The lawsuits and rulings that decide what employers who sponsor health plans must do.
Courts decide what ERISA, the ACA and the parity laws actually require. Here are the major health and welfare rulings from 2025 and 2026, what each one decided, and what it means for how a plan is run. This is general information, not legal advice.
Six themes run through the current cases.
Most of the activity is aimed at self-funded plans and the employers that sponsor them, and much of it turns on a question that has little to do with benefits: whether the plaintiff has standing to sue.
Prescription Drug Fiduciary Suits
Participants at large employers allege their plan fiduciaries overpaid for drugs through the pharmacy benefit manager. Recent decisions in New Jersey, Minnesota and New York have mostly gone the employers’ way.
Tobacco Surcharge Suits
A wave of class actions challenges premium surcharges on tobacco users, arguing the reasonable alternative standard was not properly offered or notified.
Preventive Care Challenges
The Supreme Court upheld the ACA rule requiring no-cost preventive services, but left open challenges to later parts of the process.
Mental Health Parity
The 2024 parity rule is tied up in litigation and not being enforced, while the statute and the older regulations still apply.
Standing Is the Battleground
Several suits were dismissed because participants could not show a concrete injury from fiduciary decisions about drug pricing. Appeals may follow.
Agencies Get Less Deference
After Loper Bright, courts are reading the statutes independently rather than deferring to agency regulations, which is changing how wellness program claims are decided.
Four decisions every plan sponsor should know.
Each of these is a trial court ruling except the Supreme Court decision. A trial court ruling can be appealed and does not bind other courts.
Kennedy v. Braidwood (2025)
On June 27, 2025, the Supreme Court held 6 to 3 that the ACA requirement to cover Task Force-recommended preventive services at no cost is constitutional. The HHS Secretary can remove Task Force members at will and review their recommendations.
Navarro v. Wells Fargo (2026)
In March 2026 a Minnesota federal court dismissed a second complaint alleging a mismanaged pharmacy benefit contract. The court found no standing, because plan contributions fund overall plan costs and participants received the benefits the plan promised.
Lewandowski v. Johnson & Johnson (2025)
On November 26, 2025, a New Jersey federal court dismissed a second complaint over the plans’ prescription drug program for lack of standing. The plaintiffs declined to amend and reserved the right to appeal.
Stern v. JPMorgan Chase (2026)
On March 9, 2026, a New York federal court dismissed fiduciary-breach claims, calling PBM pricing and formulary choices plan design decisions. It let prohibited transaction claims proceed, based on out-of-pocket drug overpayments.
The cases in date order.
Dates are from the published analyses of each decision. Check the docket for the current status of any case.
January 17, 2025
The ERISA Industry Committee sues over the 2024 mental health parity rule in federal court in Washington, D.C. (No. 1:25-cv-00136).
March 13, 2025
Employees file Stern v. JPMorgan Chase in New York federal court, alleging mismanagement of the plan’s prescription drug benefit.
March 24, 2025
The Minnesota court dismisses the first Navarro v. Wells Fargo complaint for speculative causation. The plaintiffs amend.
May 15, 2025
The agencies announce they will not enforce the 2024 parity rule while the litigation continues. The court had paused the case on May 13.
June 27, 2025
The Supreme Court decides Kennedy v. Braidwood, 6 to 3, upholding the ACA preventive services requirement.
November 26, 2025
The New Jersey court dismisses the second Lewandowski v. Johnson & Johnson complaint. On December 18 the plaintiffs say they will not amend.
March 2026 (Navarro)
The Minnesota court dismisses the amended Wells Fargo complaint for lack of standing.
March 9, 2026 (Stern)
The New York court dismisses the JPMorgan fiduciary-breach claims but lets the prohibited transaction claims proceed.
July 22, 2026
Courts in Minnesota and New Jersey dismiss the Target and Campbell Soup tobacco surcharge class actions.
Six questions to put to your carrier or administrator.
You do not need to wait for a lawsuit to ask them. The answers belong in your plan file.
How Is Our Drug Pricing Structured?
Ask whether pricing is pass-through or spread, how specialty drugs are classified, and where the plan’s money goes between the pharmacy and the PBM.
Where Do Rebates Go?
Ask who keeps rebates, whether they are passed to the plan, and how you can verify that against the claims.
Do We Have Audit Rights?
Ask whether the contract lets the plan audit claims and fees, how often, and who bears the cost. A pharmacy claims audit starts here.
How Are Preventive Updates Applied?
Ask how new and revised preventive care recommendations flow into your plan, and when members will see the change.
Can We See the Parity Analysis?
Ask for the comparative analysis of non-quantitative treatment limits for the plan, and when it was last updated.
What Do Our Surcharge Notices Say?
If you charge tobacco users more, ask to see the notice, the reasonable alternative standard and the written terms for a refund after joining a program.
Tobacco surcharges and mental health parity.
Two more areas where the law is moving, one through new decisions and one through a pause on enforcement.
Williams v. Target (2026)
On July 22, 2026, a Minnesota federal court dismissed claims that a tobacco surcharge violated ERISA’s nondiscrimination rules. It found no standing on the self-dealing claim and held that ERISA does not require a physician-accommodation notice.
