JJ Conway
J.J. Conway Law
J.J. Conway Law
For the last twenty-five years, my legal practice has been devoted to bringing lawsuits against employers and employee benefit administrators who failed to provide my clients with the benefits they had rightly earned.
There is an elegant simplicity to this aspect of employment law because benefit plans work like contracts. Like a contract, an employee’s consideration is providing work for the employer. In return, the employer pays for that work, in part through non-wage compensation such as healthcare, life insurance, retirement benefits, and disability insurance. The value of these benefits to an employee and the employee’s family has been steadily growing each year.
Litigating these disputes has led to my forming a few biases. Forgive me, but I do not have the greatest regard for human resource departments, and there are a few insurance companies that I believe are actually bad actors, not just opponents.
But lately, I have come to empathize with my would-be adversaries . . . at least a little bit.
The world of employee benefits — or should I say this new world of benefits — is becoming increasingly complex. It is fraught with new employee expectations, and there seems to be legal peril everywhere for employers and plan managers. Just recently, the Department of Labor (which has been beset by scandals and resignations) issued its revised enforcement priorities, which, if relied upon, may result in legal troubles down the road should a new administration come into power with different priorities. Today’s relief from regulatory enforcement could be tomorrow’s class action lawsuit. Benefit participants, in contrast, must tailor their cases to meet the moment, but benefit plans have a decades-long horizon.
In an employee-side litigation practice, the legal process is straightforward. An employee has a benefit plan problem. The first attempt to solve the problem is by filing a claim for benefits. If that fails, there is an internal appeal with the plan. If the problem remains unsolved, then a lawsuit is filed. Benefit litigators review existing precedents, outline their legal cases, and work to see that their clients prevail.
In the old days, employee benefit plans only had to monitor themselves for compliance with basic Department of Labor regulations and to be mindful of unique rules in insurance and banking that applied in states where a company operated. Most plans would receive regular updates on significant developments in case law across the U.S. It was all a bit sleepy and rote.
In 2010, that started to change, led by the massive federal law requiring that healthcare plans be brought in line with the Patient Protection and Affordable Healthcare Act (“Obamacare”). That was a huge change; so huge, in fact, that the law itself contained a built-in mechanism giving plans years to adjust the implementation deadlines. Then, the regulatory authorities repeatedly extended those deadlines even further.
Prior to this, federal regulations for employee benefit plans had been amended only a handful of times since 1975. After Obamacare, the applicable regulations and USDOL bulletins began changing with great regularity.
Before and after the law was passed, the Tea Party erupted with intense criticism over the law, and in turn there were hundreds of attempts to change the law, eliminate it, or repeal its most controversial provisions through litigation. Obamacare today looks nothing like it did fifteen years ago.
This sudden charged approach to what was, essentially, an employee benefits law, has led to increased plan litigation and other challenges as when the federal government tried to impose a fiduciary standard on financial advisors across all plans and into individual investors. This fiduciary duty rule has changed so many times that it is hard to keep up. It was recently struck down again by a federal court.
Since 2025, the pace of proposed laws affecting employee benefit plans has been on fire. Plans are suddenly being forced to grapple with some really “out there” issues.
Consider what today’s benefit plans must now address:
1. New, unusual, and unproven medical treatments and requests for coverage based on influencers, streamers and politics. Podcasters and the current HHS Secretary regularly provide medical advice to the public in a way that is new, untested, and complicated. Suddenly, employee benefit participants are hearing about how injecting peptides can help them live longer, lose weight, and look better. Participants are being told not to vaccinate or to vaccinate themselves and their families differently.
(Recently, the U.S. military ruled that mandatory flu vaccinations for active-duty personnel are considered “woke” and would be discontinued.) Proven cancer drugs that may have been covered by health insurance are suddenly being labeled “investigative” by the FDA. With plan participants being told to eat saturated fats, lard, heavy meat diets, and to stop eating plant-based foods and getting vaccinated, it remains to be seen what will happen for cardiac, cancer, rheumatology, and infectious disease costs over time for those plans. Plans have to keep up with this, and if all this medical advice turns out to be wrong, there will be additional pressure put on health insurers and self-funded healthcare plans to clean up the medical mess.
2. Expensive life-changing drugs are coming to market, and their arability is certain to increase rapidly with AI technology. Today, there are potentially lifesaving and life altering genetic therapies that are being developed by doctors and scientists, but they are funded privately and access to the drugs are at the cost of millions of dollars per treatment. “60 Minutes” recently chronicled the rapid and remarkable development of life-saving gene therapies that cost millions per dosage. The takeaway from the lengthy report was that benefit plans have no idea how to deal with this and definitely have not established sufficient cost reserves.
