2026 Medicare Advantage and Part D Final Rate Notice: What to Expect
Key Takeaways
CMS is expected to issue the 2026 final rate notice for Medicare Advantage (MA) and Part D plans by April 7, 2025.
The January 2025 advance notice proposed policies that would increase payments to MA plans by 2.23% on average; accounting for expected changes in coding increases CMS’ estimate to 4.33%. The increase is driven largely by a projected 5.93% growth in benchmarks, continued phase-in of a new risk model, and adjustments to risk scores.
Plans have advocated with CMS to increase cost growth projections and minimize the impact of payment and risk score adjustments, with the goal of improving on the 2.23% payment increase.
An expected MA and Part D final rule could also affect how plans and other stakeholders approach the 2026 payment year.
Why This Matters
The Centers for Medicare & Medicaid Services (CMS) is expected to finalize payment rates and policies for the 2026 Medicare Advantage (MA) and Part D programs in early April 2025. The final rate notice kicks off the sprint to submit 2026 plan bids to CMS by the June 2, 2025, deadline.
The final payment policies determine how plans approach bidding, including:
Whether and by how much they can provide core Medicare benefits below the benchmarks CMS sets.
How many rebate dollars they must spend on supplemental benefits that enrollees value.
How much they must spend to offer Part D benefits for the majority of plans that combine medical and prescription drug coverage.
A growing number of physicians are also taking note of the rate setting process. Physicians who participate in shared risk and other value-based payment models with MA plans stand to gain or lose revenue depending on the final payment rates and policies. Providers considering whether to participate in MA networks may look to the final rate notice to evaluate a program’s potential growth in the coming year, because rate increases typically lead to more generous benefits and drive enrollment.
The following key elements of the rate notice will determine the final payment update for 2026.
Growth Rate
The growth rate is CMS’s estimate of how much the cost of providing care to enrollees will change in 2026. It forms the basis for benchmark payments to plans and is primarily based on utilization trends among Medicare beneficiaries in the “traditional” or fee-for-service (FFS) program. MA plans benefit when the growth rate is high.
The advance notice estimated the 2026 growth rate at 5.93%, which is an increase over recent years. MA plans noted that this estimate relied on FFS data only through early 2024, however, and argued that using more recent data would suggest even higher utilization. Plans have urged CMS to do so for the final notice.
The advance notice also proposed “technical” adjustments to the way CMS calculates FFS utilization and costs. These adjustments would effectively lower the growth rate, and plans have urged CMS to slow or halt the changes’ implementation to limit that impact.
Stakeholders should keep in mind that the growth rate announced in the final rate notice is a national average. Benchmark payments are set at the county level, so a plan’s payments will rise or fall based on where it offers coverage and enrolls members. Payments are also affected by a plan’s Star rating and its enrollees’ health status. Plans will rely on detailed county-level data released in conjunction with the final rate notice to determine exactly how their payments will change for 2026.
Risk Model
While the growth rate determines how much the benchmark payment in a county will change for 2026, the risk model is also an important piece of payment. In 2024, CMS began phasing in an updated risk model for MA that was intended to address concerns about coding intensity that led to higher risk-adjusted payments. The transition to the new risk model is scheduled to conclude in 2026, but some plans have urged CMS to freeze the transition at the current stage or reinstate the old risk model. Even if the Trump administration is sympathetic to this request, it likely would not have enough time to reinstate the old risk model for the 2026 bid cycle. Other stakeholders have urged CMS to finish the phase-in as scheduled, arguing that the new model imposes necessary curbs on the growing gap between FFS and MA risk scores.
A separate risk model adjusts Part D payments. The Inflation Reduction Act changed Part D benefit design by shifting a greater share of risk from the government to plans. As a result, the Part D risk model has taken on added importance for plans. Almost all MA enrollees choose plans that include Part D benefits, so changes to the Part D risk model are an important part of the MA payment calculation. CMS adjusted the model in 2025 and proposed more updates for 2026 to keep up with drug prices and utilization trends. Stakeholders have generally expressed support for the proposed updates, and CMS will likely finalize them as proposed.
Normalization Factor
The normalization factor is a highly technical adjustment CMS makes to risk scores and payments to account for changes in the FFS population’s underlying risk. It is one of the few levers CMS has, besides the growth rate, to dial MA payments up or down in a given year. How CMS calculates the normalization factor can have a big impact on payment. Because the healthcare disruptions of the COVID-19 pandemic made it difficult to identify risk trends, CMS has varied its calculation approach in recent years. For 2026, CMS proposed to use the same calculation method as in 2025, which would result in substantial cuts to MA risk scores and payments. Plans have urged CMS to adopt a different calculation approach that would soften the payment impact of the normalization adjustment.
In 2025 CMS changed the way Part D normalization is applied by creating separate factors for plans that combine MA and Part D benefits (MA-PDs) and plans that offer Part D benefits only (PDPs). CMS’s rationale was that Part D risk scores have increased much faster for MA-PDs than for PDPs. CMS proposed to continue this method in 2026, which could mean large reductions in Part D risk scores and payments to MA-PDs. Plans have argued that lower Part D risk-adjusted payments will lead to higher Part D premiums, which they must “buy down” with rebate dollars in order to offer plans that include both medical and drug coverage with no monthly premium. About 60% of MA enrollees enrolled in a $0 premium plan in 2025.
