Uncategorized – North Risk Partners

Preparing Jobsites for Severe Weather

Jarrica Walston — Mon, 20 Jul 2026 13:10:03 +0000

Severe weather conditions can be detrimental to worksites by damaging equipment, compromising structural integrity, delaying project timelines, and putting workers at risk. However, employers can take measures to reduce these risks. This blog outlines common weather hazards affecting construction sites and provides practical steps employers can take to prepare for severe weather.

Types of Weather Hazards

Extreme weather can come in many forms. Before preparing your jobsite, it’s important to understand the types of severe weather conditions most likely to affect it, which can vary by season and location. The following are common weather conditions that can impact jobsites:

Strong winds—High winds, which can accompany tornadoes or hurricanes, can bring unwanted debris into the jobsite, throw equipment around and, in extreme cases, compromise the integrity of a structure.
Heavy rain and flooding—Water is one of the most damaging forces to any jobsite. Jobsites with incomplete drainage may become flooded, and heavy rain can damage unprotected electrical equipment.
Winter conditions—Winter weather brings its own unique set of exposures, such as ice that poses slip, trip and fall hazards as well as cold temperatures that may lead to hypothermia.

How to Prepare the Jobsite

While employers may not be able to weatherproof their jobsites fully, the following measures can help prevent damage and allow construction crews to continue work as soon as possible:

Develop an emergency action plan. Create a detailed and well-practiced plan that accounts for site-specific exposures, protects equipment and workers, and assigns clear roles to employees. Review and update the plan regularly, especially at the start of severe weather seasons.
Monitor the weather continuously. When inclement weather is forecasted, designate one person to monitor for weather alerts. Keep a weather radio or computer on-site at all times. Establish clear thresholds, such as wind speeds or storm categories, that will automatically trigger your emergency action plan.
Communicate with local building officials to align plans and verify the site does not pose risks to nearby properties or residents.
Secure or remove equipment and materials in preparation for a storm or severe weather. Be sure to include dumpsters, cranes, signage, electronics and documents, hazardous chemicals, and utility systems, among other equipment. For machinery, follow manufacturer guidelines for proper operation and storage, and do not operate machinery during a storm.
Prepare for water intrusion and debris. Create and maintain temporary drainage systems in areas that are especially susceptible to flooding. Do not install finished elements such as flooring and drywall until windows, doors, and the roof have been installed and made watertight. If necessary, install temporary roofs where installation of the permanent roof may be delayed. Additionally, have a plan to remove any storm debris after severe weather.
Secure the structure. Consider boarding windows, doors, and openings and building a sandbag perimeter to prevent flooding. Brace framing and anchor walls to the framework as soon as it is constructed. Pay special attention to any partially completed sections of the structure that may be more vulnerable to wind or rain damage.
Conduct a post-storm evaluation. Before resuming work, carefully inspect the site to identify damaged equipment and areas that require attention to protect worker safety.

If you have questions, please contact a North Risk Partners Advisor.

This blog is not intended to be an exhaustive source of information nor should any discussion or opinions be construed as legal advice. Readers should consult legal counsel or a licensed insurance professional for appropriate advice. © 2026 Zywave, Inc. All rights reserved.

7 Best Practices to Prevent Heat Illness on the Job

Jarrica Walston — Mon, 20 Jul 2026 13:00:17 +0000

Construction workers face an increased risk of heat illness and even death due to physical exertion, direct sun exposure, and limited access to shade and cooling measures on jobsites. OSHA’s General Duty Clause requires employers to protect workers from heat hazards. Construction employers can help maintain compliance by implementing the following seven best practices.

Develop a written heat illness prevention plan. Employers should create a plan that addresses daily oversight, employee heat tolerance, work practices and controls to reduce heat stress, heat-stress measurement, and training for workers and supervisors. Each heat illness prevention plan should be site-specific, based on crew size, nature of work, site layout, location and available resources. This ensures that preventive measures aren’t a generic checklist but instead reflect the actual conditions workers encounter.
Monitor the heat index. Effective heat management requires employers to monitor the heat index throughout the day rather than relying solely on temperature. Employers should use a reliable heat monitoring method, such as a wet-bulb globe temperature meter, and adjust work-rest schedules, hydration requirements and other heat controls as conditions change. Occupational heat exposure is determined by physical activity, air temperature, humidity, sunlight, heat sources, air movement and workers’ clothing.
Establish work-rest cycles. Effective work-rest cycles are determined by the heat index and the intensity of work (e.g., running a plate compactor in direct sun versus doing finish work in the shade). Employers should encourage frequent rest and cooling breaks during high-heat conditions. Job rotation is another option, where high-intensity work is scheduled for cooler times, such as the morning, or moved to a cooler area.
Have water available on-site. Adequate hydration is vital to preventing heat illness. Employers should ensure that there is plenty of water available at the active worksite, not a distance away at a trailer or office, to encourage employees to hydrate frequently.
Provide cooling personal protective equipment (PPE). Standard PPE can actually trap heat and accelerate heat stress. Employers should provide construction workers with PPE well-suited to hot conditions. This can include cooling towels and bandanas, moisture-wicking base layers, ice- or gel-cooling vests, and hard-hat sun shields.
Make shaded break areas accessible. Shaded or climate-controlled recovery areas should be easily accessible from active work zones. Such areas may include tents, canopies or air-conditioned trailers located close enough for workers to use during scheduled and unscheduled cooling breaks. Workers lose much of the recovery benefit when they must travel long distances to reach a cooling area.
Implement an acclimatization period for new and returning workers. Employers should implement a structured acclimatization program for new hires, workers returning from extended absences and employees exposed to significantly hotter conditions than they are accustomed to. Workloads and heat exposure should be gradually increased over several days, while supervisors monitor workers for signs of heat-related illness. Heat acclimatization is critical because it increases workers’ tolerance and reduces heat-related risks.

