To prepare for open enrollment, employers that sponsor health plans should be aware of compliance changes affecting the design and administration of their plans for plan years beginning on or after Jan. 1, 2026. These changes include limits adjusted for inflation each year, such as the Affordable Care Act's (ACA) affordability percentage and cost-sharing limits for high deductible health plans (HDHPs). Employers should review their health plan's design to confirm that it has been updated, as necessary, for these changes.
In addition, any changes to a health plan's benefits for the 2026 plan year should be communicated to plan participants through an updated Summary Plan Description (SPD) or a Summary of Material Modifications (SMM).
Health plan sponsors should also confirm that their open enrollment materials contain certain required participant notices, such as the summary of benefits and coverage (SBC), when applicable. Some participant notices must also be provided annually or upon initial enrollment. Employers should consider including these notices in their open enrollment materials to minimize costs and streamline administration.
Plan Design Changes
ACA Affordability Standard
The ACA requires ALEs to offer affordable, minimum-value health coverage to their full-time employees (and dependents) or risk paying a penalty to the IRS. This employer mandate is also known as the "pay-or-play" rules. An ALE is an employer with at least 50 full-time employees, including full-time equivalent employees, during the preceding calendar year.
An ALE's health coverage is considered affordable if the employee's required contribution for the lowest cost self-only coverage that provides minimum value does not exceed 9.5% (as adjusted) of the employee's household income for the taxable year. For plan years beginning in 2025, the adjusted affordability percentage is 9.02%. On July 18, 2025, the IRS announced that the affordability percentage will increase to 9.96% for plan years beginning in 2026. This is a significant increase from the affordability percentage for 2025 and the highest this percentage has ever been. As a result, employers may be able to increase employees' health coverage contributions for 2026 while still meeting the adjusted affordability percentage.
ALEs should take the following step for the 2026 plan year:
- Confirm that at least one of the health plans offered to full-time employees satisfies the ACA's affordability standard (9.96%). Because an employer generally will not know an employee's household income, the IRS has provided three optional safe harbors that ALEs may use to determine affordability based on information that is available to them: the Form W-2 safe harbor, the rate-of-pay safe harbor and the federal poverty line safe harbor.
Out-of-Pocket Maximum
The ACA requires non-grandfathered health plans and health insurance issuers to comply with annual limits on total enrollee cost sharing for essential health benefits (EHB). The OOPMs for EHB for plan years beginning on or after Jan. 1, 2026, are $10,600 for self-only coverage and $21,200 for family coverage.
The ACA's OOPM for self-only coverage applies to each individual, regardless of whether the individual is enrolled in self-only coverage or family coverage. This requires health plans and issuers to embed an individual OOPM in family coverage if the family OOPM is greater than the ACA's OOPM for self-only coverage ($10,600 for 2026 plan years).
Employers should take the following steps:
- Review the health plan's OOPMs to ensure they comply with the ACA's limits for the 2026 plan year
- Determine if the health plan's OOPM for family coverage is greater than the ACA's OOPM for self-only coverage ($10,600 for 2026 plan years). If it is greater, make sure the health plan embeds an individual OOPM for family coverage that is not more than $10,600
- If the health plan is an HDHP, confirm that it complies with the lower limits on OOPMs. For the 2026 plan year, the OOPMs for HDHPs are $8,500 for self-only coverage and $17,000 for family coverage
Preventive Care Benefits
The ACA requires non-grandfathered health plans and issuers to cover a set of recommended preventive services without imposing cost-sharing requirements when in-network providers provide the services. Health plans and issuers are required to adjust their first-dollar coverage of preventive care services based on the latest preventive care recommendations.
For plan years beginning after Dec. 30, 2025, health plans and issuers must expand their first-dollar coverage for preventive care for women to include additional breast cancer imaging or testing that may be required to complete the initial mammography screening process. In addition, health plans and issuers must cover patient navigation services for breast and cervical cancer screening without cost sharing.
- Confirm the health plan covers the latest recommended preventive care services without imposing any cost sharing when the care is provided by in-network providers.
Health FSA Contributions
The ACA imposes a dollar limit on employees' pre-tax contributions to a health flexible spending account (FSA). For plan years beginning in 2026, the health FSA limit increases to $3,400 (up from $3,300 in 2025).
