FNREL Mineral and Energy Law Newsletter
Pennsylvania – Oil & Gas
(by Joe Reinhart, Sean McGovern, Matt Wood and Alex Graf)
On April 8, 2025, the Pennsylvania Environmental Quality Board (EQB) tabled consideration of the Clean Air Council (CAC) and Environmental Integrity Project’s (EIP) petition for a rulemaking seeking to amend 25 Pa. Code ch. 78a to increase required minimum setbacks from unconventional oil and gas wells from 500 feet to 3,281 feet. During the meeting, Public Utility Commission (PUC) Commissioner Kathryn Zerfuss moved to table the petition, stating that the members of the EQB need more time to consider materials submitted by industry members and others prior to the meeting, which the EQB approved. Tabling the petition followed a Pennsylvania Department of Environmental Protection (PADEP) presentation recommending that the EQB accept the petition for further study, with the caveat that the recommendation was not an indication of PADEP’s substantive position on the petition. See PowerPoint Presentation, PADEP, “Petition for Rulemaking: Unconventional Gas Well Setbacks” (Apr. 8, 2025). CAC and EIP also presented their argument for why the EQB should accept the petition for further study at the meeting, which largely focused on the positions taken in their petition regarding potential adverse health and environmental consequences to people and resources located near unconventional oil and gas wells.
Procedurally, an EQB member would have to motion to un-table the petition to advance the petition for consideration, which could occur at the earliest at EQB’s next regularly scheduled meeting, currently set for June 10, 2025. The April meeting featured much debate by the EQB as to the exact timeline of events if the petition is un-tabled and considered during the June meeting. Ultimately, if the petition is considered, the EQB will vote on whether the petition should be further studied by PADEP. The EQB may refuse to accept a petition for further study if it determines that the EQB has considered the issue in the past two years as part of a rulemaking, the requested action is currently in litigation or is not appropriate for rulemaking due to policy or regulatory considerations, or the petition involves an issue previously considered by the EQB and does not contain new or different information to warrant reconsideration. 25 Pa. Code § 23.5. If the EQB accepts the petition, notice of acceptance will be published in the Pennsylvania Bulletin within 30 days. Id. § 23.6.
Upon publication of the acceptance in the Pennsylvania Bulletin, PADEP has 60 days to prepare a report evaluating the petition, but may take additional time if necessary. Id. The report includes a recommendation on whether the EQB should approve the action requested in the petition. Id. This report must identify the anticipated date the EQB will consider a proposed rulemaking in the report if it contains any regulatory amendments. Id. CAC and EIP are entitled to receive the report and make comments that will inform PADEP’s ultimate recommendation. Id. §§ 23.7–.8. Following the report, if PADEP recommends regulatory amendments, it will prepare a proposed rulemaking within six months of sending the report to CAC and EIP. Id. § 23.8. If no regulatory amendments are recommended, PADEP will present at the EQB meeting at least 45 days after it mailed its report to CAC and EIP. Id.
CAC and EIP filed their petition on October 22, 2024. See Clean Air Council and Environmental Integrity Project Petition (Oct. 22, 2024) (Petition). To support their arguments, they cite to the 2020 43rd Statewide Investigating Grand Jury Report (43rd Grand Jury Report) published under then-Attorney General Josh Shapiro, now Governor, which concluded in part that the commonwealth “take action to expand the no-drill zone between fracking and homes from 500 to 2,500 feet and to adopt a more protective no-drill zone of 5,000 feet for schools and hospitals.” Petition at 2 (citing the 43rd Grand Jury Report at 93–94). The petition also alleges that people residing near unconventional oil and gas wells experience negative health consequences, that the wells release dangerous pollution, and that the wells contaminate surface and groundwater, and for these reasons, the EQB should increase minimum setbacks to protect public health and public resources. See generally id. On November 21, 2024, the Pennsylvania Department of Environmental Protection (PADEP) informed CAC and EIP that the petition complied with the EQB petition policy. Letter from PADEP (Nov. 21, 2024). Information and materials for the EQB’s June meeting will be posted to PADEP’s website.
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
FNREL Mineral and Energy Law Newsletter
Pennsylvania – Mining
(by Joe Reinhart, Sean McGovern, Christina Puhnaty and Ethan Johnson)
On February 15, 2025, the Pennsylvania Department of Environmental Protection (PADEP) announced that the inflation rate for calculating anthracite and bituminous coal and industrial mineral mining water supply operation and maintenance bond amounts for replacement water supplies will be 3.80% and the interest rate for the 20-year Treasury bill will be 3.08%. 55 Pa. Bull. 1603 (Feb. 15, 2025). The rates became effective on April 1, 2025, and will be in effect until the new rates are published in February 2026.
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
FNREL Mineral and Energy Law Newsletter
Pennsylvania – Mining
(by Joe Reinhart, Sean McGovern, Christina Puhnaty and Ethan Johnson)
In a February 25, 2025, Mining and Reclamation Advisory Board and Aggregate Advisory Board Joint Regulation, Legislation, and Technical Committee Meeting, the Pennsylvania Department of Environmental Protection (PADEP) presented its plans to rescind two technical guidance documents (TGDs) and revise two others due to the TGDs being inaccurate and out of date after changes to Pennsylvania’s coal regulations and noncoal regulations. See PowerPoint Presentation, PADEP, “Water Supply Replacement TGDs” (Feb. 25, 2025).
PADEP plans to rescind its Water Supply Replacement and Permitting TGD (TGD 562-4000-101) but to convert some of its sections into standard operating procedures. PADEP also plans to rescind the Insurance Requirements and Water Supply Replacement Assurance TGD (TGD 562-2500-702) due to its inaccuracy following PADEP’s 2023 revisions to 25 Pa. Code ch. 77 regarding liability insurance rates. Any information still needed from the WSR and Permitting TGD and the Insurance Requirements and Water Supply Replacement Assurance TGD will be incorporated into a revised Water Supply Replacement and Compliance TGD (TGD 563-2112-605).
PADEP plans to make minor revisions to its Increased Operation and Maintenance Costs of Replacement Water Supplies (on All Coal and Surface Noncoal Sites) TGD (TGD 562-4000-102). PADEP will also revise its Water Supply Replacement and Compliance TGD (TGD 563-2112-605), which PADEP will rename as Water Supply Replacement, Permitting, and Compliance. In the revised TGD, PADEP will incorporate background information from the rescinded Water Supply Replacement and Permitting TGD (TGD 562-4000-101), remove requirements that are now in regulations, remove attached forms, and include relevant information from the rescinded Insurance Requirements and Water Supply Replacement Assurance TGD (TGD 562-2500-702). PADEP also announced its intention to remove statements regarding de minimis maintenance or treatment costs, which are no longer addressed in 25 Pa. Code chs. 87 and 88.
