On Jun. 28, 2024, the Supreme Court of the United States (SCOTUS) issued their ruling on the tandem cases of Loper Bright v. Raimondo and Relentless v. Department of Commerce, overturning the longstanding precedence set by the holding in Chevron v. Natural Resources Defense Council Chevron (Chevron).
As background, the SCOTUS’ decision in the Chevron case established a concept known as the Chevron deference. Chevron deference means that courts defer to a federal agency’s reasonable interpretation of a statute when that statute is ambiguously written by Congress.
Chevron deference has generally made it harder for an entity to challenge an agency’s interpretation of what Congress intended for the law. In fact, it is the most cited concept in administrative law arguments. Since it was overturned, courts deciding challenges to an agency’s interpretation of ambiguous laws no longer gives greater weight to the agency’s interpretation. This decision is expected to result in more cases in which the court will decide whether an agency’s interpretation is reliable.
In addition to the decision overturning Chevron, the SCOTUS also recently ruled in Corner Post, Inv. v. Board of Governors of the Federal Reserve System that the six-year statute of limitations under the Administrative Procedure Act begins running from the time of a plaintiff’s injury instead of beginning to run from the time the agency takes final action. This case, in conjunction with the removal of Chevron deference, allows future suits to challenge long-standing federal regulations more easily.
Group health plan sponsors will not feel any immediate effects resulting from this caselaw. While we expect more litigation challenging benefits-related regulations, it is also notable that the last several years have already been very litigious. Effected stakeholders almost always file suit against agencies challenging finalized benefits-related regulations. Employer plan sponsors can expect that to continue, with more disputes potentially decided by courts that give no deference to federal agencies.
Ultimately, employer plan sponsors should continue in their compliance efforts based on what we know the law to require. While some requirements might be challenged, it remains business as usual until a court strikes down a given law or regulation. As always, employers wondering how a given lawsuit affects their practices should consult with legal counsel.
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