- Confirm that employees will not be allowed to make pre-tax contributions in excess of $3,400 for plan years beginning in 2026
- Communicate the health FSA limit to employees as part of the open enrollment process
HDHP and HSA Limits
The IRS limits for HSA contributions and HDHP cost sharing increase for 2026:
| Type of Limit | 2025 | 2026 | Change | |---|---|---|---| | HSA Contribution — Self-only | $4,300 | $4,400 | Up $100 | | HSA Contribution — Family | $8,550 | $8,750 | Up $200 | | HSA Catch-up (age 55+) | $1,000 | $1,000 | No change | | HDHP Min. Deductible — Self-only | $1,650 | $1,700 | Up $50 | | HDHP Min. Deductible — Family | $3,300 | $3,400 | Up $100 | | HDHP OOPM — Self-only | $8,300 | $8,500 | Up $200 | | HDHP OOPM — Family | $16,600 | $17,000 | Up $400 |
HDHPs: Permanent Extension of Telehealth Option
The One Big Beautiful Bill Act permanently extends the ability of HDHPs to provide benefits for telehealth and other remote care services before plan deductibles have been met without jeopardizing HSA eligibility. This provision is optional; HDHPs can apply any telehealth services, other than preventive care, toward the deductible.
- Determine whether the HDHPs will waive the deductible for telehealth services for the plan year beginning in 2026
- Notify plan participants of any cost-sharing changes for telehealth services through an updated SPD or SMM
EBHRA Limit
An excepted benefit health reimbursement arrangement (EBHRA) is an employer-funded health care account that reimburses employees for eligible medical expenses on a tax-free basis. For plan years beginning in 2026, the contribution limit increases to $2,200 (up from $2,150 in 2025).
- Decide how much will be contributed to the EBHRA for eligible employees for the 2026 plan year, up to a maximum of $2,200
- Communicate the EBHRA's annual benefit amount to employees as part of the open enrollment process
Wellness Programs — Surcharges/Rewards
Health plans that impose a surcharge (or provide a reward) based on a health-related standard must comply with nondiscrimination requirements under HIPAA. Numerous class-action lawsuits have recently been filed against employers alleging that health plan premium surcharges related to tobacco use violate HIPAA's nondiscrimination requirements.
- Decide whether to impose a surcharge (or provide a reward) based on any health-related standard
- If a surcharge is imposed (or a reward offered), ensure it is provided through a wellness program that satisfies HIPAA's nondiscrimination requirements
Mental Health Parity — Required Comparative Analysis for NQTLs
MHPAEA requires health plans and issuers to conduct comparative analyses of the NQTLs used for medical/surgical benefits compared to MH/SUD benefits. In 2024, federal agencies released a final rule that would have imposed stricter standards for 2026 plan years. However, enforcement of this final rule has been put on hold by the Trump administration. The statutory requirement to conduct comparative analyses remains in effect.
- Reach out to the health plan's issuer or TPA to confirm that comparative analyses of NQTLs will be updated, if necessary, for the plan year beginning in 2026
Open Enrollment Notices
Employers should provide certain benefits notices in connection with their plans' open enrollment periods, including:
- Summary of Benefits and Coverage (SBC) — required at open enrollment or renewal time
- Medicare Part D Notices — must be provided before Oct. 15 each year to Medicare-eligible individuals
- Annual CHIP Notices — required for plans covering residents in states with premium assistance subsidies
- Initial COBRA Notices — must be provided within 90 days after plan coverage begins
- SPDs — must be provided to new participants within 90 days after coverage begins
- Notices of Patient Protections — required if the plan requires designation of a primary care provider
- Grandfathered Plan Notices — required if maintaining grandfathered status
- HIPAA Special Enrollment Notices — must be provided at or before enrollment
- HIPAA Privacy Notices — self-insured plans must maintain and provide their own Privacy Notices
- WHCRA Notices — required at enrollment and annually
- Summary Annual Reports (SARs) — required within nine months of the close of the plan year
- Wellness Program Notices — required for health-contingent wellness programs
- ICHRA Notices — must be provided at least 90 days before the beginning of each plan year
This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2025 Zywave, Inc. All rights reserved.