Departments Extend the Exercise of Enforcement Discretion Regarding No Surprises Act QPAs

On July 30, 2025, the U.S. Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments), along with the Office of Personnel Management (OPM), issued "Frequently Asked Questions (FAQs) about Consolidated Appropriations Act, 2021 and Affordable Care Act Implementation Part 71" (FAQs Part 71) addressing compliance with No Surprises Act (NSA) qualifying payment amount (QPA) provisions. Part 71 discusses how plans and issuers should calculate a QPA for purposes of patient cost sharing, disclosures with an initial payment or notice of denial of payment, and disclosures and submissions required under the Independent Dispute Resolution (IDR) process. It also addresses limitations on cost-sharing under the Affordable Care Act (ACA). 

The last guidance on NSA QPAs, FAQs Part 69, was issued by the Departments on January 14, 2025. We previously wrote here about how Part 69 addressed outstanding questions on calculating QPAs under the NSA, complying with the disclosure and IDR provisions of the NSA regulations, and determining the scope of the gag clause prohibition. 

Also as previously discussed, there has been protracted litigation over regulations and guidance issued by the Departments to implement the NSA. In October 2024, in Texas Medical Association v. U.S. Department of Health and Human Services, 120 F.4th 494 (5th Cir. 2024) (TMA III), the Fifth Circuit reversed a lower court's vacatur of regulations setting out the methodology for calculating QPAs as set forth in July 2021 interim final rules issued by the Departments and OPM, as well as previously issued sections of NSA FAQs.  

Given the uncertainty around TMA III, the Departments state in Part 69 that plans and issuers are expected "to calculate QPAs using a good faith, reasonable interpretation of the applicable statutes and regulations that remain in effect following the decisions of both the Fifth Circuit and the district court in TMA III (the 2024 methodology)" as soon as the Fifth Circuit's mandate is issued. Additionally, acknowledging the burdens associated with shifting methodologies, the Departments extended the enforcement relief provided in previous FAQs for plans and issuers that use either the 2021 or 2023 methodologies to calculate QPAs for services provided before August 1, 2025.  

In May 2025, the Fifth Circuit in TMA III granted the plaintiffs' petition for rehearing en banc. See Case No. 23-40605 (5th Cir., May 30, 2025). The recently issued Part 71 confirms that given that the Fifth Circuit's mandate has not yet issued and the pending rehearing en banc, plans and issuers "must calculate QPAs using a good faith, reasonable interpretation of the 2023 methodology" for calculating QPAs in accordance with the district court's holding in TMA III. Part 71 also states, similar to Part 69, that given "the impact of the Fifth Circuit's May 30, 2025 order on QPAs and the continued challenges for plans and issuers associated with recalculating QPAs under changing methodologies," the Departments and OPM "have extended the exercise of enforcement discretion... for any plan or issuer, or party to [an IDR payment dispute], that uses a QPA calculated in accordance with the 2021 methodology, for items and services furnished before February 1, 2026...." The Departments make clear that "[t]his exercise of enforcement discretion with respect to the 2021 methodology applies to QPAs for purposes of patient cost sharing, providing required disclosures with an initial payment or notice of denial of payment, and providing required disclosures and submissions under the Federal IDR process." Part 71 also states that "HHS will similarly exercise enforcement discretion under the relevant [NSA] provisions for a provider, facility, or provider of air ambulance services that bills, or holds liable, a participant, beneficiary, or enrollee for a cost-sharing amount based on a QPA calculated in accordance with the 2021 methodology, for items and services furnished before February 1, 2026." Lastly, Part 71 notes that "[o]nce the Fifth Circuit's en banc decision in TMA III is released, the Departments and OPM will evaluate whether it is necessary to provide additional enforcement relief," but that the Departments and OPM "do not currently expect any such additional enforcement relief would extend beyond August 1, 2026... but will reassess the status of QPA recalculations and provide additional guidance as appropriate."

Part 71 also states that the maximum annual limitation on cost-sharing under the ACA for plan year 2026 will be $10,600 for self-only coverage and $21,200 for other than self-only coverage. Further, the premium adjustment percentage for plan year 2026 will be 1.6726771319.

Recent Trend of ERISA Forfeitures Litigation Dismissals Continues with Siemens

On July 31, 2025, the court in Cain v. Siemens Corp., No. 2:24-cv-08730 (D.N.J.) granted dismissal of an ERISA forfeitures lawsuit filed against Siemens Corp. in August 2024. In the purported class action lawsuit — which the plaintiff amended in November 2024 following the filing of Siemens' first motion to dismiss — the plaintiff alleged that Siemens violated the ERISA by (1) breaching the fiduciary duty of loyalty, (2) breaching the fiduciary duty of prudence, and (3) self-dealing (prohibited transaction). The plaintiff alleged that these violations occurred because Siemens "consistently used [f]orfeitures solely to reduce its contributions to the Plan." The plaintiff argued that the plan's forfeitures should have instead been used to pay the plan's administrative costs to reduce the monthly charge incurred by the plan's participants.

In response to the plaintiff's amended complaint, Siemens filed a motion to dismiss for lack of standing and failure to state a claim. With respect to standing, the court sided with the plaintiff and rejected Siemens' argument that the plaintiff had not sufficiently alleged an injury in fact. The court found that the plaintiff's allegation that "he suffered an economic injury because he had to pay additional administrative expenses out of his [plan] account" was sufficient to allege "an economic injury attributable to Defendant's conduct." The court reasoned that the plaintiff's requested relief — an order requiring the defendants to restore to participant accounts the forfeitures it used to offset employer contributions instead of to pay administrative costs — would provide the necessary economic relief to establish standing.

Although the court found the plaintiff had standing to bring his claims, it determined those claims should be dismissed for failure to state a claim. Siemens raised two arguments in response to the plaintiff's breach of fiduciary duty claims: (1) it was not acting in a fiduciary capacity when reallocating forfeitures; and (2) if it was acting as a fiduciary, it did not breach any fiduciary duty in the reallocation of the forfeitures. The court rejected Siemens' argument that it was not a fiduciary, stating that employer contributions made into the plan "become [p]lan assets and remain so even if they are forfeited by an employee." The court reasoned that because forfeitures are plan assets, the defendant's "reallocation of [f]orfeitures is therefore a fiduciary act." 

The court did agree with Siemens' second argument that its reallocation of the forfeitures to reduce employer contributions, which was done in accordance with the plan's documents, was not a breach of fiduciary duty. The court noted the recent decisions by various courts across the country also reaching the conclusion that there is no requirement under ERISA that forfeitures must be used toward administrative fees for participants. The court reasoned that ERISA "does not mandate what benefits an employer must provide under a plan and does no more than protect the benefits which are due to an employee under a plan." The court further stated that to accept the plaintiff's theory "would use the fiduciary duties of loyalty and prudence to create a new benefit to participants that is not provided in the plan document itself." 

The court also dismissed the plaintiff's self-dealing (prohibited transaction) claim, holding that the plaintiff failed to identify a prohibited transaction and that even if he was not required to identify one, he "failed to plausibly allege a self-dealing claim." 

The court dismissed the plaintiff's claims without prejudice, thereby allowing the plaintiff an opportunity to cure the defects in his complaint. The plaintiff has 30 days to file an amended complaint to address the deficiencies identified in the court's opinion. 

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