Considering that peak heat illness season is here, employers should verify that these seven practices are implemented on their jobsites to help maintain compliance with OSHA standards and protect workers.

If you have questions, please contact a North Risk Partners Advisor.

Spring 2026

Kiley Westby — Fri, 17 Jul 2026 15:40:23 +0000

Click Here to View the Spring 2026 Edition of The Advisor

Individual Coverage HRAs (ICHRAs)

Greta Wilson — Tue, 14 Jul 2026 18:10:49 +0000

Individual Coverage Health Reimbursement Arrangements (ICHRAs) are employer-funded health plans that allow tax-favored reimbursement of individual health insurance premiums, including Medicare, and other qualifying medical expenses. Unlike traditional group health plans, ICHRAs shift plan selection to employees while allowing employers to maintain cost control and reduce administrative complexity. Employees purchase their own individual health coverage or enroll in Medicare, and employers reimburse eligible expenses up to a defined amount.

When Do ICHRAs Make Sense?

ICHRA adoption has grown as employers look for alternatives to traditional group health plans. It can be especially attractive for employers struggling with participation requirements, high turnover, or geographically dispersed workforces. Employers that have experienced rising premiums due to unfavorable claims experience may also find value in transitioning to individual coverage, where rates are community-based rather than employer-specific.

ICHRAs provide a way to extend benefits to part-time employees or other populations that are not typically eligible for group health coverage. An ICHRA can also serve as a strategy to meet employer mandate requirements under §4980H for applicable large employers.

How Does Funding and Reimbursement Work?

ICHRAs provide employers with significant flexibility in determining contribution amounts and eligible expenses. There are no minimum or maximum funding requirements, allowing employers to align contributions with budget goals or affordability requirements under the employer mandate.

Reimbursements can be structured to cover insurance premiums, other qualifying medical expenses, or both. However, all reimbursements must comply with IRS substantiation rules, requiring appropriate documentation before payment is made. Employers may also choose whether unused amounts carry over from year to year or are forfeited at the end of the plan year.

For ICHRAs providing premium reimbursement, which they typically do, employers can require employees to pay premiums upfront and then request reimbursement, but many employers streamline the process through direct payment arrangements or reimbursement tools.

What Are the Core Design & Compliance Requirements?

To receive reimbursements through an ICHRA, employees and any covered dependents must be enrolled in individual health insurance or Medicare. Enrollment must be substantiated both annually and each time expenses are submitted for reimbursement.

Employers must offer ICHRAs consistently within defined classes of employees, such as full-time, part-time, salaried, hourly, seasonal, or employees working in a specific geographic location. It is not possible to offer an ICHRA solely to those who are Medicare-eligible. Employers cannot offer employees a choice between a traditional group health plan and an ICHRA within the same class.

ICHRAs require advance notice to eligible employees, generally at least 90 days before the start of the plan year. This notice is intended to help employees understand how the ICHRA works and how it may impact eligibility for subsidies through the public Marketplace.

Are There ACA Employer Mandate or Reporting Considerations?

For applicable large employers, ICHRAs can be used to satisfy §4980H offer of coverage requirements. An ICHRA qualifies as an offer of minimum essential coverage, and if structured correctly, can also meet affordability and minimum value standards.

Affordability is determined based on the cost of the lowest-cost silver plan available to the employee, reduced by the employer’s ICHRA contribution. If the remaining cost to the employee falls within IRS affordability thresholds, the coverage is considered affordable. Safe harbor methods based on the federal poverty level, rate of pay, or Form W-2 wages may be used to confirm affordability.

Applicable large employers offering ICHRAs must report offer of coverage information on Form 1095-Cs. In addition, since an ICHRA is a self-funded minimum essential coverage, any size employer offering an ICHRA must report ICHRA enrollment information on Form 1095-Bs or Form 1095-Cs (Part III).

How do ICHRAs Interact with Premium Tax Credits?

The availability of an ICHRA affects an employee’s eligibility for premium tax credits (PTCs) through the Marketplace. If an ICHRA offering is affordable, the employee (and any eligible dependents) will not qualify for a PTC, even if they decline the ICHRA. If the ICHRA offering is not affordable, the employee may choose between enrolling in the ICHRA or receiving a PTC but cannot receive both.

Are There Any Additional Compliance Considerations?

ERISA

ICHRAs are group health plans subject to ERISA, meaning they must comply with plan documentation and reporting requirements. However, individual policies purchased by employees can remain outside ERISA if the employer does not endorse specific carriers and meets certain safe harbor requirements.

COBRA

COBRA continuation coverage applies to ICHRAs, although it is often not a practical option due to cost. Employers must still offer COBRA continuation for the ICHRA following qualifying events, allowing participants to continue accessing reimbursements if they elect coverage and pay the COBRA premium.

HSA Eligibility

ICHRA design can also impact health savings account (HSA) eligibility. Plans that reimburse only premiums generally preserve HSA eligibility, while broader reimbursement designs may disqualify participants from contributing to an HSA unless the ICHRA is designed to be post-deductible or available solely to reimburse excepted benefits (e.g., dental or vision expenses).

PCORI

ICHRAs are subject to various nondiscrimination rules and other compliance requirements, including PCORI fees, Medicare Secondary Payer rules, and age discrimination considerations. Employers must ensure that plan design does not disproportionately favor highly compensated employees or otherwise create compliance risks.

Summary

ICHRAs offer a flexible alternative to traditional group health plans by allowing employers to define contributions while giving employees greater control over their health coverage choices. When properly designed and communicated, they can provide cost predictability for employers and meaningful choice for employees. However, successful implementation requires careful attention to eligibility rules, affordability standards, and ongoing compliance obligations.