PADEP expects the revised TGDs to be published for public comment in fall 2025. PADEP’s mining TGDs are available here.
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
FNREL Mineral and Energy Law Newsletter
Pennsylvania – Mining
(by Joe Reinhart, Sean McGovern, Christina Puhnaty and Ethan Johnson)
The Pennsylvania Department of Environmental Protection (PADEP), on March 22, 2025, announced the 2025 land reclamation bond rate guidelines for coal mining operations, and on March 29, 2025, announced the land reclamation bond schedule for noncoal mining operations. The coal mining operations bond rate guidelines became effective on April 1, 2025, and are available at 55 Pa. Bull. 2392 (Mar. 22, 2025). The noncoal mining operations bond schedule became effective March 29, 2025, and is available at 55 Pa. Bull. 2576 (Mar. 29, 2025).
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
FNREL Mineral and Energy Law Newsletter
Pennsylvania – Oil & Gas
(by Joe Reinhart, Sean McGovern, Matt Wood and Alex Graf)
On February 26, 2025, the Pennsylvania Department of Environmental Protection (PADEP) announced it had begun accepting grant applications for the Reducing Industrial Sector Emissions in Pennsylvania (RISE PA) Program. See Press Release, PADEP, “Shapiro Administration Launches RISE PA Initiative to Create Energy Jobs, Cut Costs, Grow Pennsylvania’s Energy & Manufacturing Industries, and Lower Toxic Air Pollution” (Feb. 26, 2025). The RISE PA Program is funded by a $396-million award under the 2022 Inflation Reduction Act for projects that will reduce carbon emissions from the industrial sector, including from fuel combustion, industrial process emissions, natural gas and oil systems, coal mining, and other electricity usage.
As previously reported in Vol. 42, No. 1 (2025) of this Newsletter, President Trump’s Executive Order No. 14,154, “Unleashing American Energy,” created uncertainty around RISE PA’s future by pausing clean energy and climate-related funding under the Inflation Reduction Act. Exec. Order No. 14,154, § 7, 90 Fed. Reg. 8353 (Jan. 20, 2025). The Shapiro administration, however, sued the federal government and the funds were unfrozen on February 24, 2025.
The RISE PA Program awards are tiered based on project size: up to $40 million for small-scale projects; up to $100 million for medium-size projects; and up to $220 million for large-scale projects. Small-scale awards are administered by the Pennsylvania Technical Assistance Program (PennTAP), while medium- and large-scale awards are administered by PADEP.
The Shapiro administration offered examples of eligible projects, including, “installing energy-efficient heat recovery systems to reduce the energy required to heat or cool an industrial facility, electrifying an industrial plant by swapping out diesel-powered generators with equipment that runs on electricity, and capturing coal mine methane from mining operations.” Press Release, supra. The program also includes bonus award opportunities based on taking one or more additional actions and depending on the size of the project. These include a Community Benefits Bonus (for projects in low-income and disadvantaged communities that include a Community Benefits Plan; up to 10% of total project cost), a Fair Labor Bonus (committing to one or more labor-related requirements, based on project size; up to 10% of total project cost), and a GHG Emissions Reduction Bonus (available to medium- and large-scale projects based on the percentage reduction of GHG emissions; up to 10% of total project cost).
The RISE PA website includes step-by-step instructions for applying online, mock project application answers and budgets, and other guidance to assist applicants, as well as a form to submit public feedback about the program. PADEP is currently accepting applications for medium- and large-scale projects, with an application deadline of August 29, 2025, and first award announcements in fall 2025. All projects must be completed by April 1, 2029.
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
FNREL Mineral and Energy Law Newsletter
Pennsylvania – Oil & Gas
(by Joe Reinhart, Sean McGovern, Matt Wood and Alex Graf)
On March 31, 2025, the Pennsylvania Department of Environmental Protection (PADEP) entered a settlement agreement with the Pennsylvania Independent Oil & Gas Association (PIOGA), PA Independent Petroleum Producers (PIPP), and PA Grade Crude Oil Coalition (PGCC) (collectively, Petitioners) pertaining to the Control of VOC Emissions from Conventional Oil and Natural Gas Sources pursuant to 25 Pa. Code ch. 129.
The settlement arises out of a December 5, 2022, petition for review of the emergency-certified final-omitted Control of VOC Emissions from Conventional Oil and Natural Gas Sources by the Petitioners in the Commonwealth Court of Pennsylvania. PIOGA, PIPP and PGCC Petition (Dec. 5, 2022) (Petition). Petitioners challenged the rule on the grounds that (1) the regulation did not meet the requirements to be issued as a final omitted rulemaking; and (2) PADEP did not develop the regulation for conventional oil and gas wells separately and independently from those regulations developed for unconventional oil and gas wells, as required by Act 52 of 2016. The rule was adopted by the Environmental Quality Board (EQB) through an emergency certified final-omitted rulemaking approved by the Governor, without notice and comment, which adopted reasonable available control technology standards (RACT) to control volatile organic compound (VOC) and methane emissions from existing and future conventional oil and gas operations and unconventional oil and gas operations, respectively. PADEP contended that the emergency certified final-omitted rulemaking process was appropriate pursuant to the PA Commonwealth Documents Law because notice and comment from the public was unnecessary, impractical, and contrary to the public interest.
In resolution of the petition for review of the rule, the parties agreed to a settlement that stipulates that for the leak detection and repair (LDAR) monitoring threshold, a separate tank battery surface site is not aggregated with the well or wells that supply the tank battery. See PIOGA v. DEP Settlement Agreement FAQ (Mar. 31, 2025). Further, if the well that supplies the separate tank battery surface site is subject to LDAR on its own due to the barrel of oil equivalent produced per day, the separate tank battery surface site is not automatically also subject to LDAR. PADEP did not conduct a separate RACT analysis for a conventional oil and gas separate tank battery surface site. LDAR will be required at a separate tank battery site if: (1) the separate tank battery surface site receives more than 15 barrels of oil or the equivalent amount of natural gas per day, and (2) one or more of the wells supplying the separate tank battery surface site produced five or more barrels of oil or the equivalent amount of natural gas per day.
Additionally, the settlement explains how PADEP calculated the 2.7 tons per year trigger for controlling VOC emissions from a storage vessel and states that VOC recovery and control requirements are not impacted by the number of wells connected to a particular tank. The recovery requirement is not impacted by how much methane is emitted from a tank, it instead relates to the collection of VOC emissions. VOC recovery and control requirements are also not impacted by the number of wells connected to a particular tank. The settlement also requires that for 10 years, rulemakings under the Air Pollution Control Act, 35 Pa. Stat. §§ 4001–4106, concerning conventional oil and gas well operations shall be undertaken separately and independently from unconventional wells.
