In a landmark decision on June 28, 2024, the U.S. Supreme Court overturned the Chevron Deference, fundamentally altering the relationship between federal agencies and the courts. For nearly 40 years, the Chevron Deference let agencies like the Department of Labor (DOL) and Health and Human Services (HHS) interpret ambiguous statutes with significant leeway, so long as their interpretations were deemed reasonable. But now, in the case of Loper Bright Enterprises v. Raimondo, the Supreme Court decided that this deference to agency interpretation must come to an end.

So, what does this mean for you? If you’re involved in managing employee benefits, it’s a pretty big deal. Agencies have had a lot of power over the years, shaping the rules around benefits administration through their interpretations of laws like ERISA, COBRA, HIPAA, and the ACA. These laws, often complex and evolving, were subject to agency interpretation under Chevron, making compliance a complicated maze for plan sponsors and fiduciaries. But now, the courts are taking back that power. This shift could lead to a surge in litigation, challenging the rules set forth by agencies like the DOL and HHS, particularly when their interpretations of congressional intent are called into question.

For those of us dealing with employee benefits, this means we need to be on our toes. Sure, we still need to follow the guidance coming from agencies, but we also need to keep a close eye on what the courts are saying. Judges are now going to have more influence over what’s right and wrong when it comes to interpreting these laws, and that could lead to some big changes.

For now, sticking with what we know—following the current agency guidelines—is still the smart move. But we should also be ready for the possibility that some of those rules could be challenged and overturned in court. This Supreme Court decision might just be the start of a wave of legal and regulatory changes that could reshape the employee benefits landscape.

So, buckle up—it’s going to be interesting to see how this all plays out. We’ll keep you posted as things evolve, but for now, just know that the days of taking agency interpretations at face value are behind us. The courts are back in the driver’s seat, and that could mean big changes ahead for everyone involved in benefits administration.