If you have questions, please contact your North Risk Partners Risk Advisor. Don't have an advisor? No problem. We'll help you find one.

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While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.

Form 5500s for Health & Welfare Plans

Greta Wilson — Tue, 14 Jul 2026 18:04:22 +0000

The Form 5500 Series is part of ERISA’s reporting and disclosure framework and serves as a key compliance tool for the Department of Labor (DOL), plan participants, and other government agencies. For health and welfare plans, the Form 5500 is an annual filing that provides information about an employer’s ERISA benefit plans, including medical, dental, vision, life and more.

These filings are publicly available and are used to monitor compliance, evaluate benefit trends, and ensure transparency for plan participants. While retirement plans are also subject to Form 5500 requirements, this summary focuses on health and welfare plans.

Which Plans Must File

Form 5500 filing requirements apply to benefit plans that are subject to ERISA. Most employer-sponsored health and welfare benefits fall into this category.

In general, an unfunded ERISA plan, where claims and plan expenses are paid out of the employer’s general assets, must file a Form 5500 if there are 100 or more participants at the beginning of the plan year. Participant counts include covered employees and certain former employees (such as COBRA participants), but do not include spouses or dependents.

Plans that are funded (funds segregated in a separate account or trust – e.g., a VEBA) must file regardless of size. In addition, plans sponsored through a multiple employer welfare arrangement (MEWA) are subject to filing requirements even if participant counts are below 100.

Certain arrangements are not subject to ERISA and therefore do not require a Form 5500. These include plans sponsored by government or church employers, certain voluntary benefits with minimal employer involvement, and common payroll practices such as PTO or sick leave paid from the employer’s general assets.

Filing Deadlines and Process

Form 5500 filings are due on the last day of the seventh month following the end of the plan year, including short plan years. For calendar year plans, this typically means a July 31 deadline. Employers may request an automatic extension of up to 2½ months by filing Form 5558, extending the deadline to October 15 for calendar year plans.

All filings must be submitted electronically through the DOL’s EFAST2 system. Employers may prepare filings directly using the DOL’s online tools or work with third-party vendors such as consultants, accountants, or legal advisors. Individual filing credentials are obtained through Login.gov and are tied to individuals rather than specific companies.

Determining the Number of Filings

A separate Form 5500 is required for each ERISA plan. However, employers have flexibility in defining what constitutes a single plan through plan documentation. Many employers use a WRAP document to bundle multiple benefits, such as medical, dental, vision, and life insurance, into one ERISA plan.

Bundling benefits can significantly simplify reporting by allowing a single Form 5500 filing, provided the combined plan meets the filing threshold. Without a WRAP document, each benefit may be treated as a separate plan, potentially requiring multiple filings.

For employers operating within a controlled group, a single Form 5500 may be filed for a shared plan, with one entity designated as the plan sponsor. In contrast, multiple employer welfare arrangements (MEWA) may require separate filings depending on how the plan is structured and governed.

Form Structure and Required Information

The Form 5500 consists of a main body and, where applicable, supporting schedules. The main body includes three parts:

Plan year, plan type, and filing type (e.g., first, final, amended);
Plan identifiers (e.g., plan name, number, and effective date), plan sponsor and plan administrator’s name, EIN and contact information, participant counts at start and end of plan year, codes to indicate what types of benefit are offered, plan funding details, and which schedules, if any, are attached; and
Indication of whether the plan is a MEWA required to file a Form M-1.

Additional schedules may be required depending on how the plan is funded and administered. Fully- insured plans require Schedule A, which includes insurance-related information provided by carriers. If the insurance company does not automatically furnish a Schedule A, it is the employer’s responsibility to request one. Should the carrier fail to provide a Schedule A, the employer must still complete the Schedule A to the best of their ability and indicate that the carrier failed to provide the required information.

With unfunded, self-funded plans, often only the Form 5500 main body is required, and no schedule attachments are necessary.

When multiple benefits are combined under a WRAP document, the filing must reflect the entire plan, including total participant counts and all applicable benefit types and funding sources.

Penalties and Correction Programs

Failure to file a required Form 5500 can result in significant penalties. Under ERISA, penalties can accrue daily and reach substantial amounts if left unaddressed. A filing that is rejected is treated as not filed until corrected.

To encourage compliance, the DOL offers the Delinquent Filer Voluntary Compliance Program (DFVCP), which allows employers to submit late filings with significantly reduced penalties. This program is generally available only if the employer takes action before being contacted by regulators.

Summary Annual Report (SAR)

Employers that file a Form 5500 may also be required to distribute a Summary Annual Report (SAR) to plan participants. The SAR is a simplified summary of the Form 5500 and includes basic financial and plan information, along with participant rights. In practice, SAR requirements most commonly apply to fully-insured plans (most self-funded plans are exempt). The SAR must generally be distributed within nine months after the end of the plan year, or within two months after an extended filing deadline. Distribution must comply with ERISA disclosure rules, which allow delivery by mail, hand, or electronically under certain conditions.

Key Takeaways

Form 5500 compliance is an important component of ERISA plan administration and requires careful attention to plan structure, participant counts, and funding arrangements. Employers should regularly review their benefit structure, confirm whether filing thresholds are met, and ensure that filings are completed accurately and on time.

If you have questions, please contact your North Risk Partners Risk Advisor. Don't have an advisor? No problem. We'll help you find one.

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Nebraska Enacts New Mini-WARN Act

Jarrica Walston — Tue, 07 Jul 2026 13:36:46 +0000

Nebraska employers planning significant workforce reductions should be aware of a new compliance requirement.

