employees about it, and refund what shouldn't have been charged?

Fraud victims holding a $364 million restitution award against an IIG founder asked the courts to liquidate his IRA and insurance assets, which had grown from $3.5 million to $5.1 million. In In re IIG, the Second Circuit refused. The criminal judgment set a payment schedule ($40,000 down, then 10 percent of monthly income), and that schedule limited what the victims could collect while the defendant stayed current on it. The law that lets restitution reach retirement assets despite ERISA's usual protections defines what property can be reached, the court held, not when. The victims' remedy is asking the sentencing court to change the schedule.

A California bill on the Governor's desk, AB 1609, would give health care customers a right to a human being. Businesses with more than $500 million in annual revenue serving California customers, including health plans, payers, managed care organizations, and PBMs, would have to disclose when a chatbot isn't a person, connect a customer who asks about a refill, a transfer, a denied claim, a prior authorization, or a specialist referral to a live agent within 15 minutes or offer an appointment within one business day, and cap cumulative phone holds at an hour. The bill asks for a good-faith effort, not a stopwatch guarantee. Licensed hospitals won a broad carve-out; plans and PBMs didn't. Penalties reach $10,000 per violation, effective January 1, 2027 if signed. Sponsors with California populations should ask vendors now how member-service AI would meet the clock.

Internal Revenue Code Section 409(p) (Section 409(p)) imposes significant obligations on S corporation Employee Stock Ownership Plans (ESOPs) with severe penalties for noncompliance.

In Supreme Linen Services, Inc. v. U.S., 2026 WL 1220078 (S.D. Fla. 2026), an employer sued the federal government after the Internal Revenue Service (IRS) assessed an employer shared responsibility penalty against the company.

Chief Judge Denise Casper dismissed the class action over BDO USA’s August 2023 employee stock ownership plan (ESOP) transaction, in which the ESOP bought 42% of the firm’s stock at roughly $100 per share for $1,242,025,992. Taylor argued that BDO’s 11.36% outside borrowing reduced participants’ share allocations. The court found that allocations instead depended on the ESOP’s separate loan, which carried a 3.96% rate. It also found that Taylor had not plausibly alleged overpayment or a valuation process compromised by misleading information. Without a plausibly alleged injury, he lacked standing to sue. The court agreed that an independent trustee “is not a whitewash,” distinguishing the cases Taylor relied on, and because this was the second failed complaint the dismissal is with prejudice. It is a standing ruling, not a merits endorsement of the valuation.

The order list issued Monday, October 5, on the opening day of the term, denied review in four cases benefits lawyers were watching. Zavislak v. Netflix leaves standing a Ninth Circuit ruling that the service contracts between Netflix’s health plan and its administrators aren’t plan documents a participant can demand under ERISA’s disclosure rules. McLean v. Delta Air Lines ends former pilots’ effort to revive a suit claiming Delta pushed them out over military leave, leaving the Eleventh Circuit’s dismissal in place. Gasper v. EIDP closes a retiree’s challenge to a reduction of his monthly annuity, with Justice Alito recused. And in United Airlines v. Kincannon, the Court declined to review the class certification United challenged in a suit by employees placed on unpaid leave after receiving religious exemptions from its COVID-19 vaccine policy, over a noted vote by Justice Kavanaugh to grant review. The case traveled below as Sambrano v. United Airlines, where the panel affirmed certification of a 2,221-member class over a partial concurrence by Judge Willett questioning whether religious sincerity can ever be a common question. A denial isn’t a ruling on the merits. It leaves each lower court decision in place without endorsing its reasoning.

Judge Cogan denied the hospital system’s motion to dismiss in its entirety. Three self-funded union welfare funds allege that NewYork-Presbyterian’s contracts with insurers violate the Sherman Act and New York’s Donnelly Act through three kinds of terms. An insurer that wants any NYP hospital in a network must allegedly take every NYP facility at the highest coverage tier, a single negotiated rate applies flagship-hospital pricing at every location, and gag clauses block price disclosure. The court found the funds could bring the claims because they bear the hospital costs themselves; the plans, not their network vendors, are the direct purchasers with standing to sue over the contracting that sets the prices they pay. The proposed class reaches everyone who purchased in-network inpatient general acute care from the system over four years, and the case now heads into discovery.

