On June 17th, 2024, the Internal Revenue Service (IRS) and Treasury issued new FAQ guidance clarifying the rules governing educational assistance programs (“Programs”).  These Programs were designed to allow for tax-favored reimbursement of qualified educational expenses. Among other clarifications, the new guidance clarifies that student loan payments are one of a variety of expenses included within the definition of “qualified educational expenses,” and as such, they can be reimbursed on a tax-favored basis.

On June 27, 2024, the U.S. Supreme Court issued a decision in Moyle v. United States, in which it affirmed that the Emergency Medical Treatment and Labor Act (EMTALA) necessitates the performance of emergency medical treatment for abortion, and thus, it preempted an Idaho law that restricted medically necessary abortions. As background, enacted in 1986, EMTALA requires any hospital with an emergency room that receives Medicare funds (virtually all hospitals) to provide stabilizing treatment to anyone who comes to the hospital experiencing an emergency medical condition.

On June 28, 2024, the U.S. Supreme Court overturned the long-standing doctrine of “Chevron deference,” a doctrine that gave significant power to government agencies in interpreting and implementing statutory rules for the statutes those agencies administer. Chevron deference required courts to defer to agencies’ reasonable interpretations of statutory language. While the Court made this decision prospectively, it also specified that previous decisions implementing Chevron deference would not be overturned. Given that most benefits-related rules and regulations are implemented by government agencies, the Court’s decision could spark litigation surrounding benefits rules that have been in place for a long time.

On July 3, 2024, a federal district court in Mississippi issued a nationwide preliminary injunction prohibiting the U.S. Department of Health and Human Services (HHS) from enforcing the gender identity provisions of HHS’ final rule implementing Section 1557 of the Affordable Care Act (ACA). The new final rule under Section 1557 of the ACA (discussed in our E-Alert here) was set to go into effect on July 5, 2024. On the same day, ruling on a separate lawsuit against the same final rule, a federal district court in Texas granted another preliminary injunction against the rule as it applied to Texas and Montana. These injunctions come on the heels of Loper Bright Enterprises v. Raimondo, the recent U.S. Supreme Court decision that overturned 40 years of precedent by ending the Chevron doctrine (also known as “Chevron deference”), a doctrine which required courts to defer to government agencies’ reasonable interpretations of statutory language for statutes those agencies administer. The courts in these decisions reasoned that HHS had overstepped its authority when creating this regulation.

On July 30, 2024, former Wells Fargo employees filed a class action lawsuit against Wells Fargo alleging that the bank and its plan fiduciaries breached their fiduciary duties and mismanaged the bank’s prescription drug benefits program, costing their plan and their employees millions of dollars. Among other allegations, the lawsuit alleges that the plan failed to fulfill their fiduciary duties in selecting Express Scripts as the plan’s pharmacy benefits manager (PBM). One example of mismanagement alleged in the complaint was a plan participant paying nearly $10,000 for a 90-day supply of a generic drug used in the treatment of multiple sclerosis, a prescription that would have cost around $650 without insurance.

This complaint’s allegations closely mirror those made in a class action filed against Johnson & Johnson in February (see our e-Alert here). This lawsuit is the second in what is expected to be a new wave of ERISA class action lawsuits focusing on excessive plan costs and service provider fees.

Louisiana Governor Jeff Landry signed a new bill into law which will take effect October 1st that reclassifies two medications commonly used in abortions as Schedule IV drugs. The two drugs—mifepristone and misoprostol—are drugs used to induce abortions up to ten weeks into a pregnancy. Possessing these drugs without a valid prescription can now be punishable with up to 10 years in prison.

On June 13, 2024, the U.S. Supreme Court ruled in FDA v. Alliance for Hippocratic Medicine that a group of doctors challenging the FDA’s approval of the abortion medication mifepristone lacked legal standing, thus preserving access to the widely used abortion pill. Mifepristone is used in about two-thirds of U.S. abortions. This decision does not preclude other challenges to mifepristone’s legality. Therefore it is possible that the Court could still rule against continued access to the medication in a later court decision.

On May 13, 2024, the 11^th Circuit Court of Appeals affirmed in Lange v. Houston County a lower court’s decision holding that a self-insured health plan’s exclusion of gender-affirming healthcare violated Title VII of the Civil Rights Act of 1964. The lawsuit was brought by a transgender employee whose physician recommended gender-affirming surgery and hormone therapy to treat gender dysphoria. The employee’s healthcare provider determined that her gender-affirming healthcare was medically necessary. However, her request for coverage was denied based on the health plan’s exclusion of gender-affirming care. The district court granted summary judgement confirming the health plan’s exclusion was discriminatory under Title VII and the 11^th Circuit affirmed the district court’s ruling.