3. Political backlash surrounding medical treatments and coverage. The backlash against DEI programs generally, and certain medical treatments specifically, has led to complexities in the medical treatment offerings for the LGBTQ community. This is a completely different environment than two years ago. Moreover, the DEI fights have led to massive cuts in medical research grants to American universities. So, now healthcare innovations are being outsourced to financial investment firms or the private credit markets for development on their timetables, not in our universities using grant money. Again, how do benefit plans forecast healthcare claims over the next 20 years and will there be a backsliding in medical treatment options which, again, promises to increase care costs?
4. Political backlash surrounding the climate and retirement plan investments. States like Florida have required their retirement benefit plans to divest in investments that are marketed to help the environment and to redirect those funds to other investments, including fossil fuels. Florida actually passed a law that prohibits any type of investment that has as an objective the improvement of environment or climate. In our current political state, this may serve as a template for aggrieved plan members who object to similar investments by their own retirement plans and wish to litigate these issues.
5. Your home is now your 401k. In the retirement realm, plan administrators may have to develop rules allowing people to put their homes into their 401(k) plans. This will require harmonizing contribution limits with lending laws and reconciling ERISA’s prohibition on collection activity against a retirement plan with legal documents such as mortgages and home refinancing.
6. Alternative investments in 401k plans. Also in the retirement plan realm, there is a push to open 401(k) plans to cryptocurrencies, hedge funds, and other alternative investments. The proposed regulation is more than 150 pages, single-spaced, and with all sorts of scenarios that add to the confusion surrounding the rules.
7. The use of AI in administrative services contract administration for benefit plans. This is a small headache now, which promises to become a migraine soon, if it is not figured out. It is clear that many large insurers are experimenting with AI to cut down on labor costs, but it is unclear whether that complies with ERISA’s fiduciary standard. AI generated claims management reveals itself when a claim is paid and the Explanation of Benefits forms continue to show the claim as denied. Ultimately, these types of problems find their way back to the company.
This is a whole lot of change in a relatively short period. Plan designers have to keep up in a fast-changing world and plan administrators have to carefully monitor what is happening across the country. But empathy only goes so far. Not to worry, ERISA litigators will be there, too, watching closely to see how the plans navigate these changes.
John Joseph (J.J.) Conway founder of Michigan-based J.J. Conway Law, is a national employee benefits and ERISA attorney and litigator representing clients in individual cases and class action lawsuits.
There is an elegant simplicity to this aspect of employment law because benefit plans work like contracts. Like a contract, an employee’s consideration is providing work for the employer. In return, the employer pays for that work, in part through non-wage compensation such as healthcare, life insurance, retirement benefits, and disability insurance. The value of these benefits to an employee and the employee’s family has been steadily growing each year.
Litigating these disputes has led to my forming a few biases. Forgive me, but I do not have the greatest regard for human resource departments, and there are a few insurance companies that I believe are actually bad actors, not just opponents.
But lately, I have come to empathize with my would-be adversaries . . . at least a little bit.
The world of employee benefits — or should I say this new world of benefits — is becoming increasingly complex. It is fraught with new employee expectations, and there seems to be legal peril everywhere for employers and plan managers. Just recently, the Department of Labor (which has been beset by scandals and resignations) issued its revised enforcement priorities, which, if relied upon, may result in legal troubles down the road should a new administration come into power with different priorities. Today’s relief from regulatory enforcement could be tomorrow’s class action lawsuit. Benefit participants, in contrast, must tailor their cases to meet the moment, but benefit plans have a decades-long horizon.
In an employee-side litigation practice, the legal process is straightforward. An employee has a benefit plan problem. The first attempt to solve the problem is by filing a claim for benefits. If that fails, there is an internal appeal with the plan. If the problem remains unsolved, then a lawsuit is filed. Benefit litigators review existing precedents, outline their legal cases, and work to see that their clients prevail.
In the old days, employee benefit plans only had to monitor themselves for compliance with basic Department of Labor regulations and to be mindful of unique rules in insurance and banking that applied in states where a company operated. Most plans would receive regular updates on significant developments in case law across the U.S. It was all a bit sleepy and rote.
In 2010, that started to change, led by the massive federal law requiring that healthcare plans be brought in line with the Patient Protection and Affordable Healthcare Act (“Obamacare”). That was a huge change; so huge, in fact, that the law itself contained a built-in mechanism giving plans years to adjust the implementation deadlines. Then, the regulatory authorities repeatedly extended those deadlines even further.
Prior to this, federal regulations for employee benefit plans had been amended only a handful of times since 1975. After Obamacare, the applicable regulations and USDOL bulletins began changing with great regularity.