Spencer v. Campbell Soup (2026)
Also on July 22, 2026, a New Jersey federal court dismissed a tobacco surcharge case on standing and merits grounds, and held the “full reward” requirement does not mandate retroactive reimbursement of surcharges already paid.
Parity Rule on Pause
The ERISA Industry Committee sued in January 2025 to challenge the 2024 parity rule. On May 15, 2025, the agencies said they will not enforce it while the case is pending, plus 18 months. The statute and the 2013 regulations remain in effect.
Six practical steps these cases point to.
Winning on standing does not make the underlying decisions good ones. The best defense is a record showing the plan was run prudently.
Document the Drug Plan Review
Keep a record of how the pharmacy benefit was evaluated: the contract terms, pass-through versus spread pricing, rebate treatment and the market check. A PBM review and a pharmacy claims audit supply that evidence.
Meet and Record Fiduciary Reviews
Hold regular plan reviews with minutes. Courts look at process, and a record showing who reviewed which fees and when is the strongest evidence of prudence.
Audit Any Tobacco Surcharge
Confirm the plan documents and enrollment materials describe a reasonable alternative standard, and that the surcharge terms, including any refund after enrolling in a program, are written down.
Confirm Preventive Coverage With the Carrier
The Braidwood ruling keeps the requirement, but the recommendations can change. Ask your carrier or administrator how it applies new and revised recommendations.
Keep Parity Analyses Current
The statute still applies even though the 2024 rule is paused. Ask your carrier or administrator about the comparative analysis for non-quantitative treatment limits.
Involve Counsel on Real Disputes
If a claim, demand letter or agency inquiry arrives, bring in your ERISA counsel early. We help keep you ERISA compliant, and we coordinate with your advisers.
Dismissals are not a green light.
These rulings favor employers today, but each one is a district court decision and the law is still moving.
Standing Wins Can Be Appealed
The Johnson & Johnson plaintiffs reserved the right to appeal. An appellate court could read standing differently for self-funded health plans.
A Narrower Claim Survived
The JPMorgan ruling shows the route plaintiffs may take: prohibited transaction claims tied to participants’ own out-of-pocket drug overpayments rather than premium theories.
Courts Read the Statute Themselves
In the tobacco cases, both courts applied independent judgment instead of deferring to the Department of Labor’s 2013 regulations. That can cut either way for plan sponsors.
The questions employers ask about benefits litigation.
Six short answers. This is general information, not tax advice.
Are Employers Liable for Drug Pricing?
It is being litigated. Courts in New Jersey and Minnesota dismissed cases for lack of standing and a New York court dismissed fiduciary claims, but one set of prohibited transaction claims there is still proceeding. The question is not settled.
Does Braidwood Change Our Preventive Coverage?
Not directly. The Court upheld the requirement. Because the Secretary can remove members and review recommendations, the list of covered services can change, so confirm how your carrier applies updates.
Can We Keep a Tobacco Surcharge?
Wellness program rules permit one when a reasonable alternative standard is offered. Litigation is active, and two July 2026 decisions went the employer’s way, but other cases are still pending. Review the program with counsel.
Is Mental Health Parity Being Enforced?
The agencies will not enforce the 2024 final rule while the litigation continues, plus an additional 18 months. The parity statute, as amended in 2021, and the 2013 regulations remain in effect.
Are These Decisions Binding Everywhere?
No. Trial court decisions bind only the parties and persuade other courts. Only the Supreme Court’s Braidwood decision applies nationwide. Check the current status before relying on any of them.
Can You Help With a Plan Review?
Yes. We help keep you ERISA compliant, and we can run pharmacy and claims audits and manage a PBM request for proposals. Send us your plan details and we will tell you where you stand.
What Is Standing?
Standing is a plaintiff’s right to bring a case. It requires a concrete injury caused by the defendant that the court can fix. Many of these suits fail there because participants still received the benefits the plan promised.
What Is a Prohibited Transaction?
ERISA Section 406 bars certain dealings between a plan and a party in interest, such as a service provider, unless an exemption applies. The JPMorgan claims allege the plan paid its pharmacy benefit manager unreasonable compensation.
What Is a Settlor Decision?
A settlor decision is a plan design choice the employer makes as the plan’s creator, such as which benefits to offer. The JPMorgan court treated pharmacy pricing models and formulary choices that way, so they were not fiduciary acts.
Where the rulings and rules come from.
The summaries below come from published analyses of each decision, plus the statutes. Confirm current status on the docket before relying on any case.
KFF on Kennedy v. Braidwood
The Supreme Court upheld ACA preventive services, with open questions.
Trucker Huss on Lewandowski
The Johnson & Johnson dismissals and the plaintiffs’ decision not to amend.
Holland & Knight on Tobacco Surcharge Rulings
Williams v. Target and Spencer v. Campbell Soup, July 22, 2026.
DOL Statement on MHPAEA Enforcement
The May 15, 2025 notice that the 2024 parity rule will not be enforced.
Crowell on the Parity Pause
The ERIC lawsuit, No. 1:25-cv-00136 (D.D.C.), and the abeyance order.
29 U.S.C. 1106
ERISA prohibited transactions between a plan and parties in interest.
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