Stars Rating System
High scores in the Stars Rating System trigger bonus payments for MA plans and are an important marketing tool. The 2026 advance notice discussed several measure updates and work on potential changes like simplifying the measures and methods used to calculate ratings but most Stars changes come through rulemaking, not the rate notice process. While stakeholders should not expect to see any of these changes formalized in the final rate notice, they offer a preview of rulemaking to come.
Upcoming Final Rule
The final rate notice is not CMS’s only opportunity to make changes to the MA and Part D programs for 2026. In late 2024, CMS released a proposed rule for MA and Part D with provisions that would take effect in 2026. The final rule is now under review at the Office of Management and Budget, so CMS potentially could finalize some or all of those provisions in time for the 2026 bid cycle. One key proposal would allow Part D plans to cover anti-obesity medications such as Wegovy and Zepbound. While plans and other stakeholders have raised serious concerns about this proposal and urged CMS not to finalize it, many beneficiaries have expressed support.
The Bottom Line and What to Expect
When releasing the advance rate notice, CMS estimated MA payment rates would rise by 2.23% for 2026, on average. After factoring in expected trends in diagnosis coding, the agency projected an average MA payment rate increase of 4.33%. The advance rate notice was released under the Biden administration, so changes in the final rate notice might illuminate the Trump administration’s approach to MA. A bottom-line increase that improves on the 2.23% in the advance notice might bode well for plans and their physician partners. Anything less than 2.23% might signal rough seas ahead for the MA program.
The Trump Administration Proposes Changes to Regulations Governing Insurance Subject to the Affordable Care Act
In its first major attempt to reform the Affordability Care Act (“ACA”), the Trump Administration issued a proposed rule on March 10, 2025 (“Proposed Rule”) amending regulations governing insurance coverages subject to the ACA.[1] Public comments on the Proposed Rule will be accepted for consideration until April 11, 2025.
In conjunction with the Proposed Rule, the Centers for Medicare & Medicaid Services (“CMS”) issued a statement explaining that the proposed regulations include “critical and necessary steps to protect people from being enrolled in Marketplace coverage without their knowledge or consent, promote stable and affordable health insurance markets, and ensure taxpayer dollars fund financial assistance only for the people the ACA set out to support.” To support its position, CMS cited a report from the Paragon Health Institute suggesting “4 to 5 million people were improperly enrolled in subsidized ACA coverage in 2024, costing federal taxpayers up to $20 billion.” The impact analysis that accompanies the Proposed Rule shows that the Proposed Rule will reduce enrollment in the ACA plans, reduce the number of people who access premium tax credits and cost-sharing reductions that make coverage more affordable, and limit benefits available to individuals including, specifically, coverage for services related to a sex-trait modification as an essential health benefit.
As summarized below, the Proposed Rule contains a variety of key changes to the regulations governing health insurance subject to the ACA that will impact those seeking to obtain health coverage through state and federal insurance marketplaces (the “Marketplace”). In this regard, the Proposed Rule does the following
Allows insurers to deny coverage to individuals who have past-due premium from prior coverage, allowing insurers to consider past due premium amounts as owed as the initial premium for new coverage.
Excludes persons who are Deferred Action for Childhood Arrivals (“DACA”) from eligibility to enroll in a health insurance plans offered on the Marketplace or access premium tax credits and cost-sharing reductions.
Requires CMS to apply a “preponderance of the evidence” standard before terminating an agent for cause as to their agreement with CMS to solicit and sell Marketplace coverage.
Eliminates the ability of an individual to certify to their income when applying for premium tax credits and cost-sharing reductions, instead requiring income determinations be reconciled with tax filing or other information potentially creating coverage delays and administrative barriers. In addition, if an individual does not file a Federal income tax return for two years, the individual will not be eligible for premium tax credits and cost-sharing reductions.
Institutes income eligibility verifications for premium tax credits and cost-sharing reductions and charges people auto-reenrolled into zero-premium plans a small monthly payment until they confirm their eligibility information.
Adjusts the automatic enrollment hierarchy for individuals.
Shortens the annual open enrollment period from the current period, November 15 to January 15, reducing it by one month, to November 15 to December 15.
Removes the monthly special enrollment period (“SEP”) for qualified individuals who become eligible for premium tax credits and cost-sharing reductions because their projected household income falls to or below 150% of the federal poverty level, which means that these individuals will have to wait before they can access premium tax credits and cost sharing reductions.
Changes de minimis thresholds for the actuarial value for plans subject to essential health benefits (“EHB”) requirements and for income-based cost-sharing reduction plan variations.
Updates the annual premium adjustment percentage methodology to establish a premium growth measure that according to the Proposed Rule reflects premium growth in all affected markets, increasing the cost of coverage.
Prohibiting insurance companies subject to ACA requirements from providing coverage for services related to a sex-trait modification as an essential health benefit.
These changes will not take effect immediately, as the Proposed Rule now faces a public comment period that stays open until April 11, 2025. After receipt of public comments, CMS may revise the Proposed Rule before issuing it in final form. If instituted, these changes could have significant impacts on the approximately 24 million Americans who enrolled in coverage in the ACA Marketplace for 2025 and who plan to enroll in coming years. Most importantly, consumers will have less time to enroll and need to present additional documentation to demonstrate eligibility for premium tax credits and cost-sharing reductions creating administrative barriers to enrolling in coverage. In addition, automatically re-enrolled consumers will be charged a small monthly fee until they confirm their eligibility information. Significantly, individuals who are brought to the country from abroad as children and are DACA status will be prohibited in enrolling in Marketplace coverage. And finally, the Proposed Rule prohibit insurers from covering gender-affirming care as essential health benefits.