Before and after the law was passed, the Tea Party erupted with intense criticism over the law, and in turn there were hundreds of attempts to change the law, eliminate it, or repeal its most controversial provisions through litigation. Obamacare today looks nothing like it did fifteen years ago.
This sudden charged approach to what was, essentially, an employee benefits law, has led to increased plan litigation and other challenges as when the federal government tried to impose a fiduciary standard on financial advisors across all plans and into individual investors. This fiduciary duty rule has changed so many times that it is hard to keep up. It was recently struck down again by a federal court.
Since 2025, the pace of proposed laws affecting employee benefit plans has been on fire. Plans are suddenly being forced to grapple with some really “out there” issues.
Consider what today’s benefit plans must now address:
1. New, unusual, and unproven medical treatments and requests for coverage based on influencers, streamers and politics. Podcasters and the current HHS Secretary regularly provide medical advice to the public in a way that is new, untested, and complicated. Suddenly, employee benefit participants are hearing about how injecting peptides can help them live longer, lose weight, and look better. Participants are being told not to vaccinate or to vaccinate themselves and their families differently.
(Recently, the U.S. military ruled that mandatory flu vaccinations for active-duty personnel are considered “woke” and would be discontinued.) Proven cancer drugs that may have been covered by health insurance are suddenly being labeled “investigative” by the FDA. With plan participants being told to eat saturated fats, lard, heavy meat diets, and to stop eating plant-based foods and getting vaccinated, it remains to be seen what will happen for cardiac, cancer, rheumatology, and infectious disease costs over time for those plans. Plans have to keep up with this, and if all this medical advice turns out to be wrong, there will be additional pressure put on health insurers and self-funded healthcare plans to clean up the medical mess.
2. Expensive life-changing drugs are coming to market, and their arability is certain to increase rapidly with AI technology. Today, there are potentially lifesaving and life altering genetic therapies that are being developed by doctors and scientists, but they are funded privately and access to the drugs are at the cost of millions of dollars per treatment. “60 Minutes” recently chronicled the rapid and remarkable development of life-saving gene therapies that cost millions per dosage. The takeaway from the lengthy report was that benefit plans have no idea how to deal with this and definitely have not established sufficient cost reserves.
3. Political backlash surrounding medical treatments and coverage. The backlash against DEI programs generally, and certain medical treatments specifically, has led to complexities in the medical treatment offerings for the LGBTQ community. This is a completely different environment than two years ago. Moreover, the DEI fights have led to massive cuts in medical research grants to American universities. So, now healthcare innovations are being outsourced to financial investment firms or the private credit markets for development on their timetables, not in our universities using grant money. Again, how do benefit plans forecast healthcare claims over the next 20 years and will there be a backsliding in medical treatment options which, again, promises to increase care costs?
4. Political backlash surrounding the climate and retirement plan investments. States like Florida have required their retirement benefit plans to divest in investments that are marketed to help the environment and to redirect those funds to other investments, including fossil fuels. Florida actually passed a law that prohibits any type of investment that has as an objective the improvement of environment or climate. In our current political state, this may serve as a template for aggrieved plan members who object to similar investments by their own retirement plans and wish to litigate these issues.
5. Your home is now your 401k. In the retirement realm, plan administrators may have to develop rules allowing people to put their homes into their 401(k) plans. This will require harmonizing contribution limits with lending laws and reconciling ERISA’s prohibition on collection activity against a retirement plan with legal documents such as mortgages and home refinancing.
6. Alternative investments in 401k plans. Also in the retirement plan realm, there is a push to open 401(k) plans to cryptocurrencies, hedge funds, and other alternative investments. The proposed regulation is more than 150 pages, single-spaced, and with all sorts of scenarios that add to the confusion surrounding the rules.
7. The use of AI in administrative services contract administration for benefit plans. This is a small headache now, which promises to become a migraine soon, if it is not figured out. It is clear that many large insurers are experimenting with AI to cut down on labor costs, but it is unclear whether that complies with ERISA’s fiduciary standard. AI generated claims management reveals itself when a claim is paid and the Explanation of Benefits forms continue to show the claim as denied. Ultimately, these types of problems find their way back to the company.
This is a whole lot of change in a relatively short period. Plan designers have to keep up in a fast-changing world and plan administrators have to carefully monitor what is happening across the country. But empathy only goes so far. Not to worry, ERISA litigators will be there, too, watching closely to see how the plans navigate these changes.
John Joseph (J.J.) Conway founder of Michigan-based J.J. Conway Law, is a national employee benefits and ERISA attorney and litigator representing clients in individual cases and class action lawsuits.
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