Effective July 18, 2026, Nebraska's Worker Adjustment and Retraining Notification Act (Mini-WARN Act) requires certain employers to provide advance notice before qualifying business closings or mass layoffs.

Employers with operations in Nebraska should understand whether the new law applies to them and update their workforce reduction planning processes accordingly.

When the Law Applies

The law applies to employers with 100 or more employees, excluding part-time employees.

For purposes of the law, a part-time employee generally means an employee who works an average of 19 or fewer hours per week or has been employed for fewer than six of the 12 months preceding the date notice is required.

Covered employers generally provide 90 days' advance written notice before certain business closings or mass layoffs. A business closing occurs when a temporary or permanent shutdown of a single site of employment, or one or more facilities or operating units at the site, results in an employment loss for 100 or more employees, excluding part-time employees. A mass layoff occurs when a reduction in force that is not tied to a business closing results in an employment loss of 100 or more employees at a single site of employment during any 30-day period, excluding part-time employees.

For purposes of the law, an employment loss generally includes an involuntary termination (other than for misconduct), a layoff lasting more than six months, or a reduction in an employee's work hours of more than 50% for six consecutive months.

Employers should also be aware of the law's 90-day aggregation rule. Separate layoffs or workforce reductions that occur within 90 days may be combined when determining whether notice requirements apply. As a result, employers planning phased workforce reductions should evaluate the total impact of employment losses rather than reviewing each action independently.

Notice Requirements

Covered employers must generally provide written notice to affected employees and the Nebraska Department of Labor at least 90 days before a qualifying business closing or mass layoff.

The notice must include:

Employment site name and address
Employer contact information
Whether the action is temporary or permanent
Expected dates and schedule of employment losses
Names and job titles of affected employees
Copies of all employee handbooks, personnel policies, and employment-related policies, or instructions on where those materials can be accessed online

In addition, employers must post the notice in a visible workplace location and in any language spoken by at least 5% of the workforce.

The law does include limited exceptions that may allow employers to provide less than 90 days' notice in certain circumstances, including:

Unforeseeable business circumstances
Natural disasters
Business closings where the employer was actively seeking capital or business

Employers relying on one of these exceptions must still provide notice and explain why the full notice period could not be met.

Nebraska also allows employers to provide pay or severance instead of the full notice period, as long as employees receive at least the same amount they would have earned if they had worked through the required notice period.

What Employers Must Do

Review Workforce Reduction Procedures

Update any reduction-in-force or workforce planning procedures to account for Nebraska's new notice requirements.

Identify Who Will Manage WARN Notices

Determine who within your organization will be responsible for preparing, reviewing, and distributing required notices.

Review Employee Policies and Handbooks

Since notices must include access to applicable employment policies, employers should confirm that handbooks and workplace policies are up to date and readily accessible.

Evaluate Workforce Language Needs

Review employee demographics to determine whether any language groups meet Nebraska's 5% threshold for translated workplace postings.

The biggest takeaway for Nebraska employers is simple: start the WARN analysis earlier.

Organizations considering significant workforce reductions should build Nebraska's notice requirements into the planning process from the beginning rather than addressing them after decisions have already been made.

If you have questions about this blog, please contact your North Risk Partners advisor. Don't have an advisor? No problem. We'll help you find one.

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This blog was written in partnership with Wagner, Falconer, & Judd. Wagner, Falconer, & Judd (WFJ) is a firm with 70 employees based in the Midwest, serving clients across the country. With roots dating back to 1932, WFJ works with businesses of various sizes and industries. The firm specializes in human resources and employment law, commercial collections, civil litigation, and more.

This provides general information and does not constitute legal advice. 

Do Interns & Temporary Employees Have to Be Offered Benefits?

Jarrica Walston — Mon, 20 Apr 2026 19:03:23 +0000

Employers often assume that an offer of coverage is not required for short-term or temporary positions, but that is not always the case. Whether an employer is hiring summer interns, hiring seasonal employees to keep up with increased demand at a certain time of year, or hiring to temporarily fill a position while another employee takes a leave of absence, these employees are often expected to work full-time hours, and therefore, the question arises: Does the position require an offer of coverage?

To answer this question, three factors must be considered:

Is the employer an applicable large employer (ALE)?

If the employer is an ALE, are they utilizing the look-back measurement method or the monthly measurement method?

If the employer is an ALE utilizing the look-back measurement method, are the temporary employees considered seasonal under §4980H?

Small Employers

For a small employer (i.e., has fewer than 50 full-time equivalents and thus is not an ALE), there is no obligation to make an offer of coverage to temporary employees. Small employers have broad flexibility to design benefit eligibility rules as desired, subject to any applicable state law. That being the case, small employers who utilize temporary employees and would prefer not to offer coverage to them should ensure that their plan eligibility rules specifically exclude that category of employees. Otherwise, a temporary employee meeting the plan eligibility requirements (e.g., working 30 or more hours per week) could argue that they are entitled to an offer of coverage.

Applicable Large Employers (ALEs)

ALEs (50 or more full-time equivalents) have to be a little more careful, at least in regard to their group medical plan. For benefits other than major medical, the employer could choose to handle eligibility rules as suggested above for small employers; however, the employer risks §4980H penalties if temporary employees are full-time and are not offered medical coverage. Whether temporary employees are considered full-time for §4980H purposes may depend on whether the employer is using the monthly measurement method or the look-back measurement method. Keep in mind that the method chosen must generally be used for all employees, or at least all hourly employees (it is possible to differentiate methods between hourly and salaried employees).