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
FNREL Mineral and Energy Law Newsletter
Pennsylvania – Oil & Gas
(by Joe Reinhart, Sean McGovern, Matt Wood and Alex Graf)
On January 14, 2025, the Pennsylvania Department of Environmental Protection (PADEP) launched a new webpage to track the progress of permit applications. See Commw. of Pa., “Track Your Permit Application” here (Permit Tracker). The Permit Tracker allows interested parties to search permits by program area (e.g., oil and gas, by county, permit type, and other details). Applicants can also check the status of a permit application, including which step of the review process the permit is in, the target date for completing that step, and contact information for the permit reviewer.
According to an accompanying press release, PADEP co-developed the Permit Tracker with the Commonwealth Office of Digital Experience (CODE PA) to modernize the permitting process, and in response to requests from the business community. Press Release, PADEP, “Shapiro Administration Launches New Permit Tracker; Businesses Applying for DEP Permits Can Now See Progress in Real-Time” (Jan. 16, 2025). PADEP said that it continues the agency’s “commitment to transparency and improving the user experience for applicants working with us to build a better Pennsylvania.” Id. In addition to PADEP’s efforts to reduce its permit application backlogs, the agency said the Shapiro administration has been hiring staff to improve operational efficiency. Id.
Implementation of the Permit Tracker follows CODE PA’s October 2024 launch of another website to educate stakeholders about state grant opportunities and assist applicants through the application process. That tool, available here, covers multiple grant categories, including energy and oil and gas. More information about CODE PA’s other efforts can be found on its website here.
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
FNREL Mineral and Energy Law Newsletter
Pennsylvania – Oil & Gas
(by Joe Reinhart, Sean McGovern, Matt Wood and Alex Graf)
On April 5, 2025, the Pennsylvania Department of Environmental Protection (PADEP) issued the General Plan Approval and/or General Operating Permit for Gaseous Fuel-Fired Spark Ignition Internal Combustion Engines (BAQ-GPA/GP-16). 55 Pa. Bull. 2680 (Apr. 5, 2025).
A General Permit is a plan approval and operating permit for a specific category of sources that PADEP has determined can be adequately regulated under standardized conditions. Section 6.1(f) of the Air Pollution Control Act (35 Pa. Stat § 4006.1(f)) and 25 Pa. Code ch. 127, subch. H (relating to general plan approvals and operating permits) authorize PADEP to develop General Permits.
PADEP is also authorized to require new sources to control air pollution through the use of best available technology (BAT) under section 6.6 of the Air Pollution Control Act. In developing General Permits, PADEP establishes BAT for new sources, which can include equipment, devices, methods, or techniques to control air emissions to the maximum degree possible utilizing technologies that are available or may be made available. 25 Pa. Code § 121.1.
GP-16 sets BAT emission limits for certain new gaseous fuel-fired spark ignition internal combustion engines that are more stringent than the applicable New Source Performance Standards for these engines in 40 C.F.R. pt. 60, subpt. JJJJ, and 40 C.F.R. pt. 63, subpt. ZZZZ. GP-16 includes standardized requirements related to BAT and additional terms including recordkeeping and reporting requirements, a compliance certification, source testing requirements, and compliance with applicable New Source Performance Standards. The use of the GP-16 is restricted to facilities that are minor sources.
Prior to the issuance of this General Permit, sources seeking to install and operate spark ignition engines were either required to meet certain exemption criteria or go through the full plan approval process to permit these sources. GP-16 will streamline the permitting process for owners and operators who wish to install spark ignition engines at their facilities in Pennsylvania.
A copy of the General Permit, application instructions, the comment and response document, and technical support document can be found on PADEP’s website here.
Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
West Virginia Executive
(by Moore Capito)
As the “backbone” of digital infrastructure, data centers are becoming more and more critical in meeting the demands of the modern digital world. With advances in artificial intelligence (AI) and the increased reliance on computing by people all over the world, demand for data centers is outpacing supply.
We are in a global modern-day gold rush to build data centers. And just as the 49ers faced infrastructure challenges of the day, data center developers are facing a critical infrastructure obstacle: energy.
A data center is a physical facility that houses servers that manage, store, and process data. There are several types of data centers, and while all do not require the same prerequisites to develop, they all require vast amounts of electricity. According to the United States Department of Energy, data centers account for two percent of the electricity usage in the country consuming 10 to 50 times more electricity per floor space than a typical commercial structure.
The electricity required to power data centers is adding stress on grids that are already pushing the limits. Utilities are having difficulty guaranteeing the level of power required to sustain current demand and meet projected future demand. As a result, developers are evaluating alternative ways to power their projects.
Recently, Amazon Web Services (AWS) purchased Talen Energy’s 1,200 acre data center campus which provides direct power from the Susquehanna Steam Electric Station. Tech companies and developers are no longer waiting on the utilities and are trending toward establishing dedicated power sources. This trend provides energy rich states an incredible opportunity.
Energy companies are actively exploring how to provide direct power ranging from laying additional pipelines to evaluating construction of new power plants dedicated to powering data centers. As evidenced by the recent energy deals, states like West Virginia offer an attractive proposition to data center developers – access to vast amounts of energy sources. Additionally, West Virginia boasts incredible research and development institutions, including West Virginia University and Marshall University. As a result, this region is well positioned to be the next hub for data center development.
Of course, there are challenges. Navigating the regulatory environment, finding suitable property, and identifying partners with available energy supply are just a few. Our firm, Babst Calland, specializes in environmental, energy, and emerging technologies law. As such, we are perfectly situated to connect those pieces because we understand each geographic footprint and tailor legal strategies accordingly, with a deep knowledge of state regulation and local jurisdictions. We provide the cross-disciplinary legal team to address these challenges and support regional and national data center projects.
The demand for data centers is growing and projected to grow even faster. We know the greatest challenge is meeting the electricity requirements. West Virginia has an abundant supply of natural resources, affordable land, artificial intelligence research and development, and proximity to densely populated areas. Now is the time to leverage those strengths. If we do so, our region is poised to benefit greatly from this rush for data centers.
With increased demand for complex data center development, whether navigating potential legal challenges related to financing, project siting, land acquisition, zoning, or regulatory compliance, Babst Calland is prepared to address the region’s most pressing concerns.
Moore Capito is a shareholder in the Corporate and Commercial, Emerging Technologies, and Energy and Natural Resources groups of Babst Calland. He has substantial experience in all phases of complex corporate, commercial and real estate transactions. He routinely counsels clients in entity, joint venture and partnership structuring and formation, and general business matters. For more information, please contact Moore Capito at (681) 205-8953 or mcapito@babstcalland.com or visit babstcalland.com.
Reprinted with permission from the Spring 2025 edition of WV Executive.
