BENEFITS DIGEST

Acrisure’s first-quarter 2027 calendar gives benefits teams the January-through-March picture. For applicable employers, it lists February 1 for W-2 health-coverage cost reporting and March 1 for the calendar-year Medicare Part D disclosure. It lists March 2 for furnishing ACA statements, subject to permitted alternatives, March 1 for eligible paper filers and March 31 for electronic filing. The calendar covers federal filings and notices with calendar-year qualifications and isn’t exhaustive.

Employers buying Medicare coverage for retirees would have another set of contract and network requirements to consider under this CMS proposal. Medicare Part D pharmacy benefit managers would have to pass through the full amount of manufacturer discounts and rebates and operate under new compensation restrictions. Medicare Advantage plans would face provider-directory checks and protections for members who rely on inaccurate listings when scheduling care. Most requirements would begin in 2028, with the first annual PBM reports due July 1, 2028 for the prior year. Comments close December 15 at 5 p.m. Eastern. This proposal concerns Medicare products, separate from Labor’s employer-plan PBM disclosure initiative.

Mercer’s 15-page explainer covers the employer side of the new child savings accounts, to which employers have been able to contribute since July 2026. The $2,500 exclusion applies per employee, not per child. Additional employer contributions outside the program are taxable wages, and individual and employer contributions remain subject to the account’s separate aggregate annual limit, while Social Security, Medicare, and federal unemployment taxes still apply under the proposed guidance. Minor employees cannot fund their own accounts pretax, and the linked proposed regulations carry their own open questions.

Medical billing codes that bundle maternity care into one payment will be replaced on January 1, 2027, by separate codes for prenatal care, labor management, delivery and postpartum care. The Foundation explains that Medicare was still considering whether to retain a bundled-payment option, with a final rule expected in November. Self-funded employers may see cost changes quickly because they pay claims directly, and a change designed to be cost-neutral nationally may still raise costs for an individual plan. Employers should ask insurers and administrators whether claims systems, contracts and reporting will be ready, then model their own maternity claims using the final rates.

Sarah Brenner walks through what Medicare enrollment changes for health savings accounts. New contributions end once Medicare coverage begins because Medicare is disqualifying other coverage, but existing balances stay available, nonmedical withdrawals after 65 escape the 20% penalty while remaining taxable, and Medicare premiums generally qualify as eligible expenses while Medigap premiums do not. Delayed Part A enrollment has retroactive-coverage consequences worth flagging in employee education for workers approaching 65.

Healthcare Dive’s report adds reporting context to the Medicare Advantage and Part D proposed rule published in the October 20 Federal Register, including the enforcement history behind the directory-accuracy push and reaction from the PBM side. The proposal would hold enrollees to in-network cost sharing when inaccurate listings mislead them and would restrict Part D PBM compensation to flat service fees. It remains a proposal, with comments due December 15, and its direct reach is Medicare arrangements rather than commercial self-funded plans.

Healthfirst, the large New York Medicare Advantage insurer, filed an Administrative Procedure Act challenge to five measures CMS used in scoring its 2027 star rating, asking the court to order a recalculation from 3.5 to at least 4 stars. Healthfirst alleges that the disputed rating will cost it more than $380 million in 2028 payments, and it attacks the agency’s handling of specific measures as arbitrary. These are allegations plus the insurer’s own math. The broader signal is that star-rating methodology fights are moving into the courts.

CMS proposes requiring Medicare Advantage plans to verify provider directories every 90 days, to hold enrollees to in-network cost sharing when an inaccurate listing misleads them, and to report accuracy information that would later become public. On the drug side, the proposal would restrict Part D PBM compensation to flat fair-market-value service fees, require rebate pass-through and disclosures, and eliminate certain generic copayments for low-income dual-eligible enrollees starting in 2028. The [fact sheet](https://www.cms.gov/newsroom/fact-sheets/medicare-program-implementation-sections-6219-6220-6224-consolidated-appropriations-act-2026-cms) carries the details, and different provisions carry different dates. For plan sponsors the direct reach is employer-group Medicare arrangements rather than commercial self-funded plans, and comments on the [proposed rule](https://www.federalregister.gov/d/2026-21420), published in the October 20 Federal Register, are due December 15.