[1] Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability, CMS-9884-P, 90 Fed. Reg. 12942 et seq. (the “Proposed Rule”).
MASSIVE NEW RISK FOR MARKETERS: Dobronski Nukes SelectQuote and the Whole TCPAWorld Has to Deal With the Fallout
So there’s this guy named Mark Dobronski.
Frequent commenter on TCPAWorld.
Aggressive repeat litigator who is not, at all, afraid to go it alone in TCPA cases and bring suits on his own behalf. He also raises novel and interesting issues.
Here’s one.
47 CFR 64.1601 provides that anyone engaging in telemarketing must transmit either a CPN or ANI, and the name of the telemarketer.
Dobronski alleged SelectQuote didn’t comply with this rule. So he sued.
But SelectQuote moved for summary judgment and won originally with the court determining the CFR provision was promulgated under section 227(e)–the Truth in Caller ID Act–that does not afford a private right of action.
Great, fine. Except one little problem– 64.1601 was promulgated before 227(e) was added to the TCPA.
Oops.
So this creates a mystery: Which section of the TCPA was the CFR section promulgated under?
SelectQuote’s attorneys argued it was pursuant to Section 227(d)–which proscribes technical requirements for prerecorded calls– but Dobronski countered the provisions of 64.1601 apply to all marketing calls, not just prerecorded calls.
As a result the Court defaulted to 227(c) as the statutory section that gave the FCC authority to promulgate the rule. This is so although the court conceded section 227(c) was not a perfect fit either.
So Dobronski just got a court to hold that the provisions of 64.1601 ARE enforceable pursuant to a private right of action.
Eesh.
That means telemarketers–looking at you lead generators–need to make sure either:
The name of the telemarketer is displayed on your caller ID; or
The name of the seller on behalf of which the telemarketing call is placed and the seller’s customer service telephone number.
Hope ya’ll are following along. Because this is a HUGE deal.
Btw– the CORRECT answer here is that the FCC EXCEEDED ITS AUTHORITY in creating 64.1601 as Congress had not yet given it the ability to regulate caller ID until 227(e) was passed. Ta da.
But SelectQuote’s lawyers (apparently) did not raise that argument. So here we are.
And, what a surprise– the lawyers who just got beat by a guy WITHOUT AN ATTORNEY are from, you guessed it!, #BIGLAW!!!
Hire big law. Expect big losses folks.
Luckily you can get out of the biglaw trap for less money but only for another 6 days!
Chat soon.
Case is: Dobronski v. SelectQuote 2025 WL 900439 (E.D. Mich March 25, 2025)
(UK) The Issue With Hybrid Insolvency Claims Rumbles On
Should a claim be struck out where the applicant has failed to comply with the procedural requirements relating to “hybrid” claims? In the recent case of Park Regis Birmingham LLP [2025] EWHC 139 (ch), the High Court held that it would be disproportionate to strike out the claim on that basis.
Hybrid Claims
Hybrid claims are those that include claims under the insolvency legislation (e.g. “transaction avoidance” claims), as well as company claims (e.g. unlawful dividends or sums owing under a director’s loan account). Previously, it was common practice for such claims to be issued as a single insolvency act application, rather than as a Part 7 claim.
Since the Manolete Partners plc v Hayward and Barrett Holdings case in 2021, applicants have been required to issue these claims separately, with the insolvency claims being issued as an insolvency application, and the company claims being issued as a separate Part 7 claim. The applicant can then issue an application to request that the separate proceedings are managed together e.g. at a single trial. This has meant that the costs of issuing such claims have increased, as the issue fee for a Part 7 claim can be up to £10,000, whereas the issue fee for an insolvency application is £308.
Facts
In the Park Regis case, the applicants had incorrectly issued a hybrid claim as a single insolvency application, without issuing the separate Part 7 claim for the company claims. However, when issuing the application, the applicant’s lawyers had informed the Court that the issue fee for the application would be £10,000, as the claim was a hybrid claim, and therefore the £10,000 fee was paid.
The respondents applied to strike the claim out, on the basis that the applicant had failed to comply with the Hayward and Barrett Holdings case and argued that the applicant’s approach constituted an abuse of process.
The judge held that the applicant had failed to comply with the procedural requirements regarding hybrid claims. However, in exercising her discretion about whether to strike out the claim, the judge held that striking out the claim would be too severe a penalty for that failure. The judge therefore exercised her discretion (under CPR 3.10) to waive the procedural defect and allowed the claim to proceed as if it had been properly issued.
Commentary
While the judge in this case declined to strike out the claim, the judge was clear that the applicant’s attempt to issue the claim by way of a single insolvency application, but paying the higher Part 7 issue fee, was procedurally incorrect. Had this approach been endorsed it would have made issuing such applications more straightforward for practitioners, but the judge noted the absolute requirement for separate proceedings.
We understand that this decision has been appealed – so watch this space for further comment. In the interim practitioners should continue to apply the Hayward and Barrett Holdings approach and issue two sets of proceedings to avoid the risk of a claim being struck out. Although the procedural defect was waived in this case, the power to do that is a discretionary one!
The Insolvency Service in the First Review of the Insolvency Rules has reported that they are considering whether an amendment to the Rules is required to address the Hayward and Barrett Holdings case which would hopefully see a return to previous practice – one set of proceedings with one court fee. But to date there has been no indication from the Insolvency Service when (if) they will progress that and unless further clarity is provided on appeal it seems the sensible approach for practitioners is to follow Hayward when pursuing a claim.