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TEQ Hub
(by Kristen Petrina)
On May 19, 2025, President Trump signed into the law the “TAKE IT DOWN Act (the “Act”). The Act includes data privacy, digital protections, and AI governance requirements of companies to remove deepfakes from “covered platforms”, particularly with a focus on nonconsensual intimate imagery (“NCII”).
The Act, whose acronym stands for “Tools to Address Known Exploitation by Immobilizing Technological Deepfakes on Websites and Networks Act” includes both criminal and civil elements; however, it does not create a new private right of action, rather provides the Federal Trade Commission with the enforcement authority over failures to comply with the notice and removal obligations, which would constitute an unfair or deceptive act or practice under the Federal Trade Commission Act.
Criminal and Civil Liability
The Act criminalizes the publication of an authentic or computer-generated NCII and outlines penalties for when the images of “intimate visual depiction” as defined in 15 USC 6851(5)(A), of an adult or minor and imposes new obligations on social media and online platforms to respond to requests to promptly remove unlawful NCII. Synthetic or computer-generated NCII, includes the term “digital forgery” meaning “any intimate visual depictions of an identifiable individual created through the use of software, machine learning, artificial intelligence, or any other computer generated or technological means, including by adapting, modifying, manipulating, or altering an authentic visual depiction, that, when viewed as a whole by a reasonable person, is indistinguishable from an authentic visual depiction of the individual.” An identifiable individual includes someone “(i) who appears in whole or in part in an intimate visual depiction; and (ii) whose face, likeness, or other distinguishing characteristic (including a unique birthmark or other recognizable feature) is displayed in connection with such intimate visual depiction.”
Criminal Liability for “Knowingly” Publishing NCII
- Involving Adults. The Act prohibits the use of an interactive computer service to knowingly publish an intimate visual depiction of an adult identifiable individual, who is not a minor, if (i) the intimate visual depiction was obtained or created under circumstances in which the person knew or reasonably should have known the identifiable individual had a reasonably expectation of privacy; (ii) what is depicted was not voluntarily exposed by the identifiable individual in a public or commercial setting; (iii) what is depicted is not a matter of public concern; and (iv) publication of the intimate visual depiction is intended to cause harm or causes harm, including psychological, financial or reputational harm, to the identifiable individual. For synthetic or computer-generated digital forgeries, the test is similar, except to establish criminal liability, the depiction would have to be published without consent of the identified individual.
- Involving Minors. Under the Act, NCII involving minors, defined as anyone under the age of 18 years, sets forth stricter prohibitions making it unlawful to publish NCII of an identifiable individual who is a minor with the intent to (i) abuse, humiliate, harass, or degrade the minor; or (ii) arouse or gratify the sexual desire of any person.
- Consent, Disclosure and Disclosure Exceptions. The Act recognizes that the consent to create an image is not the same as consent to publication, stating that the fact that (i) an identifiable individual providing consent for the creation of an image; or (ii) the identifiable individual disclosure of the intimate visual depiction to another individual does not establish or constitute consent to publication. However, certain exceptions apply to allow for disclosure to law enforcement, professional obligation reporting requirements, or publication of an individual’s own images.
Civil Liability for Failure to Comply with Notice and Removal Requirements
The criminal provisions of the law went into effect immediately, the Act provides, “covered platforms” a year after the date the law went into effect, to develop a process for notice and removal of NCII identified from their platforms within 48 hours of receiving a valid request from an identifiable individual or someone authorized to act on the individual’s behalf. A covered platform means “a website, online service, online application, or mobile application that (i) serves the public or (ii) for which it is the regular course of business of trade or business of the website, online service, online application, or mobile application to publish, curate, host or make available content of nonconsensual intimate visual depictions.” Covered platforms do not include ISPs, email providers, online services that consist primarily of not user generated content, or services for which chat, comment or interactive functionality is directly related to the provision of not user generated content.
A covered platform must provide a clear, easy to understand and conspicuous policy which shall include valid removal request requirements, how to submit a removal request and the removal responsibilities of the platform. A valid removal request must be in writing, with a physical or electronic signature, and include (i) enough information to locate the depiction; (ii) a statement of the individuals’ good faith belief that the depiction was not consensual; and (iii) the requester’s contact information.
Within 48 hours of a valid removal request, the covered platform must remove the intimate visual depiction and make reasonable efforts to identify and remove any known identical copies of such depiction.
The Act gives covered platforms liability protections from claims from content posters based on the covered platforms good faith removal, disabling access to, or removal of, material claimed to be NCII, regardless of whether the intimate visual depiction is ultimately determined to be unlawful or not.
Covered Platform Next Steps
While the removal obligations will not take effect until May of 2026, covered platforms face significant obligations to confirm compliance. Knowledge of the Act allows companies to develop a business model to aid in immediate removal of NCIIs as it must occur with 48 hours. Therefore, companies that host user generated content, should prepare to take the following steps to determine if and how they would need to comply:
- Determine if you or your company would be a covered platform.
- Determine whether your company has enough resources, proper operating and escalation procedures, and training to implement the Act’s requirements.
- Establish a notice process and policy.
- Review your data privacy, AI, cybersecurity, document retention and digital governance policies.
- Consider engaging professional support to confirm that your company is prepared to comply with the Act’s requirements.
Kristen Petrina is an associate in the Corporate and Commercial and Emerging Technologies groups of Babst Calland. She represents domestic and international clients on a broad range of general corporate and commercial law matters and advises businesses on data privacy and protection and security compliance.
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Environmental Alert
(Sloane Wildman and Jessica Deyoe)
On May 14, 2025, less than three weeks after the U.S. Environmental Protection Agency (EPA) released its strategy to address per and polyfluoroalkyl substances (PFAS), the EPA announced its intent to retain the existing drinking water standards for the two most common PFAS (perfluorooctanoic acid (PFOA) and perfluorooctane (PFOS)). At the same time, EPA stated it would rescind and “reconsider” the regulation of the four other PFAS compounds included in the previous rule (perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), perfluorohexane sulfonic acid (PFHxS) and perfluorobutane sulfonic acid (PFBS)). For more information on the prior rule, see our April 2024 Alert, available here and for more information on EPA’s strategy to address PFAS, see our April 2025 Alert, available here.
In addition to limiting the number of PFAS compounds subject to regulation under the Safe Drinking Water Act, EPA stated it would extend compliance deadlines for PFOA and PFOS from 2029 to 2031, create a framework for federal exemptions for passive receivers of PFAS (consistent with its goal to “hold polluters accountable”), and establish a new “PFAS OUTreach Initiative” (PFAS OUT). According to EPA Administrator Lee Zeldin, with its particular emphasis on water systems in rural and small communities, PFAS OUT will “connect with every public water utility known to need capital improvements to address PFAS in their systems” by sharing resources, tools, funding, and technical assistance to help utilities meet the federal drinking water standards.