No case of the week this week; as the editors put it, the federal courts “finally took a breather.” The nugget that stopped us comes from Gail W.-S. v. United Healthcare, a District of Utah residential mental health treatment case. Per YEW's write-up, Judge Shelby awarded about $61,700 in fees at $600 an hour, plus roughly $88,500 in prejudgment interest at Utah's 10 percent statutory rate on about $103,000 in benefits. The interest nearly matches the benefit, and the court observed that “the insurance industry appears to need a strong push.” Also noted: a QDRO, the domestic-relations order that divides retirement benefits at divorce, submitted nine years late arrived too late to move a survivor annuity that had already vested in a second spouse (Gray v. DTE), and the Eastern District of New York joined the Second Circuit line holding a power of attorney cannot give an out-of-network provider standing to sue (Karkare v. Estee Lauder).

The quarterly survey tracks health plan design challenges after Barbich v. Northwestern, the forfeiture line following the Eighth Circuit's standing dismissal in Matula, actuarial-equivalence rulings in the Sixth and Eleventh Circuits, and the Supreme Court's withdrawal-liability decision in M&K Employee Solutions, with the Fifth Circuit's en banc surcharge case and Anderson v. Intel on the watch list.

Mercer's GRIST desk tallies the pension risk transfer docket after Schoen v. ATI: four district courts have now dismissed PRT challenges for lack of standing while four have let them proceed, with the DOL filing amicus briefs on the sponsor side and noting that no annuity selected in a risk transfer has defaulted in thirty years. The Konya and Doherty appeals are positioned to resolve the split.

The long-standing saver's tax credit, a nonrefundable credit for low- to middle-income taxpayers, is being replaced beginning next year with a government matching contribution of up to $1,000 annually paid directly into a plan or IRA. Groom walks through what Notice 2026-48 signals about the coming regulations.

In Munoz v. Alorica, Inc., No. 25-7359, 2026 WL 2199195 (9th Cir. July 30, 2026), former participants in the Alorica 401(K) Retirement Plan brought this action under ERISA on behalf of a putative class.

The Department of Labor recently issued proposed regulations that would implement sweeping revisions to long-standing electronic disclosure safe harbors for health and welfare plans.

In Guenther v. BP Retirement Accumulation Plan, No. 24-20551, 2026 WL 2031828 (5th Cir. July 14, 2026) (per curiam), the United States Court of Appeals for the Fifth Circuit vacated a judgment entered in favor of a class of current and former BP employees on their ERISA fiduciary-breach claims and remanded for the

“If at first you don’t succeed, try, try again” is a famous quote with unclear origins dating back over 200 years. It is a saying that plaintiff firms appear to have used as inspiration for their

Hall Benefits Law describes a proposed class action by four former Amazon employees who say the company routinely delayed or denied pregnancy accommodations, demanded excessive documentation and penalized them under timekeeping policies while requests were pending. Amazon’s response, quoted in the piece, is that it granted 99.95% of pregnancy-accommodation requests in 2025. No class has been certified and none of the allegations has been tested. The firm uses the case to walk employers through the federal pregnancy-accommodation law’s requirements, which run separately from the nursing-mother protections.

James Watkins reads five foundational court decisions on fiduciary prudence as one body of law about process, context and monitoring rather than a rule that the cheapest fund wins. His three-stage framework for prudence reviews is his own analysis, not anything a court has adopted. For committees, the thread is that a documented, reasoned process, not any particular investment outcome, is what the cases reward.