DEA Buprenorphine Rule Delayed to December 31, 2025
The U.S. Department of Health and Human Services (HHS) and the Drug Enforcement Administration (DEA) have postponed the effective date of the final rule regarding telemedicine prescribing of buprenorphine (the final buprenorphine rule) to December 31, 2025. In its final rule postponing the effective date, the DEA notes that it received 32 comments. Of those, 13 commenters requested the effective date be finalized as soon as possible, while three urged an additional delay. Eleven commenters raised concerns about the final buprenorphine rule itself. The DEA states that, because of these comments, it will further delay the effective date to further review any questions of fact, law, and policy the rules may raise.
A Brief History
On January 17, 2025, in anticipation of the change of administration, the DEA and HHS finalized and published the final buprenorphine rule, which establishes a permanent pathway for the telemedicine prescribing of buprenorphine for opioid use disorder (OUD). The final buprenorphine rule was set to take effect February 18, 2025. (See our prior blog “DEA Tightens Buprenorphine Telemedicine Prescribing Rules” which discusses the requirements of the final buprenorphine rule.) On January 20, 2025, the Trump administration issued the Regulatory Freeze Pending Review Presidential Memorandum authorizing HHS and the DEA to delay the effective date of the final buprenorphine rule until March 21, 2025. The delay was intended to allow time to review any questions of fact, law, and policy the rule may raise, as well as to open a comment period to gather input from interested parties. On February 14, 2025, in accordance with the Presidential Memorandum, HHS and the DEA announced this delay and review of the final buprenorphine rule. (See our prior blog “DEA Delays Final Buprenorphine Rule” about the first delayed effective date of the final buprenorphine rule.)
Make Your Voice Heard
HHS and the DEA are not accepting formal comments with this final rule. However, stakeholders with concerns about the final buprenorphine rule and its effective date are encouraged to share their feedback by contacting their local Congressperson or the White House.
What Comes Next
With the delay of the final buprenorphine rule, stakeholders can continue relying on the current set of telemedicine prescribing flexibilities through the end of 2025 without uncertainty about whether the obligations of the final buprenorphine final rule will apply and potentially supersede the flexibilities now that the dates are aligned. As a potential permanent solution for prescribing OUD treatment via telemedicine, two U.S. Senators reintroduced the Telehealth Response for E-Prescribing Addiction Therapy Services (TREATS) Act in March 2025, as bipartisan legislation. The TREATS Act amends the Controlled Substances Act to make the buprenorphine-related telemedicine prescribing flexibilities permanent. It was previously introduced in June 2020, February 2021, and November 2023, but in each instance, it did not progress out of Committee.
Although the TREATS Act is more favorable to stakeholders than the final buprenorphine rule because it does not include the additional obligations of the final buprenorphine rule, its history suggests it is unlikely to be signed into law. However, because the current DEA stance on the issue is still unclear, there remains a possibility that the TREATS Act could be finalized in place of the final buprenorphine rule. We will continue to monitor developments regarding the final buprenorphine rule and the TREATS Act.
Safety Perspectives From the Dallas Region: The DOJ’s New Position on ALJs—What Employers Need to Know [Podcast]
In this episode of our Safety Perspectives From the Dallas Region podcast series, shareholders John Surma (Houston) and Frank Davis (Dallas) discuss the U.S. Department of Justice’s (DOJ) recent statement concluding that the removal restrictions for administrative law judges (ALJs) are unconstitutional. Frank and John explore the implications of this decision for employers, particularly those facing OSHA citations, and examine its broader impact on the evolving legal landscape of OSH Act enforcement.
Keep California Rolling: New Bills Poised to Revitalize Production (in Hollywood)
The introduction of Senate Bill 630 and Assembly Bill 1138 aims to provide California with a competitive advantage in its quest to retain and bring back production jobs that are vital to the entertainment industry. The bills were introduced by Senator Ben Allen, Assembly Members, Rick Chavez Zbur, and Isaac Bryan, with a focus on job creation and promise to diversify the types of productions that qualify for California’s Film and Television Tax Credit program. SB 630 and AB 1138 will be referred to respective policy committees over the coming weeks. Governor Gavin Newsom has also unveiled plans to more than double California’s current tax credit cap to provide much-needed relief for the entertainment industry following COVID-19 shutdowns, the strikes, LA wildfires and mass exodus of film and television production from California.
SB 630 and AB 1138 are intended to amend, update, and modernize California’s Film and Television Tax Credit Program, with the stated goal of protecting and bringing back jobs that have left, and continue to leave California for other more lucrative production locations, and to ensure that California remains competitive in the industry. SB 630 and AB 1138 would increase the rebate by an unspecified amount from the 20% that is currently offered to most productions in California. Each law would also expand types of productions that are eligible for the tax incentives, by including animation, game shows, and other unscripted programming, each of which is currently excluded.
In an effort to bolster this momentum, the Entertainment Union Coalition has launched a campaign called “Keep California Rolling”, which aims to keep film and television jobs in California.” The initiative is labor-led and its main purpose is to emphasize the importance of exploring new ways to attract film and television production back to the state, as well as support Governor Newsom’s proposal to expand the California Film & TV Tax Credit from $330 million annually to $750 million. However, though likely to be approved, this expansion hinges on California’s 2025-2026 budget which is currently being negotiated.