Babst Calland’s Environmental Practice Group is closely tracking EPA’s PFAS actions, and our attorneys are available to provide strategic advice on how developing PFAS regulations may affect your business. For more information or answers to questions, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com, Jessica Lynn Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com, or your Babst Calland relationship attorney.
Environmental Alert
(by Sloane Wildman, Jessica Deyoe and Ethan Johnson)
On April 28, 2025, U.S. Environmental Protection Agency Administrator Lee Zeldin announced “major EPA actions to combat PFAS contamination.” Few details have been provided yet, but in emphasizing EPA’s goals in “strengthening the science,” “fulfilling statutory obligations and improving communication,” and “building partnerships” with states and Tribes, EPA signals that it may take a different regulatory approach to PFAS (per- and polyfluoroalkyl substances) than the prior administration.
The announcement does not expressly discuss the two major PFAS regulatory actions from the Biden administration – the designation of two PFAS compounds as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the promulgation of enforceable Maximum Contaminant Levels (MCLs) and non-enforceable health-based Maximum Contaminant Level Goals (MCLGs) for six PFAS compounds under the Safe Drinking Water Act (SDWA). Both rules are currently subject to judicial challenges (CERCLA challenge opening brief here; SDWA challenge opening brief here). However, in an implicit acknowledgment of concerns regarding the CERCLA rule raised by “passive receivers” of PFAS, including water utilities, EPA states that it will work with Congress and industry to establish a liability framework that operates on a “polluter pays” principle, to provide “certainty” to these passive receivers. This will require Congressional action, as only Congress, and not EPA, has the authority to shield passive receivers such as local water utilities from CERCLA liability.
The announcement further suggests EPA may take a more industry-friendly approach with respect to some of the proposed PFAS actions that were initiated during the Biden administration. For example, while it does not expressly reference regulations proposed under the Resource Conservation and Recovery Act (RCRA) to add 9 PFAS (including their salts and structural isomers) to the list of “hazardous constituents” in Appendix VIII of 40 C.F.R. Part 261 and to clarify that emerging contaminants – including PFAS – can be addressed under RCRA’s Corrective Action Program, EPA states that it will determine how to “better use RCRA” to address releases. EPA’s announcement also references the development of Effluent Limitations Guidelines (ELGs) under the Clean Water Act for PFAS manufacturers and metal finishers, and the evaluation of whether ELGs are necessary for other industries but does not provide concrete plans for such regulatory developments.
EPA’s announcement does not provide a timeline for any of its intended PFAS actions, and it is unclear how quickly EPA expects to implement them.
The full list of PFAS actions included in EPA’s announcement is below. EPA also stated that this list “is the first, not the last, of all decisions and actions EPA will be taking to address PFAS over the course of the Trump administration.”
Strengthening the Science
- Designate an agency lead for PFAS to better align and manage PFAS efforts across agency programs
- Implement a PFAS testing strategy under Toxic Substances Control Act (TSCA) Section 4 to seek scientific information informed by hazard characteristics and exposure pathways
- Launch additional efforts on air related PFAS information collection and measurement techniques related to air emissions
- Identify and address available information gaps where not all PFAS can be measured and controlled
- Provide more frequent updates to the PFAS Destruction and Disposal Guidance—changing from every three years to annually—as EPA continues to assess the effectiveness of available treatment technologies
- Ramp up the development of testing methods to improve detection and strategies to address PFAS
Fulfilling Statutory Obligations and Enhancing Communication
- Develop effluent limitations guidelines (ELGs) for PFAS manufacturers and metal finishers and evaluate other ELGs necessary for reduction of PFAS discharges
- Address the most significant compliance challenges and requests from Congress and drinking water systems related to national primary drinking water regulations for certain PFAS
- Determine how to better use RCRA authorities to address releases from manufacturing operations of both producers and users of PFAS
- Add PFAS to the Toxic Release Inventory (TRI) in line with Congressional direction from the 2020 National Defense Authorization Act
- Enforce Clean Water Act and TSCA limitations on PFAS use and release to prevent further contamination
- Use Safe Drinking Water Act authority to investigate and address immediate endangerment
- Achieve more effective outcomes by prioritizing risk-based review of new and existing PFAS chemicals
- Implement section 8(a)7 to smartly collect necessary information, as Congress envisioned and consistent with TSCA, without overburdening small businesses and article importers
- Work with Congress and industry to establish a clear liability framework that operates on polluter pays and protects passive receivers
Building Partnerships
- Advance remediation and cleanup efforts where drinking water supplies are impacted by PFAS contamination
- Work with states to assess risks from PFAS contamination and the development of analytical and risk assessment tools
- Finish public comment period for biosolids risk assessment and determine path forward based on comments
- Provide assistance to states and tribes on enforcement efforts
- Review and evaluate any pending state air petitions
- Resource and support investigations into violations to hold polluters accountable
Babst Calland’s Environmental Practice Group is closely tracking EPA’s PFAS actions, and our attorneys are available to provide strategic advice on how developing PFAS regulations may affect your business. For more information or answers to questions, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com, Jessica Lynn Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com, Ethan Johnson at (202) 853-3465 or ejohnson@babstcalland.com, or your Babst Calland relationship attorney.
The Legal Intelligencer
(by Michael Korns and Anna Jewart)
Pennsylvania municipalities are empowered not only to adopt ordinances and enforce them but to establish fines and penalties for violations of the same. However, municipalities are creatures of statute and authorized only to act within the bounds of the powers granted to them by the General Assembly. The various municipal enabling statutes, such as the First Class Township Code, as well as other statutes such as the Pennsylvania Municipalities Planning Code, all include express authorizations for municipalities to prescribe fines and penalties for violations of municipal ordinances and also establish restrictions on the upper limits of those fines or civil penalties per violation. Typically, these statutes also expressly establish that a municipality may, by ordinance, provide that a separate violation shall arise for each day of violation and for each applicable section of the ordinance. Consequently, municipalities, generally, are permitted to seek cumulative fines which grow each day a violation persists. Both the Pennsylvania State Constitution, article I, section 13, PA. CONST. art. I §13, and the Eighth Amendment of the United States Constitution, U.S. CONST. amend. VIII, (as made applicable to the states through the Fourteenth Amendment, U.S. CONST. amend. XIV) prohibit excessive fines, providing in relevant part that “[e]xcessive bail shall not be required, nor excessive fines imposed…” On April 2, 2025, the Commonwealth Court explored whether a cumulative municipal fine imposed under the Philadelphia Code, as authorized by the First Class City Home Rule Act, 53 P.S. §13101 et seq., was unconstitutionally excessive.
