Division III

Health and Welfare

The five Parts in this Division cover group health and other welfare benefits, together with the employment and tax rules that reach them.

Welfare plans generally. Part 13 covers COBRA continuation coverage, cafeteria plans, HIPAA privacy and security, dependent care assistance, health reimbursement arrangements, retiree medical coverage and Medicare coordination, multiple employer welfare arrangements, and the reforms that apply to self-insured plans.
The Affordable Care Act. Part 14 covers the employer mandate and its penalties, the full-time employee and affordability rules, information reporting on Forms 1094-C and 1095-C, and the ACA market reforms.
Parity, surprise billing, and transparency. Part 15 covers mental health parity and the comparative analyses it requires, the No Surprises Act, and the transparency, reporting, and fee-disclosure rules added by the Consolidated Appropriations Act, 2021.
Leave, military service, and wellness. Part 16 covers what the FMLA and USERRA require of benefit plans, wellness programs under the HIPAA, ADA, and GINA rules, and the protected-status limits on plan design.
Fringe benefits and employment taxes. Part 17 covers the statutory fringe benefit exclusions, whether a fringe or welfare-type arrangement is an ERISA plan, and the payroll taxation and Form W-2 reporting of benefits.

Which entities count as one employer, what the plan document must contain, and the fiduciary, reporting, and claims rules for welfare plans are covered in Division I.

Part 13. COBRA, HIPAA, and Welfare Benefits

This Part covers COBRA, Arizona mini-COBRA, HIPAA, BAAs, §125, FSAs, HSAs, HRAs (including ICHRA, QSEHRA, and excepted-benefit HRA design and administration), DCAPs, welfare Form 5500, MEWAs, and welfare compliance. It also covers retiree medical and Medicare coordination — retiree health vesting after Tackett and Reese, VEBAs and §401(h) accounts (and §420 transfers), Medicare Secondary Payer, Medicare Part D creditable-coverage disclosure, the HSA/Medicare enrollment traps, and the retiree-only plan and ADEA Medicare-coordination interactions.

Part 14. ACA Employer Mandate and Health Reform

This Part covers ALE, §4980H, Forms 1094-C/1095-C, Letter 226-J, ICHRAs, affordability, minimum value, ACA market reforms, the full-time determination mechanics (hours of service, measurement methods, variable-hour and seasonal employees, breaks and rehires), and ACA §1557 nondiscrimination.

Part 15. Health Plan Parity, CAA, and Transparency

This Part covers MHPAEA parity and NQTL comparative analyses (including the 2024 final rule's nonenforcement posture), the No Surprises Act and federal IDR (QPA, TMA litigation, the 2026 IDR operations rule), gag-clause attestations (GCPCA), RxDC reporting, Transparency in Coverage machine-readable files and the price-comparison tool, provider directories and the other CAA patient protections, ERISA §408(b)(2)(B) covered-service-provider compensation disclosure (brokers and consultants, and since the Consolidated Appropriations Act, 2026 also PBMs, TPAs, and other listed service providers), the CAA 2026 PBM provisions (ERISA §726/Code §9826 PBM reporting to plans, the §502(c)(13) penalties, and the §408(b)(2)(C) rebate pass-through), and health-plan fee fiduciary litigation and governance.

Part 16. FMLA, USERRA, and Wellness Programs

This Part applies whenever a leave of absence, a protected status, or a wellness program reaches a benefit plan: FMLA group health maintenance under 29 C.F.R. §825.209, the premium-payment arrangements and the 15-day mailed notice that must precede any lapse, the narrow §825.213 right to recover the employer's premium share, and the §825.215(d)(4) pension rule (FMLA preserves service, it does not credit it — with the last-day-condition trap); the state paid-family-leave substitution question under Opinion Letter FMLA2025-01-A; USERRA reemployment, the §4316(a) escalator and the §4316(b) paid-military-leave and benefit-accrual litigation, §4318 pension crediting and the employer's funding liability and make-up window, the Code §414(u) qualification mirror and its loan-suspension rule, the HEART Act items (differential wage payments, the mandatory §401(a)(37) death benefit, qualified reservist distributions), and §4317 health continuation; wellness program design across the HIPAA/ACA nondiscrimination rules, the ADA, and GINA, including the fact that no ADA or GINA numerical incentive limit currently exists (GINA still bars any inducement for providing genetic information itself, 29 C.F.R. §1635.8(b)(2)(ii)); and the residual protected-status overlays — the ADEA equal cost or equal benefit rule, disability-based plan distinctions, pregnancy comparability, and ERISA §510.

Part 17. Fringe Benefits and Employment Taxation

This Part covers the Code's income-exclusion fringe benefit provisions — §132 (the principal categories, including commuter/transportation benefits, the suspended-and-now-permanently-unavailable-to-most-civilians moving expense exclusion (intelligence-community employees and new appointees excepted for taxable years beginning after 2025), and the §132(j)(1) nondiscrimination overlay that reaches only two of the categories), §127 (educational assistance and the now-permanent student loan repayment feature), §137 (adoption assistance), §79 (group-term life insurance, Table I imputed income, and the §79(d) key-employee nondiscrimination trap), and §128 (Trump Account employer contribution programs, moved here in full from Part 13 (COBRA, HIPAA, and Welfare Benefits)) — together with the threshold ERISA plan-status analysis for disability, life, AD&D, severance, EAPs, and voluntary benefits (the payroll practice exclusion at 29 C.F.R. §2510.3-1(b), the voluntary/group-type insurance safe harbor at 29 C.F.R. §2510.3-1(j), and the Fort Halifax ongoing-administrative-scheme test for severance), and payroll taxation and Form W-2 reporting mechanics (FICA/FUTA treatment, third-party sick pay, severance wage classification under Quality Stores, and Box 12 codes).