Several member entities of the Entertainment Union Coalition have traveled to Sacramento to lobby lawmakers in support of this jobs-based program, including the Directors Guild of America, LiUNA! Local 724, SAG-AFTRA, Teamsters Local 399, Writers Guild of America West, California IATSE Council, and the American Federation of Musicians. Collectively, the Entertainment Union Coalition represents over 165,000 members who live and work in California’s entertainment industry. If Governor Newsom’s proposal passes, it will prove to be the most significant expansion to the program in decades.
Production jobs being lured away to different territories has been an issue plaguing California for decades, as the financial incentives in other states and countries have proven too lucrative to pass up–Georgia, Ontario and the United Kingdom have no caps on their subsidies for film and television productions. According to recent reports from FilmLA and the Entertainment Union Coalition, production in Los Angeles was down 30% over five-year averages in 2024 and approximately 50% of the 312 productions did not qualify for California’s tax credit incentive from 2015 to 2020. SB 630 and AB 1138 aim to change that trajectory and create a sustainable environment that keeps jobs and economic benefits in California.
Jennifer Hays contributed to this article.
New Mexico Is the Next State With a Proposed Heat Illness Rule
New Mexico is the next state to propose a heat exposure rule for workers. The New Mexico Environment Department has proposed a rule aimed at preventing heat-related illnesses and injuries in the workplace. The proposed rule, titled “Heat Illness and Injury Prevention,” is designed to establish comprehensive standards for occupational health and safety, particularly in environments where employees are exposed to significant heat.
Quick Hits
The proposed rule would require a plan that incorporates control measures, acclimatization, emergency medical care, and training.
The proposed rule would apply to both indoor and outdoor locations.
There will be narrow exemptions for incidental heat exposures of fifteen minutes or less within a one-hour period, emergency response operations, telework, and environments where mechanical ventilation systems maintain a heat index below 80 degrees Fahrenheit.
The New Mexico Environment Department will open a portal in early April 2025 to accept comments on the rule.
The proposed rule is similar to other state rules with requirements for a plan, training, assessments, rest breaks, and cooling areas. The tentative effective date is July 1, 2025. Public comments will be accepted beginning in April 2025.
Details on the Proposed Rule
Heat Illness and Injury Prevention Plan
Employers would be required to establish, implement, and maintain a written heat illness prevention plan. The proposed rule would require each plan to be available in both English and the language understood by the majority of employees. The plan would need to include procedures for heat assessment, control measures, acclimatization methods, emergency medical care, and training.
Heat Exposure Assessment
Employers would need to conduct a heat exposure assessment when the heat index exceeds 80 degrees Fahrenheit. This assessment would consider factors such as direct sunlight, work intensity, acclimatization, personal risk factors, and the heat-retaining effects of protective clothing.
Control Measures
The proposed rule would mandate several control measures for environments where the heat index exceeds 80 degrees Fahrenheit.
Acclimatization methods: Employers would be required to provide a gradual increase in work duration in the heat for new or returning employees.
Provision of fluids: Employers would be required to provide sufficient hydrating fluids, including water and electrolyte drinks, and encourage regular fluid intake.
Regular rest breaks: Employers would be required to provide paid rest breaks, with schedules based on the heat index and work intensity.
Cooling areas: Employers would be required to establish cooling areas with shade or mechanical ventilation.
Personnel monitoring: Employers would be required to implement methods to promptly identify employees experiencing heat illness, such as regular communication, buddy systems, and self-monitoring.
Emergency Medical Care
Employers would need to ensure appropriate emergency medical care is available when the plan is in effect.
Training
Like other states with similar heat illness plans, employers would be required to provide training on environmental and personal risk factors, control measures, rest breaks, acclimatization methods, types of heat illness, and emergency procedures. Training would need to be conducted at the beginning of employment and annually thereafter.
Recordkeeping
The proposed rule would require employers to create and maintain records of acclimatization schedules, training, and heat illness incidents for at least five years.
The Trump Factor, Jobs, Laws, and the Workplace [Podcast]
What does the new administration mean for the future ofemployment law? As new orders and laws are signed at the federal level, The Employment Strategists David T. Harmon and Mariya Gonor break down what policies have been removed or revised, including:
Stay-or-pay provisions
Student-athlete rights
Rolling back on DE&I initiatives
Amended pregnancy accommodations, including abortion protections
Deprioritizing discrimination policies around race, gender, and sexual orientation
The use of AI in hiring
Whether you’re an employer trying to stay compliant withstate and federal mandates or an employee wanting to better understand your rights, this conversation is one you won’t want to miss.
Navigating Uncertainty: The Plight of H-1B Visa Holders During the Trump Administration
The H-1B visa program has been a cornerstone of U.S. immigration policy, allowing skilled foreign workers to fill critical roles in industries like technology, finance, and healthcare. However, under the Trump administration, H-1B visa holders faced unprecedented uncertainty due to evolving immigration policies, increased scrutiny, and unpredictable enforcement measures. This environment of instability not only affected the lives and careers of visa holders but also had far-reaching implications for U.S. employers and the broader economy.
Under the Trump administration, immigration policies underwent significant shifts, with the H-1B program experiencing some of the most notable impacts. Key changes included:
Increased Denials and RFEs (Requests for Evidence): Visa applicants faced a rising number of RFEs, with many receiving requests for additional documentation even after their applications had been initially approved. This led to prolonged processing times and heightened anxiety among applicants.
Redefinition of “Specialty Occupations”: The administration sought to narrow the definition of eligible H-1B occupations, making it more challenging for certain professionals to qualify. This redefinition particularly affected fields like software engineering, where job roles were often subject to subjective scrutiny.