In City of Philadelphia v. Epstein, No. 515 C.D. 2024, 2025 WL 981892 (Pa. Cmwlth. April 2, 2025)[1] the Court reviewed the outcome of a longstanding enforcement action by the City of Philadelphia originating from a 2018 enforcement notice and 2019 complaint seeking a permanent injunction and fines regarding violations of the City Code. An order of the Court of Common Pleas of Philadelphia County directed remedial action and indicated that a $2,300 daily fine would be imposed if the defendant did not comply with the order, beginning to accumulate on April 7, 2020. During the course of proceedings prolonged due to the COVID-19 pandemic, defendant failed to remedy the violations originally cited by the City. On February 6, 2023, the common pleas court issued a final order which assessed a statutory fine of $65,333.33 but noted that the total statutory amount of accrued fines to which the City was entitled (as of November 8, 2022) was $3,456,900.00. The defendant filed a post-trial motion seeking a reduction of the statutory fine, in part, on the grounds that it was excessive and punitive in violation of the First Class City Home Rule Act, the Pennsylvania State Constitution, and the Eighth Amendment of the U.S. Constitution. The common pleas court denied the motion, and the defendant appealed to the Commonwealth Court.
Section 17 of the Home Rule Act and the City Home Rule Charter both authorized the city to impose fines and penalties for violation of City ordinances “not exceeding … $2,300…”. The Home Rule Act further provides that “a city of the first class may increase any fine… or penalty… provided that the increase does not exceed… $400… in any calendar year and the total amount of the fine…or penalty does not exceed two thousand dollars.” The defendant alleged that the City could only seek a maximum fine of $2,300 for each of the violations issued against the property plus a $400 increase per year, amounting to a total of $7,800 maximum. She also argued that regardless, the fine imposed was excessive and punitive, in part because she had trusted her now estranged husband to bring the property into compliance. The City countered that the Court had already rejected the argument that the Home Rule Act and City’s Home Rule Charter capped fines at $2,300 per violation plus $400 per year in City of Philadelphia v. Neely, No. 480 C.D. 2022 (Pa. Cmwlth. Mar. 25, 2024), and that the City was statutorily authorized to impose daily fines. It further argued that the $65,000 fine at issue was not violative of the constitutional restrictions on excessive fines.
The Court first reviewed the relevant statutory authority applicable to Philadelphia, as well as the City Code, noting that it expressly states that “[e]ach day that a violation continues after issuance of a notice or order shall be deemed a separate offense.” The defendant argued that this provision conflicts with the Home Rule Act and Home Rule Charter, but the Court disagreed. It concluded the plain language of the Act and Charter did not prohibit the imposition of a fine or penalty for each offense as defined by the Code. Further, while Section 17 of the Act limited the penalty the City may impose for each individual violation, it did not limit the City’s ability to define what constitutes a violation or offense through an ordinance. As the Court stated, the objective behind cumulative fines for each day a property remains in violation is to encourage property owners to expeditiously remedy ongoing violations, and for those reasons, the Court has generally upheld cumulative or aggregate assessments for continuing violations that remain uncorrected for extended periods. It therefore refused to overturn the imposition of the fine by the common pleas court on those grounds, noting the 1,503 day period over which the defendant had failed to correct the relevant violations.
The Court then turned to the topic of more interest to the remainder of the state – the impact of the Excessive Fines Clauses of the Pennsylvania and U.S. Constitution, which limits the government’s powers to extract payments as punishment for an offense. The Court noted that since fines serve not only as a punishment but as a deterrent, the amount of a fine can be raised to whatever sum is necessary to discourage future or continued violations, subject to any restriction imposed on the amount of the fine by the enabling statute or the Constitution. There need not be strict proportionality between the harm resulting from the offense and the penalty imposed, but a fine may be deemed unconstitutionally excessive where the amount is so great as itself to be confiscatory and beyond the bounds of all reason and justice. Defendant argued that the fine was grossly excessive and disproportionate to the wrong committed as well as to the value of the property, and that the property owner would be unable to pay the fine. The Court rejected these arguments, noting that neither the value of the noncompliant property nor the inability to pay are factors in determining if a fine is unconstitutionally excessive. The Court reasoned that the fine imposed was the result of ongoing violations for a 1,503-day period and fell within the statutory parameters of the Code. Finally, comparing the statutory maximum ($3,345,900) to the fine imposed, the Court noted that the common pleas court had provided a 98% reduction which it found to be a “lenient sum” in comparison. The Court therefore agreed with the court of common pleas that the fine was not unconstitutionally excessive.
As with any other authority, the power of a municipality to seek fines and penalties is not only limited by the state statute that authorizes it but confined by the protections of the state and U.S. Constitution. The Court’s decision in Epstein suggests that constitutional limits will not automatically serve to disrupt cumulative fines that are otherwise levied within the boundaries of state law and perceived to be in furtherance of the dual goals of punishment and deterrence.
Michael T. Korns is senior counsel in the public sector, and energy and natural resources groups of Babst Calland. Anna S. Jewart is an associate in the public sector, and energy and natural resources groups of Babst Calland and focuses her practice on land use, zoning, and general municipal matters.
To view the full article, click here.
Reprinted with permission from the April 24, 2025 edition of The Legal Intelligencer© 2025 ALM Media Properties, LLC. All rights reserved.
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[1] Opinion reported and pending official citation.
TEQ Hub
(by Jenn Malik and Anna Hosack)
Regardless of party affiliation, the one issue that most Americans seem to be able to agree about in 2025 is that we all are sick of our healthcare system. Healthcare reform is no stranger to the American political discourse, but recent public sentiment at the expense, difficulty, and confusion inherent in navigating the American healthcare is at an all-time low. Americans’ dissatisfaction with the current state of the healthcare industry is unsurprising when between 2008 and 2022, the per enrollee cost of private health insurance has grown by 61.6% according to a study by the Kaiser Family Foundation.¹ Despite rising costs, rates for denials of coverage have increased nationally with a current average of around 19%.² Add to these statistics the change of administration and corresponding anticipated changes in healthcare benefits policy, along with increased litigation against Plan Sponsors reminiscent of the retirement plan litigation in the late 2000s, and we are all left scratching our heads with how to provide healthcare coverage to employees at an affordable cost – especially when, according to a recent study by Forbes, two-thirds (2/3) of American employees name employer-covered healthcare as the most important benefit in considering whether to take a job.³ Below are key issues for employers to watch in the healthcare benefits space this year to guide in planning your organization’s healthcare benefits and to budget accordingly:
Challenge to Affordable Care Act’s Preventive Care Coverage
Currently, the Patient Protection and Affordable Care Act (ACA), also known as Obamacare, mandates that most health insurance plans must cover certain preventive services at no cost share to patients.⁴ These services include benefits such as an annual wellness visit, maternity care, STD testing, certain immunizations for adults and children, cancer screenings, and well-baby/well-child visits.⁵ The United States Preventive Services Task Force (USPSTF)⁶, the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP) are various agencies tasked with recommending what benefits must be covered at no cost share under the preventive care mandate.⁷ Proponents of the mandate argue that covering these benefits at no cost-share leads to earlier detection of serious medical conditions, earlier medical intervention, and more positive patient outcomes which can decrease the number of high-cost claims in the population and deter costs, while critics oppose the increased costs to employers/plan sponsors and may also oppose certain preventive services on religious grounds, such as the requirement to cover pre-exposure prophylaxis for HIV (PrEP) or birth control.
