--- title: Court Overturns Proposed Notice Mandate for Fixed Indemnity Coverage description: The U.S. District Court for the Eastern District of Texas nullified a new notice requirement for fixed indemnity coverage, which was set to start in 2025. image: https://blog.nisbenefits.com/hubfs/blog-headers/indemnity-cov-b.jpg --- ![Court Overturns Proposed Notice Mandate for Fixed Indemnity Coverage](https://blog.nisbenefits.com/hubfs/blog-headers/indemnity-cov-b.jpg) # Court Overturns Proposed Notice Mandate for Fixed Indemnity Coverage - Home - [Employee Benefit News for School, City and County Employers](https://blog.nisbenefits.com) - Court Overturns Proposed Notice Mandate for Fixed Indemnity Coverage [ Rick Labian ](https://blog.nisbenefits.com/author/rick-labian) 12/20/2024 [ Health Insurance Solutions](https://blog.nisbenefits.com/topic/health-insurance-solutions), [ Legislative News](https://blog.nisbenefits.com/topic/aca-other-legislative-news) [0 Comments ](https://blog.nisbenefits.com/overturn-mandate-fixed-indemnity-coverage#postComment) 1 Minutes *1 minute read* On December 4, 2024, the U.S. District Court for the Eastern District of Texas [vacated](https://litigationtracker.law.georgetown.edu/wp-content/uploads/2024/05/ManhattanLife-Insurance-and-Annuity-Company-et-al_2024.12.04_FINAL-JUDGMENT.pdf) a new notice requirement for fixed indemnity coverage in the group market, which was set to start in 2025. ## **Fixed Indemnity Coverage** Fixed indemnity coverage offers income replacement benefits, paying a set amount per day for health-related events like hospitalization, without being affected by the Affordable Care Act (ACA) reforms. Fixed indemnity benefits are paid directly to policyholders, allowing them to use the funds for any expenses, including nonmedical ones like childcare or transportation.   ## **Notice Requirement and Court Ruling** On April 3, 2024, the U.S. Departments of Labor, Health and Human Services, and the Treasury released a [final rule](https://www.federalregister.gov/documents/2024/04/03/2024-06551/short-term-limited-duration-insurance-and-independent-noncoordinated-excepted-benefits-coverage) on health coverage types exempt from ACA protections, such as fixed indemnity coverage. Starting January 1, 2025, a consumer notice must be clearly displayed on the first page of all marketing, application, or enrollment materials for fixed indemnity benefits in the group market. This ensures consumers can differentiate it from traditional health coverage. After the final rule, fixed indemnity insurers challenged the new notice requirement, claiming it exceeded statutory authority. On December 4, 2024, the U.S. District Court in Texas sided with the insurers, striking down the requirement. An appeal seems unlikely. Download the [bulletin](https://blog.nisbenefits.com/hubfs/blog-supporting-docs/bulletin-court-rejects-notice-requirement-fixed-indemnity-coverage.pdf) for more details. 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