If an ALE is using the lookback measurement method…

Temporary employees that meet the §4980H definition of "seasonal" (see below) may be subject to an initial measurement period of up to 12 months, which prevents them from ever being considered full-time. Either they will not average enough hours to be considered full-time over the entire initial measurement period, or they will terminate employment prior to the beginning of the associated stability period. But temporary employees who do not meet the definition of seasonal and are expected to average full-time hours require an offer of medical coverage after the plan waiting period to avoid incurring potential penalties under §4980H.

Seasonal Employee

§4980H defines a "seasonal employee" as an employee in a position for which the customary annual employment is 6 months or less. The reference to customary means that by the nature of the position, an employee in this position typically works for a period of 6 months or less, and that period should begin each calendar year in approximately the same part of the year (such as summer or winter). In other words, if an employer hires temporary employees throughout the year to help with projects as needed, or hires temporary employees who typically work beyond 6 months, then those employees cannot be classified as seasonal.

If an ALE is using the monthly measurement method…

For employers utilizing the monthly measurement method, any employee (including temporary employees) is considered full-time if they achieve 130 or more hours of service per month. If a temporary employee is expected to average full-time hours, even on a short-term basis, an offer of medical coverage is required after the plan waiting period to avoid potential penalties under §4980H.

Penalty Risk for ALEs

An ALE can avoid the bigger §4980H(a) penalty if coverage is offered to 95% or more of full-time employees each month. So, if temporary employees are full-time (and not considered seasonal for employers using the lookback measurement method) and not offered medical coverage, the employer could face a penalty under §4980H(a) if temporary employees make up 5% or more of the total full-time employee count during any particular month. A penalty under §4980H(a) is calculated monthly as follows for 2026: (full-time employee count - 30) x $278.33.

Even if the temporary employees make up less than 5%, the employer is still at risk for the §4980H(b) penalty at a cost of $417.50/month (in 2026) for each full-time temporary employee who is not offered medical coverage and enrolls in subsidized coverage through a public Marketplace.

If you have questions, please contact your North Risk Partners Risk Advisor. Don't have an advisor? No problem. We'll help you find one.

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ERISA Fiduciary Duties

Jarrica Walston — Mon, 20 Apr 2026 18:55:43 +0000

Recent class action lawsuits have put a renewed spotlight on employers' ERISA fiduciary responsibilities when sponsoring health and welfare plans. Employers that offer ERISA-covered benefits are expected to maintain sound governance practices, make informed decisions, and actively oversee vendors and fees, while also ensuring plan terms are followed and communications are clear and accurate. As fiduciary litigation continues to evolve, these cases serve as a timely reminder that employers must play an active role in managing their benefit plans prudently and in the best interests of plan participants.

ERISA Fiduciary Duty Basics

ERISA §404 outlines the duties of a plan fiduciary and requires fiduciaries to perform their duties:

solely in the interests of participants and beneficiaries;

for the exclusive purpose of providing plan benefits, or for defraying reasonable expenses of plan administration;

with the care, skill, prudence and diligence that a prudent person acting in a like capacity and familiar with such matters would use; and

in accordance with the documents and the instruments governing the plan insofar as those documents and instruments are consistent with ERISA.

ERISA fiduciary duties include, among other things, administering the plan in accordance with plan documentation, including eligibility rules and claims procedures; providing participant disclosures; choosing and monitoring vendors to help administer the plan; and properly handling plan assets.

See further guidance from the Department of Labor's publication here.

It is not always clear whether a particular action or decision will rise to the level of a fiduciary breach. Rather than focusing on any single choice in isolation, the full set of facts and circumstances and how the plan is managed overall should be considered. For example, selecting a vendor that is not the lowest-cost option is not, by itself, a breach of fiduciary duty if the vendor provides additional value or services that benefit the plan. Similarly, conducting appropriate due diligence and documenting the decision-making process can help demonstrate that a decision was reasonable and prudent, even if the outcome ultimately differs from what was expected.

Who is a Plan Fiduciary?

Employer-sponsored plans subject to ERISA should have a named fiduciary. Typically, this is an individual, or sometimes a committee of people, working for the plan sponsor with decision-making authority. However, fiduciary status can also flow from the plan functions performed by a person who is not otherwise named as a fiduciary. It is not a person's title, office, or other formal designation that determines fiduciary status. Specifically, under ERISA §3(21), a person is a "fiduciary" with respect to an employee benefit plan to the extent that the person:

exercises any discretionary authority or discretionary control respecting management of the plan or exercises any authority or control respecting management or disposition of plan assets;

renders investment advice for a fee or for any other compensation, direct or indirect, or has any authority or any responsibility to do so; or

has discretionary authority or discretionary responsibility in the administration of the plan.

Employer Responsibilities

Employer plan sponsors have an obligation to operate their ERISA-covered health and welfare plans in compliance with applicable legal requirements and to oversee plan administration prudently. This includes clearly documenting plan terms and administrative procedures, communicating those terms to participants, and following established procedures in practice. While insurance carriers and vendors play a significant role-particularly for fully-insured plans-the employer retains fiduciary responsibility for oversight of the plan.

One of an employer's most important responsibilities is to conduct due diligence when selecting plan vendors and then to monitor those vendors' actions. Employers must also ensure that vendors are paid only reasonable and necessary fees. Recent laws and regulations-such as the Consolidated Appropriations Act, 2021 (CAA) and the Transparency in Coverage (TiC) rules-have increased the importance of effective vendor oversight. Many of these requirements cannot be satisfied without vendor cooperation. For example, prescription drug data collection (RxDC reporting) and non-quantitative treatment limitation (NQTL) comparative analyses often rely on information held by carriers, TPAs, or PBMs. Although employers may delegate administrative functions to third-party vendors, fiduciary responsibility for selecting and monitoring those vendors remains with the employer as plan sponsor.