Executive Orders and Travel Restrictions: Policies like the “Buy American, Hire American” executive order aimed to protect U.S. jobs but inadvertently increased the hurdles for H-1B holders. Travel restrictions further exacerbated the situation, leaving many workers stranded abroad or unable to visit their home countries without risking re-entry.
Impact on Workers and Employers
The uncertainty surrounding H-1B visas created a ripple effect throughout the U.S. economy. For visa holders, the fear of sudden job loss or visa denial became a constant concern. Since H-1B visas are tied to specific employers, any disruption—such as layoffs or company shutdowns—could result in the immediate loss of legal status, forcing individuals and their families to leave the country on short notice.
Employers, particularly in the tech sector, also faced challenges. Companies like Amazon, Google, and Microsoft have historically relied on H-1B talent to drive innovation and address skill shortages. The unpredictability of the visa process made it harder for businesses to plan for the future, potentially slowing down projects and reducing competitiveness on a global scale.
Legal Challenges and a Pathway Forward
The shifting landscape prompted legal challenges and advocacy efforts aimed at protecting H-1B visa holders. Immigration attorneys and organizations like the American Immigration Lawyers Association (AILA) worked tirelessly to challenge restrictive policies in court. Several lawsuits sought to overturn arbitrary denials and procedural changes, with some achieving temporary injunctions that provided brief reprieves for visa holders.
In response to the uncertainty, many H-1B holders began exploring alternative pathways to secure their status in the U.S. Options included:
Transitioning to Green Cards: Some visa holders pursued employment-based green cards, though this path was often fraught with its own set of challenges, including lengthy wait times due to per-country caps.
Switching to Other Visa Categories: In certain cases, individuals were able to transition to other visa types, such as the O-1 visa for individuals with extraordinary abilities.
Considering Relocation to Other Countries: With Canada actively courting skilled immigrants through its Global Talent Stream program, some H-1B holders opted to relocate north, attracted by more predictable immigration policies and shorter processing times.
The Future, Broader Implications
The uncertainty surrounding the H-1B program had broader implications beyond individual visa holders. It underscored the critical role of immigration in maintaining U.S. leadership in science, technology, and innovation. Restrictive policies risked driving top talent to other countries, potentially undermining the nation’s competitive edge in key industries.
The H-1B visa program has long been a symbol of opportunity for skilled foreign workers seeking to build a future in the United States. Yet, under the Trump administration, that opportunity was marred by uncertainty, fear, and instability. As the nation moves forward, it is crucial to strike a balance between protecting American jobs and fostering an immigration system that welcomes and retains global talent. Only by addressing these challenges can the U.S. continue to thrive as a hub of innovation and economic growth.
Trump Administration’s Executive Orders Attempt To Reset Sex & Gender Identity Issues in Women’s Sports
In January 2025, the Republican Party took control of both houses of Congress and the White House, portending seismic policy shifts around women’s and college sports, as previously reported here. Indeed, in the days immediately following his inauguration, President Trump issued a slew of Executive Orders, including Executive Order 14201 (Keeping Men Out of Women’s Sports) (February 5, 2025) (“EO 14201”). EO 14201 declared it would now be the policy of the United States to rescind funding from educational programs that permit transgender women or girls to compete on female sports teams or in female sports (the “EO 14201”).
The Trump Administration’s Department of Education immediately followed EO 14201 by making two significant policy announcements concerning the application of Title IX of the Education Amendments of 1972 (“Title IX”), signaling that President is already following through on his campaign pledge to reset Biden-era rules and regulations regarding women’s sports.
Below, we review EO 14201 and subsequent developments to discern their meaning and assess their immediate and long-term impact on women’s sports.
Key Provisions of the Executive Order
EO 14201 is effectively an extension into women’s sports of the Trump Administration’s interpretation of biological sex pursuant to Executive Order 14168 (Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government), which declared that it is the policy of the Unites States to recognize two sexes, male and female. EO 14201 states that participation of males (i.e., transgender women) in female sports “is demeaning, unfair, and dangerous to women and girls, and denies women and girls the equal opportunity to participate and excel in competitive sports.” Accordingly, it is the United States’ policy to “rescind all funds from educational programs that deprive women and girls of fair athletic opportunities, which results in the endangerment, humiliation, and silencing of women and girls and deprives them of privacy” and “oppose male competitive participation in women’s sports more broadly, as a matter of safety, fairness, dignity, and truth.”
In furtherance of its stated policies, EO 14201 includes directives to:
The Department of Education (“DOE”), to (i) comply with a recent federal court ruling vacating the Biden Administration’s Final Rule that broadened Title IX’s prohibitions against discrimination on the basis of sex to include gender identity, (ii) take action, including through litigation, review of federal funding, rulemaking and policy, to protect “all-female athletic opportunities and all-female locker rooms” in the interest of securing the equal opportunity guarantees of Title IX and ensuring “women’s sports are reserved for women.”
The Assistant to the President for Domestic Policy, to (i) engage with large athletic organizations and governing and harmed female athletes in support of EO 14201’s purpose, and (ii), convene State Attorneys General to identify best practices to define and enforce equal opportunity for women in sports.
The Secretary of State – among other government officials – to (i) engage in a variety of acts, including but not limited to rescinding support for programs that categorize competition based on identity rather than sex and promote international rules governing sport to protect a female sports category that is sex-based; (ii) review and adjust immigration policies that would admit males to the United States to participate in women’s sports, and (iii) take efforts to ensure that the International Olympic Committee amend standard to protect women and eligibility for Olympic competition is determined by sex, not gender identity or testosterone reduction.