This April, SCOTUS is set to hear a challenge brought by Braidwood Management, Inc., and other employers to the mandate on the basis that the USPSTF, in its role as an administrative body that recommends what services are covered at no cost share, are “principal officers” who must be nominated by the U.S. President and confirmed by the Senate in accordance with the Constitution’s Appointment’s Clause.⁸ These employers also challenged the mandate on religious grounds, arguing that the ACA’s requirement that plans cover medication for HIV prevention violated the Religious Freedom Restoration Act (RFRA). In 2022, a Texas District Court agreed with the employers, holding that the USPSTF’s recommendations are unconstitutional because its members are officers of the United States that were not appointed in accordance with the Appointments Clause.⁹ The District Court held that because the members were unconstitutionally appointed, all recommendations implemented by the USPSTF after March 23, 2010 (the effective date of the ACA) must be vacated and issued a nationwide injunction blocking enforcement of the ACA’s preventive care mandate. The District Court also held that the USPSTF’s recommendation to cover PrEP at no cost share violated the RFRA.
On appeal, the Fifth Circuit Court of Appeals affirmed the District Court decision that the USPSTF members were unconstitutionally appointed; however, the Fifth Circuit held that the District Court had erred in vacating all agency actions to implement and enforce the USPSTF’s preventive care requirements and erred by enjoining enforcement nationally.¹⁰ The Fifth Circuit limited the remedy of enjoining enforcement to the particular plaintiffs and those similarly situated in lieu of a national injunction. The Fifth Circuit also declined to issue similar decisions against ACIP and the HRSA and issued a remand to address whether the Secretary of Health and Human Services properly ratified the recommendations of those agencies.
SCOTUS granted certiorari and will specifically review whether USPSTF members are “inferior officers” of the United States, meaning their appointment was constitutional, and whether the District Court failed to sever the allegedly unconstitutional provision. SCOTUS denied certiorari on the Plaintiff’s cross-petition for review of whether all ACA preventive care requirements violated the non-delegation canon; consequently, all ACA preventive care requirements recommended prior to March 23, 2010 are preserved.
What employers should consider for 2025:
Until SCOTUS renders an opinion, employers subject to the ACA should continue to cover the preventive services recommended by the USPSTF at no cost-share to their employees. If the challenge is successful, employers may be able to impose cost sharing for certain preventive services and/or benefits which may initially reduce healthcare costs. However, it is important to remember that federal law sets the floor, and not the ceiling for required covered benefits – and that while imposing cost-sharing on employees may have an immediate financial gain in the short-term, shifting costs to employees can cause delays in care, which can lead to later medical interventions, higher cost claims, and ultimately, a sicker workforce.
Financial Impact of Prescription Drug Developments
Prescription drug costs are skyrocketing with prescription drug cost trends outpacing medical cost trends in 2025: according to a Segel Health Plan Cost Survey, prescription drug costs grew by 11.4% and medical costs increased by 8%. This trend is heavily influenced by the emergence of glucagon-like peptide-1 receptor agonists (commonly known as GLP-1s) used to treat type 2 diabetes and obesity. While the monthly cost of these drugs is low compared to some other medications, typically ranging from $900 – $1300 per month per patient, their widespread utilization by the public has left employers and health insurers scrambling with how to maintain costs. The financial impact of GLP-1s has been so staggering that many insurers have begun to offer buy-up options to employers if they choose to include GLP-1s on their covered medications list (i.e. Formulary) for weight loss. Proponents of GLP-1s argue that inclusion of the medications on Formulary greatly reduces other costly medical interventions such as gastric bypass surgery, and likewise reduces cardiovascular conditions such as heart attack, and stroke. Those against coverage of GLP-1s argue that there is a lack of independent studies on the impact of long-term usage of GLP-1s, that the costs have significant negative fiscal impacts to the healthcare system, and that the side effects cause even more high-cost claims. Big Pharma continues to seek approvals from the FDA for expanded indications of GLP-1s including for the treatment of sleep apnea, kidney disease, and liver disease.
Additionally, the financial savings that were anticipated when biosimilars, or biologic drugs that are highly similar to an already FDA-approved biologic product, hit the market as many brand medications began to lose their patent protection has been underwhelming. Biosimilar adoption has been slow due to concerns about safety and efficacy among healthcare providers and patients, complex Formulary and reimbursement structures that favor brand drugs over biosimilars, and lack of patient and provider education despite the significantly decreased price tag.
Specialty medications, which on average account for 50% of prescription drug spend, continue to be developed and while these medications offer life altering treatments for patients living with severe illnesses – they also come with a hefty price tag. For example, a new treatment to cure Hemophilia B, a lifelong debilitating bleeding disorder, comes at a price tag of $3.5 Million per treatment. While many balk at the cost, consider on average that an individual with Hemophilia averages $700,000-$800,000 in medical costs per year – so in theory the treatment would pay for itself in 4-5 years. However, for employer-sponsored plans, a single claim of $3.5 million would have an extreme impact on renewals.
Finally, the Trump Administration announced on April 8, 2025 that his administration would soon announce tariffs on pharmaceutical imports. While it is uncertain how Big Pharma will respond to such tariffs, it is certain that if such tariffs come into effect, they will very likely cause significant increases to how much consumers – and specifically plan sponsors/employers will spend on prescription medications. For reference, the U.S. imported over $210 Billion in pharmaceuticals in 2024.
What employers should consider for 2025:
Employers should anticipate prescription drug costs to continue increasing and budget accordingly as GLP-1s are here to stay and increased indications for GLP-1 drugs continue to be considered by the FDA. Employers looking to reduce costs should consider whether to cover GLP-1s for weight loss only. Likewise, employers should speak to their carriers and pharmacy benefits managers (PBMs) about their biosimilar strategy as a means to reduce cost. Employers should investigate copay accumulator programs as a means to leverage drug manufacturer coupon dollars to lower costs of specialty medications and consider plan design changes to their prescription benefits. Finally, employers should prepare for the impact of tariffs on their plans’ prescription drug spends.