As greater pricing, fee, and performance information becomes available to employers and the public, employers may be expected to consider and appropriately respond to that information when making plan decisions. While increased transparency can benefit both employers and participants, it may also heighten fiduciary expectations around monitoring costs, vendor performance, and plan design decisions.

Minimizing Risk of Fiduciary Liability

The following are some steps employers can take to minimize the risk of fiduciary liability:

Governance & Oversight

Create a benefits committee charged with meeting regularly (e.g., quarterly)

Implement written committee procedures and document plan-related decisions

Vendor Selection & Monitoring

Improve the process of selecting and monitoring vendors/service providers

Consider and compare multiple vendors

Include a compliance responsibility analysis as part of the vendor selection process

Review vendor contracts and consider indemnification provisions

Fees & Plan Assets

Ensure that only reasonable and necessary fees are paid for vendor services, taking into account the scope, quality, and value of the services provided

Ensure participant contributions are appropriately collected, timely handled, and used solely for the benefit of plan participants

Compliance & Risk Management

Perform regular compliance assessments (e.g., ERISA, COBRA, HIPAA, ACA, etc.)

Consider purchasing fiduciary liability insurance

Documentation

Maintain written records of committee meetings, vendor evaluations, compliance reviews, and key fiduciary decisions

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Consolidated Appropriations Act, 2026 (CAA 26)

Jarrica Walston — Mon, 20 Apr 2026 18:48:31 +0000

The Consolidated Appropriations Act of 2026 (CAA 26), which was signed by the President on February 3, 2026, reshapes how pharmacy benefit managers (PBMs) will operate in the employer group health plan market. The statute creates new federal transparency, reporting, rebate remittance, and fiduciary compliance requirements across the Public Health Service Act (PHSA), ERISA, and Internal Revenue Code, thereby broadly affecting all group health plans.

The legislation aims to:

Increase transparency into drug pricing, spreads, and rebate flows

Ensure that 100% of drug rebates and remuneration are passed back to plans

Expand fiduciary oversight and enforcement mechanisms

Most provisions take effect for plan years beginning 30 months after enactment (e.g., January 2029 for calendar year plans) and will apply to contracts entered into or renewed after that time. For employers and brokers, these changes may affect PBM contracting, fiduciary oversight, and compliance responsibilities well before the effective date as contracts are reviewed and renegotiated.

Overview of PBM Reporting Requirements

Contract Restrictions - Applicable to All Group Health Plans

A group health plan or carrier (or PBM acting on its behalf) may not enter into or renew a contract with an "applicable entity" (e.g., drug manufacturer, wholesaler, rebate aggregator, affiliated entity) unless that entity agrees to provide necessary information for required PBM reporting without limits or delay.

PBM Reporting - Requirements Vary by Group Size and Funding

The statute establishes PBM reporting obligations applicable to all group health plans, with additional, more detailed requirements for larger plans. PBMs must provide reports to plans semi-annually, or as often as quarterly upon plan request. The reports must be in plain language and machine-readable. All reports must comply with HIPAA privacy requirements and include only summary health information (aggregate and non-identifiable).

Failure to comply with the reporting and disclosure requirements risks potential penalties up to $10,000 per day. Knowingly providing false information risks penalties up to $100,000.

Large Employers/Plans

Large self-funded plans must receive detailed, drug-level (or claims-level) reporting. Large fully-insured plans do not automatically receive detailed reporting, but can opt in annually to receive the same reporting required to be provided to large self-funded plans. For this purpose, a large plan is one that is offered by an employer with 100 or more employees or a plan that has 100 or more participants.

The detailed reporting includes, among other items:

Drug-by-drug compensation paid by the plan to the PBM, PBM compensation paid to pharmacies, and the spread between those amounts

Net drug prices after rebates

Total rebates received (by the plan and PBM)

Participant cost-sharing

Formulary determinations

High-spend drug disclosures

Affiliated pharmacy pricing comparisons

All Plans

In contrast to the detailed reporting required for large plans, all group health plans must receive:

A plan-level summary designed to assist fiduciaries in evaluating PBM compensation and pricing structures.

A separate participant-facing summary containing only aggregate information that must be made available to plan participants upon request.

In addition to the participant-facing summary, plan participants may request their own claim-specific information. Employers will likely rely on their PBM or TPA to supply the necessary data for such requests and should ensure service agreements clearly address responsibility and response timelines.

Group health plans must provide an annual notice to participants regarding PBM reporting obligations and plan participants' right to request the summary reports and claim-specific information.

Rebate Pass-Through Requirements - ERISA Plans

A contract is not reasonable for purposes of compliance with ERISA §408(b)(2) unless 100% of rebates, fees, alternative discounts, and other remuneration tied to drug utilization are remitted to the group health plan (or carrier on behalf of the plan) on a quarterly basis, no later than 90 days after the end of each quarter. Whether the plan may retain the rebate or must share the rebates with plan participants may depend upon plan documentation, level of participant contributions, etc.

The statute also provides the plan with audit rights regarding rebates at least once per plan year, with the auditor selected by the plan fiduciary and not paid, directly or indirectly, by the PBM.

Expanded Compensation Disclosures - ERISA Plans

The Consolidated Appropriations Act of 2021 (CAA) included a requirement that brokers and consultants supplying services to ERISA-covered group health plans provide disclosures to plan fiduciaries where the broker or consultant reasonably expects to receive at least $1,000 in direct or indirect compensation. The disclosure is required to be made "reasonably in advance" of entering into a contract for services and must describe the services to be provided, indicate whether the service provider expects to be a plan fiduciary, and describe all forms of direct and indirect compensation the service provider expects to receive in connection with the arrangement, including the manner in which compensation will be received.