16 days separated a Brooklyn Sports & Entertainment executive’s return from parental leave and his firing, according to his complaint. He says a supervisor who had previously rated him as exceeding expectations gave him his first negative review seven days before the termination and had never documented a deficiency. He also alleges the company removed him from a conference while he was on leave. The suit claims retaliation under federal family-leave and New York laws and names the chief digital officer individually. For employers administering leave, the allegations put the timing and consistency of performance documentation in focus; they have not been adjudicated.

Justin Bove, Robert Davis, and Kent Mason, writing for Encore Fiduciary and Davis & Harman, trace the emerging class actions treating broker commissions on voluntary benefits as an ERISA problem, through excessive-commission allegations, carrier switching, and employers acting as their own brokers. The authors distinguish three questions that decide these cases, whether ERISA covers the arrangement, who acts as a fiduciary, and what counts as participant injury. On the last, they argue that commission comparisons alone do not establish injury. Their advice to sponsors is to document how carriers and brokers are selected, monitor premiums and commissions, and check insurance coverage, and their critique of the pending cases is defense-side advocacy rather than any court’s holding.

The court overseeing Bennett v. Ecolab has kept pending deadlines on hold and directed the plaintiff to request preliminary settlement approval by December 18. The case concerns the actuarial assumptions used to calculate pension benefits. The order exists only as text on the docket, and the linked record is the Digest’s transcription of that entry, verified against the [public docket](https://www.courtlistener.com/docket/68280047/bennett-v-ecolab-inc/). It does not disclose financial terms or approve a settlement.

Allied Painting & Decorating defeated the International Painters pension fund’s $427,195 withdrawal-liability assessment, with the Third Circuit holding in 2024 that the statute’s notice requirement is independent and the fund’s roughly 12-year delay sank its claim. Victory bought no fees. Judge Robert Kirsch adopted the magistrate judge’s [April opinion](https://digest.theinnerfirm.com/docs/allied-painting-v-iupat-fee-opinion-2026-04-29.pdf) denying Allied’s fee application, applying the circuit’s employer-specific standard that the fund’s position must have been frivolous, unreasonable, or without foundation, which a position resting on then-open legal questions was not. Conn Maciel Carey’s [commentary](https://www.jdsupra.com/legalnews/a-pyrrhic-victory-prevailing-employer-4745140/) frames the lesson for employers, which is that prevailing in a withdrawal-liability fight often still means paying your own lawyers. The demanding standard is specific to this setting, not every ERISA fee application.

Judge Christine Van Aken granted Wells Fargo summary judgment against Timothy Sloan, whose 2023 complaint sought roughly $34 million in canceled stock awards and withheld pay. What the public record shows is unusual. The merits order itself is sealed because it discusses material the court had already sealed as confidential business and employee information, some of it claimed protected by federal banking regulation in an [omnibus sealing order](https://digest.theinnerfirm.com/docs/sloan-v-wells-fargo-omnibus-sealing-order-2026-10-14.pdf) supported by a letter from the Comptroller’s office. The court has directed the parties to prepare a public version of the ruling, so the reasoning should eventually surface. Until it does, the outcome is public and the why is not.

PLANADVISER picks up Whitlock v. Provident, the California ruling that Lockton’s voluntary supplemental disability arrangement was an ERISA plan because of the employer’s involvement, endorsement, and compensation. The arrangement failed the exemption for voluntary coverage because Lockton endorsed it and received compensation, and Whitlock still lost her benefits claim after the court applied fresh review, per the [opinion](https://digest.theinnerfirm.com/docs/whitlock-v-provident-order-2026-09-30.pdf). The plan-status holding is what matters for employers who facilitate voluntary coverage. (Editor’s note: The article reverses the parties’ positions. Provident argued that ERISA applied; Whitlock argued that it did not.)