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.

CBIZ’s October update flags three dates for employers. Medicare Part D creditable coverage notices, which tell employees whether their drug coverage is at least as good as standard Medicare coverage, are due before October 15. Extended Form 5500s for calendar-year plans are due October 15, and Massachusetts HIRD filings open November 15. The Labor Department’s benefits agency, in new Field Assistance Bulletin 2026-03, is focusing mental health parity enforcement on blanket exclusions of mental health treatment, the review practices plans use to decide whether care is necessary, and inadequate provider networks. Its updated red-flags checklist helps plans spot potential problems in their own designs while new regulations are drafted. The issue also covers the Trump Accounts temporary regulations, with IRS automatic enrollment reaching more than 60 million children and comments open through November 29, San Francisco’s 2027 health care expenditure rates, New York and New Jersey paid leave figures for 2027, and the District of Columbia’s October 1 reductions in paid family leave durations and maximum benefits.

KFF’s annual explainer lands ahead of Medicare open enrollment, which runs October 15 through December 7. Beneficiaries with employer or union retiree coverage can lose it permanently by switching between traditional Medicare and Medicare Advantage, because many employers offer retiree benefits exclusively through one or the other. Sixty-five percent of beneficiaries did not compare options during the last enrollment period. For 2027, the average beneficiary will have 35 Medicare Advantage plans to choose from. On the drug side, the Part D out-of-pocket cap reaches $2,400, and the new GLP-1 Bridge Program offers $50 monthly copays for weight-loss coverage outside Part D. The brief also notes that roughly 32,000 current beneficiaries are set to lose eligibility starting in 2027 under the reconciliation law’s immigration provisions.

Hall recaps Notice 2026-28, the Section 45S guidance implementing the budget law’s permanent extension of the paid family and medical leave credit. The useful operational detail is the new premium method. Employers insuring their paid leave can compute the credit from premiums rather than wages, whether or not anyone took leave that year, with blended premiums allocated between creditable and noncreditable coverage by any reasonable, consistently applied method supported by contemporaneous records. One leave event can’t claim both methods, though split funding can split the claim. State-mandated or state-paid leave counts toward eligibility but not toward the credit amount. Proposed regulations are coming.

A 2008 change gave retirement-eligible Rhode Island state employees a choice. Retire by September 30 and keep generous retiree health coverage, or keep working toward a larger pension with less generous health coverage later. A new working paper from Laura Quinby and Gal Wettstein uses that moment to measure what the benefit is actually worth to workers. A $1,000 present-value cut in retiree health coverage raised the probability of retiring by the deadline by 0.6 percentage points, twice the effect of an equivalent dollar of pension wealth, and the reform tripled the retirement rate against the prior year. The researchers estimate that these older Rhode Island state employees valued an additional dollar of retiree health benefits at least twice as much as an additional dollar of pension benefits. The subjects are government workers, but the lesson travels to any employer with employees approaching 65. When older workers decide whether to retire, health coverage weighs more heavily than retirement money, so an employer trying to understand why they stay on, or weighing what would actually let them leave, should look at the bridge to Medicare before sweetening the retirement plan.

Groom reads the new Treasury-IRS priority guidance plan, the agencies' annual list of the rules they intend to write. It carries 121 projects and no benefits surprises, and the item employers have waited longest for is still just a promise. Many employers fund retiree medical benefits through a tax-exempt trust called a VEBA, and some of those trusts now hold more money than the retiree benefits need. Redirecting the surplus toward coverage for current employees risks a 100 percent excise tax, the IRS stopped issuing private rulings blessing such moves seven years ago, and the regulations that would give employers a safe answer remain on the to-do list. Employers sitting on overfunded VEBAs keep waiting.

