Compliance Monthly Update
November 2025
A brief update on what happened the prior month in group health plan compliance at the federal level, organized chronologically. An update for the state and local level are further down. If you would like additional information, please reach out to the GBS Compliance Team.
Federal Compliance Update
Annual PCORI fee adjustment announced.
IRS Notice 2025-61 was released on November 3 with the annual increase in the Patient-Centered Outcomes Research Institute (PCORI) fee that must be paid by health insurers and self-insured health plan sponsors. PCORI fees were established by the ACA and are used to support clinical effectiveness research. The adjusted applicable dollar amount for PCORI fees for plan years ending on or after October 1, 2025, and before October 1, 2026, is $3.84. This is a $0.37 increase from the $3.47 amount in effect for plan years that ended on or after October 1, 2024, and before October 1, 2025. PCORI fees are calculated by multiplying the applicable dollar amount for the year by the plan’s average number of covered lives. And the fees are reported annually on the second quarter IRS Form 720 no later than July 31 of the calendar year immediately following the last day of the plan year to which the fee applies.
Court vacates gender-identity discrimination portion of ACA Section 1557 rule.
A federal trial court has vacated certain portions of regulations under ACA Section 1557 to the extent that they expanded the definition of sex discrimination to include gender-identity discrimination. As a reminder, ACA Section 1557 prohibits discrimination in certain health programs and activities on the basis of race, color, national origin, sex, age, or disability. In 2024, HHS issued regulations to provide that “discrimination on the basis of sex” specifically includes discrimination based on sexual orientation, gender identity, sex characteristics, pregnancy, and sex stereotypes. This federal trial court had previously issued a nationwide injunction on the gender-identity discrimination provision of the 2024 rule, and the court has now ruled that the gender-indemnity provision of the rule did in fact exceed HHS’s statutory authority and has universally vacated that provision. The court explained that the challenged provisions required providers to offer “gender-affirming” care (such as mastectomies for gender dysphoria) if they would provide similar care for other diagnoses (such as breast cancer). The court relied on the U.S. Supreme Court’s Skrmetti decision that an individual’s medical diagnosis (rather than their sex) is the but-for cause of the health care denial, so the court concluded that the refusal to provide “gender-affirming” care is not sex discrimination.
Most-favored-nation prescription drug pricing agreements announced for GLP-1 drugs.
On November 6, the Trump administration issued a fact sheet and announced that two leading drug manufacturers (Eli Lilly and Novo Nordisk) have agreed to offer their GLP-1 weight loss drugs at most-favored nation (MFN) discounted pricing through TrumpRx.gov (a government website that redirects users to purchase medications directly from the manufacturer). As a reminder, the goal of the MFN pricing policy is that U.S. consumers will pay no more than the lowest prices charged in other developed nations. Under this new agreement:
- The prices of Ozempic and Wegovy from Novo Nordisk will decline from $1,000 and $1,350 per month, respectively, to $350 when purchased through TrumpRx.
- If the FDA approves the Wegovy pill or certain similar GLP-1 drugs in each company’s pipeline intended to be taken orally rather than as a shot, the initial dose will be priced at $150 per month through TrumpRx.
- The price of Eli Lilly’s Zepbound and Orforglipron (if approved) will fall from $1,086 per month to an average of $346 when purchased through TrumpRx.
- The Medicare prices of Ozempic, Wegovy, Mounjaro, and Zepbound will be $245. (Medicare beneficiaries will pay a co-pay of $50 per month.) State Medicaid programs will have access to the same prices. These prices will enable Medicare to cover Wegovy and Zepbound for patients with obesity and related comorbidities for the first time.
- The agreement also provides that Eli Lilly and Novo Nordisk will guarantee MFN prices on all new medicines that they bring to market, repatriate increased foreign revenue on existing products, and provide every State Medicaid program in the country access to MFN drug prices on their products.
State/Local Compliance Update
A brief update on what happened the prior month in group health plan compliance at the state and local level, listed alphabetically. If you would like additional information, please reach out to the GBS Compliance Team.
Minnesota
Minnesota’s paid leave law takes effect January 1, 2026.
In 2023, Minnesota created a Paid Family and Medical Leave (PFML) program that is now set to take effect on January 1, 2026. Under the PFML program, eligible employees may take: (a) up to 12 weeks of paid medical leave for their own serious health condition; (b) up to 12 weeks of paid family leave for family care, such as bonding with a new child, caring for a family member with a serious health condition, certain military exigencies, and safety leave for issues related to domestic violence; and (c) a maximum of 20 weeks of combined leave per benefit year.
- Premium. Employers must cover a minimum of 50% of the premium and may deduct the remainder of the premium from employee pay. For 2026, the premium rate is 0.88% of an employee’s taxable wages. The rate is set annually and cannot exceed 1.2% of an employee’s taxable wages. So, for 2026, employers are responsible for at least 0.44% (i.e., 50% of the premium), and employees will pay anywhere between 0.00 and 0.44% of the premium, so long as the deduction does not reduce an employee’s pay below minimum wage.
- Reporting. All employers are required to report wage details for their employees using the same online reporting system as unemployment insurance (UI). The first premium payments are due on April 30, 2026, based on wage details reported between January 1, 2026, and March 31, 2026. For organizations with employees who are not covered by the UI program, employers must set up a Paid Leave Only account through the UI website.
- Notices. Employers must display PFML program workplace posters in English and any other language spoken by five or more employees or independent contractors. Additionally, employers must provide individual notice of the paid leave program to employees in their primary language—including the employer-determined premium allocations. The notice can be delivered through a physical read-and-sign copy or virtually via a payroll system. Employers must obtain signed written or electronic acknowledgment of receipt from employees.
- Private plan. Employers with existing paid leave benefits have the opportunity to apply for approval to use a private plan in lieu of the state program—provided the private plan benefits are equivalent or better.
Texas
Texas extends special enrollment periods for newborns.
Governor Abbott signed SB 896 that will extend the coverage and special enrollment periods for newborn children. The law applies to fully insured plans issued or renewed in Texas on or after January 1, 2026. Prior to this change, fully insured plans issued in Texas provided a period of 31 days in which a newborn child of a covered employee was automatically provided coverage by the group health plan. And covered employees had a period of 31 days to request special enrollment of the child (to avoid a lapse in coverage after the initial 31-day automatic coverage period). Remember also that under federal law, HIPAA requires group health plans to offer a special enrollment opportunity to newly acquired dependents of employees in the event of birth, adoption, or placement for adoption. Pursuant to this HIPAA special enrollment rule, the employee must be permitted a period of at least 30 days after the date of the birth, adoption, or placement for adoption to enroll the child. Under this new law, beginning in 2026, Texas fully insured policies must provide an enrollment window of at least 60 days for a newborn, and automatic coverage for the newborn will continue until the 61st day after birth (unless the employee timely elects special enrollment and pays the required premium if they wish coverage for the newborn to continue after this 61st day). Note that this rule does not extend to children who are adopted or placed for adoption (in which case, the normal HIPAA special enrollment period of 30 days will still apply). This rule also does not extend to employees who are not already “covered employees” (though HIPAA still provides special enrollment rights to the employee, spouse, and new dependent in this circumstance, even if they are not enrolled in the plan at the time of the birth).