HR Dive covers the Fourth Circuit’s decision affirming the Title VII judgment against Catholic Relief Services over denied same-sex spousal health coverage. Despite the headline’s must-face wording, the court’s [opinion](https://digest.theinnerfirm.com/docs/doe-v-catholic-relief-services-ca4-opinion-2026-10-16.pdf) affirmed a judgment already entered against Catholic Relief Services. The holding was that religious motivation did not displace the sex-discrimination prohibition for a nonministerial employee.

Rick Case Enterprises and its plan fiduciaries have agreed to pay $209,000 to settle claims that a December 2022 recordkeeper move from Empower to Principal triggered a market value adjustment charged against participants invested in the 401(k) plan’s MassMutual stable-value fund. The unopposed [preliminary-approval motion](https://digest.theinnerfirm.com/docs/hebert-v-rick-case-prelim-approval-motion-2026-10-14.pdf), filed October 14, puts the class at about 111 participants and the aggregate adjustment at $263,279. The proposed $209,000 fund equals about 80% of that alleged loss before deductions; after the requested fees and expenses, the motion estimates about $145,929, or 55%, would reach participants, with no claim forms required, current participants paid by deposit into their plan accounts and former participants by check. The complaint alleged a prudent fiduciary would have timed or structured the transition to avoid the charge; the defendants say the adjustment was a disclosed contractual feature driven by 2022’s interest-rate spike and deny any breach. For any sponsor contemplating a recordkeeper change, the case is a reminder to model stable-value exit charges before the move. The motion is before Judge Anuraag Singhal.

Roberts Disability Law examines the October 9 ruling for Christopher Cude, whose former employer’s disability plan argued he had released his ERISA claim in a February 2024 severance agreement. Judge Anne Hwang [denied](https://digest.theinnerfirm.com/docs/cude-v-lincoln-national-order-2026-10-09.pdf) the Wells Fargo short-term disability plan’s summary-judgment motion and granted judgment for Cude on the release defense. His claim accrued only at the final denial on February 23, 2024, after the release was signed, and a backward-looking release cannot waive a claim that did not yet exist. The ruling resolves the release defense, not whether benefits are owed.

The National Association of Benefits and Insurance Professionals asks the District of Maryland to strike down a moratorium on training and registering new Marketplace agents and brokers for 2027 coverage. The moratorium runs through February 1, 2027, covering the November 1 to January 15 open-enrollment period. The complaint alleges the rule was adopted without required procedure or authority, says roughly 19,000 would-be new registrants are shut out, and asks the court to set the rule aside and order training to open. These are the association’s allegations.

PLANADVISER reports the October 1 [indictment](https://digest.theinnerfirm.com/docs/us-v-shabazz-indictment-2026-10-01.pdf) of Seku Shabazz, formerly Jason Brooks, accused of diverting roughly $38,000 in employee retirement contributions between January 2020 and May 2022 and of a related investment scheme exceeding $1.2 million. Prosecutors say he later drew about $220,000 in mortgage proceeds and repaid over $97,000 to the plan. The charges include embezzlement from an employee benefit plan, seven wire-fraud counts, three counts involving transactions in criminal proceeds and two counts of aggravated identity theft. The charges remain allegations.

NAPA reports the October 1 [indictment](https://digest.theinnerfirm.com/docs/us-v-shabazz-indictment-2026-10-01.pdf) of Seku Shabazz, formerly Jason Brooks, over the alleged diversion of employees’ retirement contributions and a separate investment scheme. Prosecutors allege he used contributions for personal expenses and later replenished the plan with mortgage proceeds. The charges remain unproved, and any discussion of sentencing exposure is conditional on conviction.

A federal judge has [preliminarily approved](https://digest.theinnerfirm.com/docs/johnson-callan-preliminary-approval-order-2026-10-14.pdf) a $9.25 million settlement over two carpenters retirement plans’ investments in Allianz Structured Alpha funds. Callan’s share is $5 million and the trustees’ share is $4.25 million, with fees and expenses deducted before participants receive benefits. According to plaintiffs’ counsel, the plans had already recouped their investment losses from Allianz, and this suit sought the additional returns the investments should have produced. Under the [agreement](https://digest.theinnerfirm.com/docs/johnson-callan-settlement-agreement-2026-10-13.pdf), payments depend on each plan’s allocation formula; pension participants generally receive added benefit credits. Defendants deny wrongdoing. Final approval remains ahead, with a hearing set for February 17, 2027.

