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Background

In final rules issued by the DOL, HHS and the IRS this past summer, beginning in 2025, hospital indemnity and other fixed indemnity plans were required to include a new notice in any application, enrollment and marketing materials. IMA wrote about the requirement here.

What’s New

This notice requirement was challenged by several insurance companies as not being authorized by law, and on December 4th, a district court judge agreed with those companies and struck down the new notice requirement. While the government could still appeal this ruling, it seems unlikely they will do so given the incoming Trump administration. Further, even if they did, the new administration could halt the appeal. This means that, for now, the notice requirement is not enforceable.

Summary

Employers and insurers are no longer required to comply with the hospital indemnity and other similar fixed indemnity notice requirement. The notice was intended to clarify to consumers that these plans are not comprehensive medical insurance, and with that intention in mind, some employers may wish to continue to provide the notice.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.

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