Telehealth Vendor Allegedly Shared Mental Health Information for Targeted Ads
A recent federal lawsuit out of Colorado claims that Kindbridge Behavioral Health (“Kindbridge”) improperly disclosed individuals’ health information via “surreptitious online tracking tools” on its website. According to the complaint, Kindbridge is a telehealth mental health provider that offers online therapy, coaching and support services to treat behavioral addictions and related conditions. Essentially, plaintiff alleges that when individuals engage Kindbridge’s website, Kindbridge records information about their mental health conditions. This information is transmitted to third parties — without individual authorization — including Google, and Google, in turn, uses that information (and permits its clients to use that information) to fuel targeted advertisements directly to those individuals. According to the complaint, these disclosures violate state and federal privacy laws, including HIPAA.
KMK Comment: Given the recent proliferation of telehealth vendors providing online mental health resources, the Kindbridge filing is unlikely to be a standalone case. Plan sponsors should work with benefits counsel to ensure telehealth vendor service agreements require strict adherence to state and federal privacy laws and protect plan participants from unlawful and unwanted disclosures of health information.
Sharpen Your Pencils: IRS Updates Educational Assistance Program FAQs
On April 10, 2026, the IRS released FAQ updates relating to Section 127 educational assistance programs. The FAQ revisions address changes made under the One, Big, Beautiful Bill Act (OBBBA) and certain other minor clarifications. In general, an educational assistance program is a separate written plan of an employer to provide employees with educational assistance. To qualify as a Section 127 educational assistance program, which permits an exclusion from gross income of up to $5,250 (for 2026) for certain education expenses, the plan must be written, and it must meet certain specified requirements.
Tax-free educational assistance benefits may include payments for tuition, fees, and similar expenses, books, supplies and equipment. As of March 27, 2020, tax-free educational assistance benefits may also include principal or interest payments on certain qualified education loans (information on qualified education loans is available in IRS Publication 970). However, the payment by an employer of principal or interest on an employee’s qualified education loan is only available if the written plan so provides. And, bear in mind, if benefits are received under a non-qualifying program (or to the extent that benefits exceed $5,250 (for 2026)), those amounts are not excluded from gross income under section 127, although they may be excludable under section 117 or section 132.
KMK Comment: The updated FAQ guidance includes a newly-modified sample plan that reflects qualified educational loan benefits provisions. Following the IRS sample plan is not mandatory, and employers may wish to tailor the language to better suit their needs. However, the sample is a useful tool to facilitate compliance when designing a new plan or modifying existing language. The KMK Benefits team is available to review and amend Section 127 educational assistance programs to ensure compliance in line with the latest guidance.
Sixth Circuit PBM Ruling a Sweet Win for Bakery’s Self-Insured Plan
On April 7, 2026, the Sixth Circuit handed self-insured plan sponsors a victory in McKee Foods Corporation v. BFP Inc. McKee Foods — a Tennessee-based bakery — sponsors a self-funded ERISA health plan. In its lawsuit, McKee Foods argued that Tennessee’s laws aimed at regulating pharmacy benefit managers (PBMs), including “any-willing-provider” mandates requiring plans to open pharmacy networks to any licensed pharmacy willing to accept network terms and “incentive” provisions banning differential copays or financial incentives that steer participants toward particular pharmacies, were preempted by ERISA. The Sixth Circuit agreed. In so doing, the appeals court held that Tennessee’s PBM laws were preempted due to their impermissible connection with ERISA plans in mandating particular benefit structures, governing central matters of plan administration, and interfering with nationally uniform plan administration.
KMK Comment: This decision underscores a circuit-level trend, following the Tenth Circuit in PCMA v. Mulready, that states cannot use PBM regulation to dictate benefit design of self-funded ERISA plans. For plan sponsors, McKee Foods is a useful reminder that ERISA’s preemption shield remains robust for self-insured arrangements.