Groom examines the dispute over who may serve on the federal vaccine advisory committee, whose recommendations help determine health plans’ preventive-care coverage. In a [March 16 preliminary ruling](https://litigationtracker.law.georgetown.edu/wp-content/uploads/2025/07/American-Academy-of-Pediatrics_2026.03.16_ORDER-ON-MOTION-FOR-PRELIMINARY-INJUNCTION.pdf), a Massachusetts federal judge stayed 13 challenged appointments after finding the committee likely failed federal requirements for balanced membership. The judge expressly declined to prohibit all committee meetings, leaving room for a lawfully constituted committee. The government’s [appeal](https://litigationtracker.law.georgetown.edu/wp-content/uploads/2026/05/American-Academy-of-Pediatrics_2026.07.21_DEFENDANTS-REPLY-BRIEF.pdf) challenges the appointment stay without seeking to overturn the separate stay of the January childhood-vaccine schedule changes. Groom reports that the October 6 argument focused on the remedy and the plaintiffs’ right to sue. Its concern about whether the existing committee can meet should be understood in light of that distinction. The litigation doesn’t itself establish a new vaccine-coverage exclusion.

A question mental health claimants increasingly ask, answered down the middle. In J.W. v. Quantum Health, a Southern District of Ohio magistrate judge let a family litigating a residential treatment denial proceed under first names and last initials while refusing full pseudonymity, finding only one of the Sixth Circuit's Porter factors satisfied, the utmost intimacy of a child's behavioral health history. The practical read is that partial anonymity may be reachable in benefits cases where the full pseudonym bar is not, decided case by case. It also mattered that the defendants already knew exactly who the plaintiffs were.

The Retirement Learning Center addresses what happens to outstanding 401(k) loan balances when employees arrive through a merger or acquisition, a recurring administration question in deal integration.

A Consumer Policy Center paper argues 401(k)s carry more risk than traditional pensions and that the shift places increased weight on Social Security.

In Bennett v. Hartford Life and Accident Insurance Company, No. 25-CV-21039-RAR, 2026 WL 2450695 (S.D. Fla. Aug. 21, 2026), United States District Judge Rodolfo A. Ruiz II granted the plaintiff's request to transfer the case out of her chosen forum, while shifting the costs of the move to her.

Treasury and the IRS proposed rules defining what a Trump Account can hold before the beneficiary turns 18: generally an unleveraged mutual fund or ETF tracking a broad U.S. equity index such as the S&P 500, charging no more than 0.1 percent in annual fees, with the trustee selecting a default fund when no election is made. The August 11 rules told employers what they may contribute; this one tells trustees what the money may sit in. Comments are due October 20, 2026.

The key is understanding that termination isn’t a single event but a process that requires formal employer action and a complete plan wind-up.

“As far as the nonqualified plan space goes, this is the premier event,” Barry Downey said of the upcoming NAPA Nonqualified Plan + Workplace Wealth Forum.

Roberts Disability Law, P.C. secured a procedural win for its client in Goldman v. Unum Life Insurance Company of America, No. 3:26-cv-01022-LJC, —F.Supp.3d—-, 2026 WL 2184768 (N.D. Cal. July 21, 2026), where United States Magistrate Judge Lisa J.

This month’s Friday Five discusses decisions (1) allowing a bad faith claim to proceed against a long-term disability insurer based on its handling of a claim for benefits, (2) enforcing a forum-selection clause in an ERISA plan against the plan’s insurers that were not parties to the plan, and more.

Investment menu rulemaking and outstanding SECURE Act and SECURE 2.0 guidance dominated the regulators’ newly posted lists.