These disclosure requirements have now been clarified/expanded to include PBMs, TPAs, stop-loss insurers, and most other group health plan service providers. The statute does not provide a separate delayed effective date for this provision, so it could be interpreted to apply upon enactment to new or renewed service arrangements entered on a go-forward basis.

Plan fiduciaries must obtain these disclosures, evaluate whether compensation is reasonable, document their assessment, and monitor compliance on an ongoing basis. Failure to request or review required disclosures may create fiduciary risk.

Summary

CAA 26 does not simply increase transparency, it meaningfully shifts leverage to plan sponsors while simultaneously increasing fiduciary accountability. Employers and brokers will need to balance new access to data with heightened expectations around oversight, documentation, and vendor management.

The statute directs the Secretary to issue regulations specifying a standard reporting format and other implementing guidance within 18 months of enactment. Employers should expect further clarification on reporting templates, coordination with existing transparency rules, and operational mechanics.

Note on Recent Proposed Regulations

On January 30, the Department of Labor (DOL) issued proposed PBM compensation disclosure rules. The rules are modeled on the ERISA broker compensation disclosure requirements but are much more detailed and would require extensive compensation reporting and new audit rights for covered plans. These rules would apply only to self-funded ERISA plans and were slated to take effect for plan years beginning after July 2026. There are some significant differences in the proposed rules and the CAA 26 legislation, and it's unclear what the DOL will do with its proposed rules following the passage of CAA 26. The DOL could withdraw or pause its proposed rules, proceed with the ERISA-based requirements on a faster timeline, or reissue revised regulations that more closely align with the statute. Until the DOL clarifies its approach, employers, brokers, and PBMs face uncertainty regarding the scope and timing of future compliance obligations.

If you have questions, please contact your North Risk Partners Risk Advisor. Don't have an advisor? No problem. We'll help you find one.

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First Quarter Benefit News Highlights

Jarrica Walston — Mon, 20 Apr 2026 18:34:22 +0000

This quarter's benefits news highlights key compliance and administration issues that employers should keep on their radar, from updated HIPAA requirements and new privacy notice guidance to rising ACA cost limits and increased enforcement activity. We're also tracking important litigation trends and reporting reminders that could affect plan administration in the months ahead. Read on for timely updates to help you stay informed and prepared.

1. New HIPAA Rule Modernizes Claims Processing

This final rule establishes the first nationwide HIPAA standards for electronically exchanging health care claims attachments such as medical records and clinical data and requires the use of secure electronic signatures for those transactions. It replaces outdated manual processes like faxing and mailing with standardized electronic systems, improving efficiency, speeding claims processing, and enhancing data security across providers and insurers. Overall, the rule modernizes administrative workflows in healthcare and is projected to save the industry roughly $780 million annually while reducing burden and improving care delivery. Compliance, which will be handled primarily by carriers and TPAs on behalf of group health plans, is required by May 26, 2028. Read more here.

2. Changes to USPS Postmark Rules May Impact Benefit Administration

It's not often that postal rules affect employee benefits, but a recent change by the U.S. Postal Service (USPS) could impact certain benefit functions, particularly COBRA. Under the new USPS rules, the postmark reflects the date mail first undergoes automated processing, not necessarily the date it was dropped in the mail. Depending on location and processing timelines, this could occur one or more days after USPS receives the letter.

Many benefit deadlines rely on the "mailbox rule," which treats a document as delivered on the postmark date. That date determines whether submissions such as COBRA elections or premium payments are timely. For example, if a COBRA premium grace period ends March 30 and a participant mails payment that day, they may believe the payment is timely. But if USPS does not process the mail until April 1 or 2, the postmark will reflect that later date. Under the mailbox rule, the payment could be considered late, allowing the employer to terminate coverage for nonpayment. Because many participants mail COBRA forms or payments close to the deadline, this change could increase disputes where participants claim they mailed items on time, but the postmark shows otherwise. It remains to be seen whether courts will adjust the mailbox rule in response. In the meantime, employers may need to decide whether to continue relying strictly on the postmark or to adopt a more flexible approach.

3. ERISA Fiduciary Litigation Update

Recent ERISA litigation developments continue to highlight the growing scrutiny on employer health plan fiduciary practices, particularly related to prescription drug pricing and pharmacy benefit manager (PBM) oversight.

In Navarro v. Wells Fargo, a federal court dismissed claims alleging the company breached fiduciary duties by allowing excessive prescription drug pricing in its health plan. The court found plaintiffs lacked Article III standing because they failed to demonstrate a concrete financial injury. Conversely, Stern v. JPMorgan Chase will move forward after a court allowed claims alleging fiduciaries failed to prudently monitor PBM arrangements and allowed participants to pay inflated prices for generic drugs. Separately, new claims have been filed, reflecting an emerging trend in litigation that is expanding beyond plan sponsors to include benefits consultants and advisors. These cases reinforce the importance for plan fiduciaries to maintain strong governance, actively monitor vendors, and document efforts to meet ERISA's duties of prudence and loyalty.

4. Updated RxDC Instructions

CMS released updated instructions for prescription drug reporting (RxDC reporting) in late February. The instructions don't include any substantive changes. The latest instructions and templates can be found here.

Annual RxDC reporting is required by June 1 of each year. Reporting for 2025 data is due June 1, 2026. The reporting consists of a plan file (P2), eight data files (D1 - D8) and accompanying narratives. Most employer-sponsored health plans rely heavily on their carriers, TPAs, and PBMs to provide the data necessary, and in many cases, to submit the reporting to CMS on behalf of employer group health plans. To complete the reporting, carriers or TPAs may have reached out to employers asking for information about premium splits (employer and employee contributions) as well as other data required for the D1 file. Once this information is provided, the carrier, TPA, and/or PBM may handle the entirety of a group health plan's RxDC reporting. However, for employers who fail to timely respond with the requested data, or if the carrier/TPA is unwilling to help with the D1 file, the employer may have to submit a P2 and D1 file on their own. If assistance is needed with the P2 and D1 files, see Lumelight's solution here.