Related Developments
The effects of EO 14201 were immediate.
On February 4, 2025, the DOE followed through and issued a “Dear Colleague” letter stating that it would be enforcing Title IX, not under the above-referenced, recently vacated 2024 Rule, but rather under the 2020 Rule, which was promulgated during the prior Trump Administration and aligns with EO 14201’s biological definitions of sex, excluding gender identity.
On February 6, 2025, and pursuant to EO 14201, the NCAA implemented a new participation policy limiting competition in women’s sports only to student-athletes assigned female at birth, while allowing student-athletes either (x) assigned male at birth, or (y) assigned female at birth who has begun gender-affirming hormone therapy (e.g., hormone therapy) to practice with women’s teams.
Less than a week later, on February 12, 2025, the Department of Education announced that it was rescinding guidance issued by the Biden DOE on January 16, 2025, which had warned NCAA schools that payments to student-athletes for use of their name, image, and likeness (“NIL”), whether distributed by schools or third parties (e.g., collectives or brands), qualified as “financial assistance” and must be distributed under Title IX on a nondiscriminatory basis.
By rescinding that guidance, the Trump Administration appears to be signaling that the protection of women in sports does not extend to NIL pay and that disparities in NIL pay between male and female athletes will not trigger Title IX scrutiny, at least not from the DOE. Thus, at least in the eyes of Trump’s DOE, if and when schools ever begin making NIL or revenue-sharing payments to student-athletes, Title IX will not restrict them from directing those funds in disproportionate amounts to athletes in revenue-generating sports, which are predominantly male.
Looking Ahead
EO 14201 was unsurprising given President Trump’s stated positions during the 2024 election campaign. Also unsurprising is the wide-ranging responses to EO 14201, which will likely face legal challenges in implementation given conflicting state laws and deep political divide. Its practical impact will likely differ based on level of competition (e.g., youth versus college sports) and whether federal funding is involved in any particular circumstance. In the meantime, organizations involved in women’s or girls’ sports would be wise to consider its potential impact on their polices and practices and keep an eye out for related developments.
Board of Directors 101: Roles, Responsibilities, and Best Practices
Serving on a board of directors is a pivotal role in corporate governance, demanding a clear understanding of legal and financial responsibilities. This article delves into the core functions of a board, the fiduciary duties of its members, and the distinctions between fiduciary and advisory boards.
Understanding the Board of Directors
A board of directors serves as a corporation’s governing body, representing shareholders and overseeing the organization’s management. Jonathan Friedland, a corporate partner with Much Shelist PC, notes that the board’s primary functions include providing strategic direction, ensuring legal compliance, and upholding ethical standards.
Boards are typically composed of:
Inside Directors: Individuals who are part of the company’s management, such as executives or major shareholders.
Outside Directors: Independent members who are not involved in daily operations, offering unbiased perspectives.
In public companies, boards are mandated by law and must adhere to stringent compliance and financial disclosure requirements. Private companies, while not always legally required to have a board, often establish one to benefit from external expertise and governance.
The Purpose and Responsibilities of the Board
Allan Grafman highlights that an effective board transcends mere oversight; it actively shapes the company’s trajectory.
Key responsibilities include:
Strategic Oversight: Guiding long-term planning and ensuring alignment with the company’s mission.
CEO Supervision: Appointing, evaluating, and, if necessary, replacing the Chief Executive Officer.
Succession Planning: Preparing for future leadership transitions to maintain organizational stability.
Legal and Ethical Compliance: Ensuring adherence to laws and ethical standards to mitigate risks.
For public companies, these duties are underscored by regulations such as the Sarbanes-Oxley Act, which mandates accurate financial reporting and internal controls. Private companies, though subject to fewer regulations, must still navigate complex governance landscapes, balancing the interests of various stakeholders.
Fiduciary Duties of Board Members
Board members are bound by fiduciary duties, which are legal obligations to act in the best interests of the corporation and its shareholders.
These duties encompass:
Duty of Care: Directors must make informed decisions with the diligence that a reasonably prudent person would exercise in similar circumstances. This involves staying informed about the company’s operations and relevant market conditions.
Duty of Loyalty: Directors are required to prioritize the corporation’s interests above personal gains, avoiding conflicts of interest. This means refraining from engaging in activities that could harm the company or benefit them at the company’s expense.
The Business Judgment Rule offers directors protection, presuming that decisions are made in good faith and with due care. However, this presumption can be challenged if there is evidence of gross negligence or self-dealing. In such cases, courts may apply the Entire Fairness Doctrine, requiring directors to prove that their actions were entirely fair to the corporation and its shareholders.
Fiduciary vs. Advisory Boards
David Spitulnik notes that fiduciary and advisory boards are distinct in role and authority.
Fiduciary and advisory boards differ in the following key ways:
Fiduciary Boards
Legal Obligation: Hold legal responsibilities and are accountable to shareholders.
Decision-Making Authority: Empowered to make binding decisions, including hiring and firing executives.
Regulatory Compliance: Must adhere to corporate governance laws and regulations.
Advisory Boards
Non-Binding Guidance: Offer strategic advice without the authority to make final decisions.
Flexibility: Provide insights on specific issues, such as market expansion or product development.
No Legal Liability: Generally not subject to the same legal obligations as fiduciary boards.
For private companies, advisory boards can be useful in providing expertise and mentorship without the formalities and liabilities associated with fiduciary boards.