CMS wants comments on what a fair pharmacy contract looks like. A new request for information begins implementing a 2026 budget law amendment that requires the Secretary to set reasonable and relevant standards for the contracts Part D plans and their pharmacy benefit managers offer pharmacies, standards due by April 2028 and applying to plan years starting January 1, 2029. The questions reach well beyond Medicare mechanics: whether pharmacies are paid more or less than drugs cost them to buy, pricing guarantees measured across all drugs rather than drug by drug, whether Medicare contracts subsidize PBMs' commercial business, discounts under the federal 340B drug pricing program, which drugs get labeled specialty drugs, and what happens when the PBM and the pharmacy share an owner. Employer plan sponsors have seen every one of those issues in their own PBM negotiations, and standards CMS writes for Part D have a way of becoming the reference point for the commercial market. Comments are due November 23, 2026.

Two benefits deadlines are approaching. Health plans with prescription drug coverage must tell Medicare-eligible individuals before October 15 whether the coverage is creditable, meaning expected to pay, on average, at least as much as standard Medicare prescription drug coverage, so recipients can decide about Part D during Medicare open enrollment, which runs October 15 through December 7. Because employers rarely know which spouses and dependents are on Medicare, Venable recommends simply sending the notice to everyone enrolled in or eligible for the health plan, using the CMS model notices. The separate online disclosure to CMS is due within 60 days after the plan year begins. October 15 is also the extended Form 5500 deadline for calendar-year plans that filed a Form 5558 extension by July 31.

A year-end checklist for companies that sponsor retirement plans and executive pay arrangements. On the plan side, amendments documenting optional SECURE and SECURE 2.0 changes already in operation are due December 31 for calendar-year plans, while required changes can have later deadlines. On the executive side, three items reward attention before year-end. Social Security and Medicare taxes on deferred compensation are generally owed when the pay vests, not when it is paid, so amounts that vested in 2026 need payroll taxes handled by December 31. Elections to defer pay earned in 2027 must also be made by December 31, with narrow exceptions. And documentary problems in deferred-compensation arrangements can often be corrected without penalty if caught before the amounts vest, which makes a year-end review worth scheduling. Public companies should also confirm that equity-plan share reserves will cover grants planned through 2028.

Comments on the proposed rules for employer contributions to Trump accounts close tomorrow, September 25, with a public hearing October 15. Troutman walks through what a program requires under the August proposed regulations. A program needs a separate written plan, notice to eligible employees, and an annual statement of contributions. Up to $2,500 per employee each year, across all of the employee's children or other expected tax dependents, can be excluded from federal income tax. Dependent status is judged when the contribution is made, based on what the employee reasonably expects, with nothing to unwind if it changes later. The contributions remain subject to Social Security, Medicare, and federal unemployment taxes, so payroll systems must treat them differently from other pretax benefits. If a program fails its nondiscrimination testing, only highly compensated employees lose the tax break. The Labor Department has said these programs generally aren't ERISA plans.

CMS plans to add five programs for additional health conditions to its technology-enabled chronic-care payment model in spring 2027. The expansion, announced September 15, covers heart failure, COPD, substance use disorders, tobacco cessation, and longer-term care for muscle and joint conditions. The model already has 160 participating organizations. Foley Hoag reports that insurers covering 165 million people across Medicare Advantage, Medicaid, and private insurance have pledged to adopt similar payments tied to patient outcomes. If those commitments become contracts, the approach could extend to employer-sponsored coverage.

Written for construction employers, useful to any sponsor. A significant share of health plan cost is driven by who else is covered. Dependent-eligibility audits catch ineligible dependents whose claims an insurer or stop-loss carrier may refuse. Spousal surcharges and carve-outs raise consistency, Medicare and TRICARE questions. Opt-out payments must be structured through the cafeteria plan and counted in ACA affordability math. Each approach asks employers to weigh potential savings against administration, documentation and compliance obligations, and Saul Ewing's four-question checklist (clear eligibility definitions, administrative feasibility, interaction with other requirements, workforce impact) is the useful takeaway.

The fourth quarter calendar for health and welfare sponsors, in one place. October 2 brings QSEHRA and ICHRA notices and Medicare Part D subsidy applications; October 15, creditable coverage notices and extended Form 5500s; December 15, summary annual reports for extension filers; December 29, the employer share of MLR rebates within 90 days of receipt; December 31, gag clause attestations plus WHCRA and Section 1557 notices. A companion checklist covers open enrollment materials—SBCs, Michelle's Law, HIPAA notices, wellness alternative standard disclosures—and the state assessments landing this quarter, from Massachusetts payor assessments to Washington's long term care tax.