Challenge to Mental Health Parity and Addiction Equity Act
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally requires health plans to cover mental health and substance use disorder benefits similarly to medical and surgical benefits. Since MHPAEA’s enactment, complex federal regulations have been published to determine whether a health plan treats these benefits in parity which has led to significant difficulty for issuers and plan sponsors in determining whether a health plan is in compliance. In late 2020, Congress enacted the Consolidated Appropriates Act (CAA) which requires group health plans and health insurers to conduct comparative analyses to demonstrate that both quantitative treatment limitations (QTLs), or treatment limitations that are numerical in nature such as visit limits and copays, and non-quantitative treatment limitations (NQTLs), i.e. non-numerical limitations such as network access to providers, are no more stringently applied to mental health/substance abuse benefits than medical/surgical benefits. Since 2021, plans and insurers have been required to make these comparative analyses available to the Department of Labor, HHS, and Department of Treasury (Departments), upon request – but due to the complexity of the rules, enforcement has been challenging and many plans have been found to be out of compliance.
This led to the Departments eventually publishing final rules amending the longstanding 2013 rules on September 23, 2024 (2024 Final Rules). The 2024 Final Rules establish new NQTL standards, bolster the comparative analysis requirements that were added by the CAA, and prohibit plans and issuers from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to mental health/substance use disorder benefits as compared to medical/surgical benefits when designing NQTLs.¹¹ Some of these regulations are already in force while others begin on or after January 1, 2026.
Earlier this year, the ERISA Industry Committee (ERIC) filed suit against the Departments in the U.S. Court of Appeals for the D.C. Circuit seeking to invalidate the 2024 Final Rules, or at a minimum, invalidate key provisions and prohibit the Departments from implementing or enforcing the new rules, asserting that the 2024 Final Rules violate the U.S. Constitution and the Administrative Procedure Act and impose vague and burdensome requirements on health plans.¹² That same day, the Departments released a report to Congress indicating that employers had made progress on complying with MHPAEA but still fell short. The executive director of the ERIC Legal Center asserted that the new regulations “threaten the ability of employers to offer high quality, affordable coverage for the mental health and substance use disorder needs of employees and their families.”¹³
Prior to the establishment of the 2024 Final Rules, compliance with the MHPAEA caused significant financial strain on health plans and health insurers alike, and by extension drive up compliance costs associated with healthcare benefits coverage. If the additional requirements under the 2024 Final Rules pass constitutional muster, health insurers and plans will incur additional monitoring and reporting costs. Additionally, though MHPAEA enforcement was a top priority for the Biden administration, it is unclear what the Trump administration’s position will be – or what impact the recent workforce cuts at the DOL and HHS will have on the enforcement of MHPAEA going forward.
What employers should consider for 2025:
The 2024 Final Rules may not be here to stay between budget constraints, federal staffing constraints, and the ERIC lawsuit targeting the 2024 Final Rule. In the meantime, employers should monitor updates and budget accordingly for the additional requirements in the 2024 Final Rules to ensure continued compliance with MHPAEA as applicable.
Jenn Malik is a shareholder and Anna Hosack is an associate in the public sector services group of the Pittsburgh law firm of Babst Calland, Clements & Zomnir. Malik focuses her practice on healthcare benefits administration, insurance coverage, and appellate law. Hosack focuses her practice primarily on municipal law, land use, and healthcare benefits law. Contact them at jmalik@babstcalland.com and ahosack@babstcalland.com.
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[1] Amin, K., Cox, C., Ortaliza, J. & Wager, E., Health Care Costs and Affordability, Kaiser Family Foundation, (May 28, 2024) https://www.kff.org/health-policy-101-health-care-costs-and-affordability/.
[2] Lo, J., Long, M., et al, Claims Denials and Appeals in ACA Marketplace Plans in 2023, Kaiser Family Foundation, (Jan. 27, 2025) https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans-in-2023/#:~:text=Key%20Takeaways,by%20insurer%20and%20by%20state.
[3] O’Reilly, Dennis, Best Employee Benefits, Forbes (October 30, 2024) https://www.forbes.com/advisor/business/best-employee-benefits/#:~:text=More%20than%20half%20of%20American,as%20the%20most%20important%20benefit.
[4] 42 U.S.C. § 300gg-13(a)(1).
[5] Preventive Services Covered by Private Health Plans Under the Affordable Care Act, Kaiser Family Foundation (Feb. 28, 2024) https://www.kff.org/womens-health-policy/fact-sheet/preventive-services-covered-by-private-health-plans/#:~:text=The%20services%20required%20to%20be,is%20published%20or%20otherwise%20released.
[6] The USPSTF determines what preventive services must be covered at no cost share by reviewing scientific evidence related to the effectiveness, appropriateness, and cost-effectiveness of clinical preventive services for the purpose of developing recommendations for the health care community, and updating previous clinical preventive recommendations. 42 U.S.C. § 299b-4(a)(1).
[7] The USPSTF recommends what services must be provided at no cost-share, while ACIP recommends which immunizations must be covered, and the HRSA determines what contraceptives require coverage.
[8] Petition for a Writ of Certiorari, Becerra et al. v. Braidwood Management, Inc. et al., No. 24-316 (Sept. 19, 2024).
[9] Memorandum Opinion & Order, Braidwood Mgmt. v. Becerra, 627 F. Supp. 3d 624 (N.D. Tex. 2022)
[10] Braidwood Management, Inc. v. Becerra et al., No. 23-0326 (5th Cir. 2024).
[11] Fact Sheet: Final Rules Under the Mental Health Parity and Addiction Equity Act (MHPAEA), U.S. Department of Labor (last visited Apr. 1, 2025) https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rules-under-the-mental-health-parity-and-addiction-equity-act-mhpaea.
[12] See Complaint, Erisa Industry Committee v. Department of Health and Human Services et al., No. 1:25-cv-00136 (D.D.C. 2025).
[13] Kellie Mejdrich, Trade Group Sues to Stop Federal Mental Health Parity Regs, LAW360 (Jan. 17, 2025) https://www.law360.com/articles/2286079.
There’s no doubt that the energy sector has seen a recent surge in tech-driven initiatives. As economic pressures continue to drive companies to develop and deploy advanced technologies, the industry must also navigate the complex landscape of technology innovation and sustainability to continue to meet regulatory requirements, protect intellectual property, and manage risks associated with the rapidly changing legal and market conditions.
Whether it’s dealing with energy transition, technology onboarding and integration, or AI and automation, Babst Calland is prepared to support energy clients in handling the unique challenges and opportunities surrounding the use of emerging technologies.
For more information, click here. Reach out to Justine Kasznica at jkasznica@babstcalland.com or 412.394.5684 or your Babst Calland contact if you have questions.