On January 15, 2026, the U.S. Department of Labor's Employee Benefits Security Administration ("EBSA") unveiled its national enforcement projects for fiscal year 2026. Key areas of focus include cybersecurity, mental health and substance use disorder benefits, benefit distributions, retirement asset management, and surprise billing. Notably, EBSA removed employee stock ownership plans ("ESOPs") from its list of national enforcement projects for 2026.
Enforcement Priorities for FY 2026
EBSA's enforcement priorities for fiscal year 2026 will likely focus on plan operations, service provider oversight, and benefits administration. EBSA will continue to address cybersecurity risks to employee benefit plans, including governance practices and controls that safeguard plan assets and participants' information.
EBSA also identified barriers to substance use disorder benefits as an enforcement focus. Investigations are likely to target claims administration practices, network accuracy, and unreasonable treatment limitations. This project builds on EBSA's enforcement efforts under the federal mental health parity requirements of the Mental Health Parity and Addiction Act ("MHPAEA").
The surprise billing protections and other requirements under the No Surprises Act ("NSA") were also identified as enforcement priorities for EBSA. The agency will continue to focus on ensuring whether plans are correctly applying the prudent layperson standard for emergency service claims, rather than auto adjudicating and denying claims solely based on diagnosis codes. The agency will also focus on plan exclusions that deny emergency services, as identified in the 2021 surprise billing interim final rule. This enforcement project also includes reviewing plans for compliance with other NSA requirements such as ensuring that plans are applying the proper cost-sharing for items and services covered under the NSA surprise billing protections, making timely payments to providers consistent with the NSA requirements, and providing proper notices and disclosures under the NSA.
In addition, EBSA's investigations will prioritize protecting benefit distributions, with particular attention to delays, denials, or errors in processing payments to participants and beneficiaries. The agency will continue to examine fiduciary oversight of retirement plan assets, including whether fiduciaries have followed a prudent process in selecting and monitoring investments, evaluating fees and performance, and managing conflicts of interest consistent with ERISA's fiduciary standards. EBSA's 2026 priorities highlight an increased focus on investment strategies used in underfunded defined benefit plans, as well as a focus on 404(c) plans and whether fiduciaries followed reasonable processes when establishing the plan's investment line-up.
EBSA will further focus its attention on egregious misconduct involving contributory benefit plans, including embezzlement and fraud.
Separate from its designated national enforcement projects, EBSA will continue to examine Multiple Employer Welfare Arrangements ("MEWAs"), particularly arrangements marketed as ERISA plans that present funding, insolvency, or financial viability concerns.
Enforcement Areas De-Prioritized in FY 2026
EBSA's fiscal year 2026 enforcement priorities reflect a reallocation of investigative resources away from certain longstanding initiatives. These changes are best understood as affecting EBSA's enforcement focus rather than altering substantive requirements under ERISA.
EBSA added ESOPs as an enforcement priority in 2005 and began specifically targeting ESOP companies for increased scrutiny. This led to a material escalation in the number and scope of investigations, which often last for years and are burdensome to ESOP companies and trustees. Advocacy groups, ESOP sponsors, and ESOP service providers argued that this policy of "regulation by litigation" created a chilling effect on new ESOP formations and unfairly targeted ESOP fiduciaries, who were operating without formal, forward-looking guidance concerning the "adequate consideration" exemption governing ESOP transactions.
In an apparent recognition of these concerns, EBSA's revised enforcement priorities no longer include ESOPs. This change may not affect ongoing investigations, but it will likely mean fewer new ESOP investigations and lawsuits moving forward. It is also possible that EBSA will issue a regulation in the near term interpreting the "adequate consideration" exemption, which would give fiduciaries a roadmap for executing ESOP transactions in compliance with ERISA. These two changes—removing ESOPs as a national enforcement priority and issuing key regulatory guidance—would represent an end to EBSA's historical practice of "regulation by litigation" in the ESOP space.
EBSA also signaled that it will scale back its focus on missing participant investigations following the launch of the Retirement Savings Lost and Found Database. Although this change may reduce the frequency of missing participant inquiries, plan sponsors should continue to maintain reasonable procedures for locating participants and beneficiaries.
Key Takeaways
DOL investigations can pose significant challenges for plan sponsors, fiduciaries, and in some cases, service providers to ERISA plans, such as third-party administrators. The most important step for plan sponsors is to ensure that plan governance, procedures, and documentation are in order before any inquiry arises. Upon receiving notice of an EBSA investigation, promptly engage ERISA counsel to help manage the process and respond effectively.
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