A rename, not a rulemaking: on September 3 the Small Business Administration and CMS announced that individual coverage HRAs will now go by CHOICE Arrangements, borrowing the branding from provisions of two House-passed bills that never survived final passage. Nothing structural changes—employers still reimburse individual market or Medicare coverage under the 2019 tri-agency framework—but the administration is signaling more rulemaking ahead, exploring flexibilities to boost adoption that has run well behind the original 800,000-employer projection. CMS has a new landing page for whatever comes next.

Part two puts numbers on the insurer's share: overhead and profit run about $846 per enrollee per year in the employer market, $987 in the individual market, and $1,655 in Medicare Advantage—where roughly a dime of every premium dollar stays with the plan, against under two cents of administrative cost in traditional Medicare. Margins are thin in percentage terms, but the seven largest publicly traded insurers, PBM subsidiaries included, earned an estimated $71 billion in 2024. The question posed is not whether they profit but what value comes back.

The closer lands on the tradeoff sponsors live with daily: someone has to decide what gets covered and paid, and KFF's polling finds prior authorization is the single biggest burden insured adults report beyond cost itself, with nearly half saying care was denied or delayed within two years. On price, private insurers pay roughly double what Medicare pays for hospital care. Utilization management controls spending and blocks care clinicians call necessary; the series declines to pretend there is a clean answer.

The Departments posted a statement confirming that the Fifth Circuit's August 11 en banc decision in Texas Medical Association v. HHS affirmed portions of a district court judgment striking certain regulations and guidance on how the qualifying payment amount is calculated. The Departments say they are reviewing the opinion and anticipate issuing guidance shortly, and that the Federal IDR process remains operational. Until that guidance issues, the QPA methodology the rules prescribed has no replacement.

In a published opinion by Judge Berzon, the Ninth Circuit held that ERISA does not preempt an out-of-network surgery center's negligent misrepresentation claim over a benefit-verification call in which Aetna said reimbursement would run at the UCR rate, then paid roughly five percent of the bill at the Medicare rate. The provider's injury is its own, not a derivative claim for plan benefits, and letting administrators misstate coverage to providers with impunity would undercut ERISA's purposes. The court still affirmed dismissal of the companion promissory estoppel claim as preempted, and the panel's line falls almost exactly where the Sixth Circuit refused to draw one eight days later in La-Z-Boy.

The Departments released a timeline guide fixing the applicability date for each piece of the June Federal IDR Operations final rules. Two dates matter most for group health plans: the revised batching rules reach disputes whose open negotiation period begins on or after November 1, 2026, and the new remittance advice coding requirements attach to items and services furnished on or after January 1, 2027.

The full picture on the Alcoa decision the Digest flagged Monday: Roberts walks through the Seventh Circuit's holding that the CBAs' silence on benefit duration supports class treatment of 3,000-plus pre-1993 retirees, while the judicial-estoppel basis for the retirees' summary judgment win could not stand.

More than 3,000 pre-1993 Alcoa retirees sued when the company terminated their lifetime retiree healthcare benefits in 2021. On Friday the Seventh Circuit affirmed class certification, holding that the collective bargaining agreements' silence on benefit duration lets the retirees prove vesting through common evidence, but reversed the summary judgment they had won below, rejecting the district court's judicial-estoppel theory and returning the vesting question to the merits. (Blurb corrected 8/17: an earlier version mischaracterized the dispute as a pension-calculation challenge.)

The detailed accounting, published as notification letters began going out: names, Social Security numbers, member and Medicaid/Medicare identifiers, and dental and vision treatment and billing information, with independent analysis suggesting up to 23.4 million unique individuals, including 1.7 million Social Security numbers that appear to belong to children. Affected individuals are being offered 24 months of credit monitoring.

Segal examines what the early end of the Medicare Part D Demonstration program means for premiums and retiree health plans.

Physician and outpatient services and prescription coverage pose a significant threat to US fiscal resources, according to Boston College’s Center for Retirement Research.