5. Updated Model Notice of Privacy Practices

The HIPAA Privacy Rule requires health plans and covered health care providers to develop and distribute a notice that provides a clear, user friendly explanation of individuals' rights with respect to their personal health information and the privacy practices of health plans and health care providers. As of February 16, 2026, these HIPAA covered entities are required to include information about specific restrictions on the use and disclosure of substance use disorder (SUD) patient records in their notice of privacy practices (NPP). The new model notice incorporating these changes was released by Health and Human Services (HHS) on February 13, 2026. Plan sponsors of self-funded group health plans should use an updated NPP for all future distributions. Insurance carriers will typically handle distribution of the NPP for fully-insured plans. Read more here.

6. 2027 ACA OOP Maximums

The 2027 maximum out-of-pocket (OOP) limits that may be used for non-grandfathered group health plans under ACA rules. For 2027, the maximum OOP for self-only coverage is $12,000 (currently $10,150 for 2026) and the maximum OOP for family coverage is $24,000 (currently $20,300 for 2026). The guidance can be found here.

7. Updated HIPAA, MSP and SBC Penalties for Non-Compliance

The Department of Health & Human Services (HHS) announced updated penalty amounts for HIPAA, MSP, and SBC violations. The updated penalties can be found here.

For HIPAA privacy and security non-compliance, the updated penalties range from $145 for lack of knowledge to $2,190,294 for willful neglect.

For non-compliance with Medicare Secondary Payer (MSP) rules, including taking into account Medicare eligibility or incenting individuals to waive the employer's plan in favor of Medicare, the updated penalty is $11,823.

For failure to timely distribute a current summary of benefits & coverage (SBC), the updated penalty is $1,443.

8. EBSA 2026 Enforcement Priorities

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) announced its national enforcement priorities for fiscal year 2026, focusing on issues that pose the greatest risk to plan participants and beneficiaries. Specific to health and welfare benefit plans, investigations will prioritize cybersecurity, access to mental health and substance use disorder benefits, surprise medical billing, and handling of employee contributions. EBSA also signaled a continued commitment to addressing abusive Multiple Employer Welfare Arrangements (MEWAs). Read more here.

9. Increased State-Level Mental Health Parity Enforcement

States are increasingly enforcing mental health parity laws and issuing record fines against health insurers for failing to provide mental health and substance use disorder coverage on par with medical/surgical benefits. Regulators have penalized plans like Kaiser Foundation Health Plan of Washington for not supplying adequate documentation or compliance evidence such as a non-quantitative treatment limitation (NQTL) comparative analysis, signaling tougher scrutiny of insurer practices under parity requirements. These actions reflect a broader state-level crackdown to hold insurers accountable for adhering to both state and federal mental health parity standards, aiming to improve access and equity in mental and behavioral health care. For employers offering self-funded health plans, this serves as a reminder that compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA) requires a completed NQTL comparative analysis that must be maintained and made available upon request. See Lumelight's solutions here.

10. Updated HRSA Preventive Coverage Guidelines

Non-grandfathered group health plans must cover preventive services included in the updated HRSA-supported Women's Preventive Services Guidelines without cost-sharing under the ACA. The cervical cancer screening guideline has been revised for plan years beginning in 2027 to reflect current evidence-based recommendations for average-risk women aged 30-65. The guideline retains existing options (Pap tests, co-testing, and primary high-risk HPV testing every five years) and adds a recommendation that patient-collected (self-collected) hrHPV testing should also be covered. It also explicitly states that when additional testing (e.g., cytology, biopsy, extended genotyping) is clinically indicated to complete the screening process, those services are part of the cervical cancer screening guideline and must be covered accordingly. Read more here.

11. OCR Cybersecurity Newsletter

OCR (The Office for Civil Rights), a division HHS (Health & Human Services), released a newsletter further clarifying its focus on cybersecurity of PHI (protected health information). The newsletter underscores that system hardening is a core HIPAA compliance obligation, not merely a best practice. "System hardening" is the process of customizing electronic information systems to reduce the number of weaknesses and vulnerabilities that an attacker can exploit. OCR identifies three methods covered entities and business associates are expected to undertake in the process of system hardening:

Regularly patching known vulnerabilities

Removing or disabling unnecessary software and services

Properly enabling and configuring security controls.

OCR's expectation is that covered entities and business associates engage in regular review, documentation, monitoring and remediation. Read the newsletter here.

12. Marketplace Premium Tax Credits

Since Congress did not pass legislation before the end of 2025 to extend the enhanced premium tax credits, many individuals will face higher Marketplace premiums in 2026. Importantly, a change in the cost of individual health coverage does not trigger a HIPAA special enrollment event. As a result, group health plans are not required to allow mid-year enrollment, meaning affected individuals generally cannot move to an employer's plan until the next open enrollment period, unless the employer and carrier (or stop-loss vendor) choose to permit a more generous special enrollment opportunity.

In addition, federal agencies issued updated FAQs addressing premium tax credits. The guidance clarifies that repayment caps have been removed, which may significantly increase tax liability for individuals who receive excess premium tax credits. This can occur, for example, if an individual is ineligible due to the availability of employer-sponsored coverage or fails to provide accurate or updated household income information when enrolling in Marketplace coverage. The updated FAQs can be found here.

If you have questions, please contact your North Risk Partners Risk Advisor. Don't have an advisor? No problem. We'll help you find one.

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