Qualities of Effective Board Members
Alex Sharpe emphasizes that board members should have the requisite skills.
Exceptional board members will possess a combination of attributes:
Financial Acumen: A strong grasp of financial statements and the ability to assess the company’s fiscal health.
Strategic Vision: The capacity to think long-term and guide the company toward sustainable growth.
Integrity: Upholding ethical standards and fostering a culture of transparency.
Industry Expertise: Deep knowledge of the sector to provide relevant insights.
Effective Communication: The ability to articulate ideas clearly and listen actively to diverse perspectives.
Spitulnik adds that meticulous preparation, such as reviewing materials in advance and taking detailed notes during meetings, enhances a director’s effectiveness and demonstrates commitment.
Compensating Board Members
Compensation for board members varies based on the company’s size, industry, and resources. While some private companies may not offer monetary compensation, providing equity stakes or other incentives can attract and retain talented directors. Companies with revenues under $20 million often have informal advisory boards with minimal compensation, whereas larger companies may offer more substantial remuneration packages.
Common Challenges in Board Governance
Even well-structured boards can encounter pitfalls. Allan Grafman and Jonathan Friedland identify several common challenges:
Role Ambiguity: Unclear definitions of responsibilities can lead to overlaps or gaps in governance.
Inefficient Meetings: Poorly organized meetings can result in unproductive discussions and delays in decision-making. Ensuring a well-structured agenda and sticking to key priorities can improve efficiency.
Lack of Strategic Focus: Boards that concentrate solely on compliance and operational oversight may fail to provide long-term strategic guidance. A balanced approach is necessary to foster both accountability and growth.
Weak Team Dynamics: A dysfunctional board can hinder progress. Differences in opinion are natural, but a lack of mutual respect or collaboration can create gridlock. Establishing clear governance policies and encouraging open dialogue are essential.
Outdated Board Composition: The business environment is constantly evolving. Boards that fail to bring in fresh perspectives or adapt to industry shifts risk becoming ineffective. Periodic board evaluations and diversity initiatives can enhance governance.
Legal and Financial Risks Facing Boards
Board members must navigate various legal and financial risks. Failing to uphold fiduciary duties can lead to lawsuits, regulatory scrutiny, and financial losses. Understanding these risks is crucial to effective governance.
Director and Officer (D&O) Liability
Board members can be held personally liable for decisions that result in financial harm to the company or its shareholders, though the Business Judgment Rule is commonly a powerful shield. To further mitigate this risk, many companies purchase Directors and Officers (D&O) insurance, which protects individuals from personal financial losses due to lawsuits or claims against them in their capacity as board members. A director can also purchase a personal policy as additional protection.
However, D&O insurance policies do not cover fraud, criminal acts, or intentional misconduct. Board members must remain vigilant in their decision-making to avoid legal exposure.
Financial Oversight and Accountability
Strong financial governance is a cornerstone of board responsibilities. Directors must ensure accurate financial reporting, prevent fraudulent activities, and comply with regulatory requirements, though many that apply to public companies do not apply to privately owned companies.
Failing to meet these obligations can lead to SEC investigations, shareholder lawsuits, and reputational damage. Adopting internal controls, conducting regular financial audits, and requiring management accountability are essential practices for boards to prevent financial mismanagement.
Bankruptcy and Restructuring Considerations
If a company becomes financially distressed, board members must navigate complex restructuring decisions, including whether to file for Chapter 11 bankruptcy. This raises the oft-cited and equally oft-misunderstood ‘zone of insolvency.’ EDITORS’ NOTE: Read What To Do When Your Company May Be Insolvent for more information about this.
David Spitulnik explains that delaying restructuring efforts or failing to act prudently can expose board members to liability. Seeking expert legal and financial guidance is crucial when a company faces distress. Directors in financial distress must prioritize maximizing value for all stakeholders.
Best Practices for Effective Board Governance
Strong boards do more than fulfill legal requirements — they drive long-term value. Implementing best practices can significantly enhance a board’s effectiveness.
Regular Board Evaluations
Evaluating board performance through annual assessments helps identify areas for improvement.
Effective evaluations should consider:
Board composition and expertise
Meeting efficiency and decision-making processes
Director engagement and contributions
Clear Governance Policies
Establishing bylaws, conflict-of-interest policies, and codes of conduct ensures that board members adhere to best practices. Transparency in governance fosters trust among shareholders and stakeholders.
Ongoing Education and Development
Staying informed about changes in laws, financial regulations, and industry trends is essential for directors. Continuous education, such as attending governance training programs or legal briefings, ensures that board members remain effective in their roles.
Active Shareholder Engagement
For public companies, engaging with shareholders proactively helps build confidence and alignment between the board and investors. Boards that listen to shareholder concerns and maintain open communication reduce the risk of activist investor disruptions.
Conclusion
Serving on a board of directors carries significant legal, financial, and strategic responsibilities. Board members must navigate fiduciary duties, compliance requirements, financial oversight, and governance challenges while ensuring the company’s long-term success.
The best boards don’t just react to problems they anticipate them. Directors who stay informed, exercise sound judgment, and uphold ethical standards can make a lasting impact on their organizations.
Understanding these principles is essential for professionals considering board service or advising boards. A well-run board is not just a legal necessity — it is a strategic asset that drives corporate success.
To learn more about this topic view Board Of Directors Boot Camp / Roles & Responsibilities: a Primer. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists. Readers may also be interested in reading other articles about the roles, structures, and duties of a board of directors.
This article was originally published here.
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