Introduction

The employee benefits landscape continued to shift in 2025, with employers navigating regulatory updates, litigation, affordability pressures, and ongoing compliance obligations. For HR leaders and business decision-makers, the challenge is not just keeping up with new rules, but understanding which changes matter most to plan design, administration, and employee communication.

This webinar reviewed major benefits-related developments from the past year and highlighted several issues that may shape planning in 2026. Topics ranged from HSA and telehealth changes, ACA updates, and dependent care limits to wellness program litigation, mental health parity enforcement, and emerging state paid leave requirements.

For employers, the practical takeaway is clear: compliance remains a moving target, and even seemingly narrow legal or regulatory changes can affect plan operations, employee eligibility, reporting, and communication requirements.

Below is a structured summary of the most important developments, along with clarifying context to help make the discussion easier to follow and apply.

Key Takeaways

• The most notable 2025 benefits changes discussed included permanent telehealth relief for HDHPs, new HSA-related rules, and a higher dependent care assistance program limit beginning in 2026.
• Employers offering dependent care benefits should weigh the value of the higher contribution limit against the increased risk of failing nondiscrimination testing.
• ACA requirements largely remain in place, including preventive care coverage without cost sharing for non-grandfathered plans.
• Wellness programs, especially tobacco surcharge programs, continue to face litigation tied to reasonable alternative standards and required disclosures.
• Some 2024 mental health parity final rule requirements are under temporary non-enforcement, but the core parity framework and comparative analysis obligations still apply.
• Employers should continue preparing for 2026 by reviewing reporting processes, creditable coverage determinations, paid leave developments, and standard annual compliance deadlines.

2025 Benefits Changes With Ongoing Impact

HSA and Telehealth Relief

One of the most significant developments discussed was the law signed in July 2025 that included several employee benefits-related changes.

A major change involved telehealth coverage for high-deductible health plans (HDHPs). During the COVID-19 period, temporary relief allowed plans to cover telehealth services before the deductible was met without affecting HSA eligibility. That relief had expired, but the new law made it permanent and applied it retroactively to the start of 2025.

This means employers may allow participants enrolled in an HDHP to access certain telehealth and remote care services before meeting the deductible without jeopardizing HSA eligibility.

Practical implications for employers

• Review HDHP plan terms and telehealth arrangements
• Amend plan documents if needed
• Confirm whether changes should apply retroactively to January 1, 2025
• Coordinate with vendors or administrators on implementation

Direct Primary Care and HSA Eligibility

Beginning January 1, 2026, participation in certain direct primary care (DPC) arrangements will no longer automatically disqualify an individual from HSA eligibility.

To qualify, the arrangement must:

• Involve medical care provided by a primary care practitioner
• Stay within monthly fee limits:
  • $150 for self-only coverage
  • $300 for family coverage

The webinar also noted that DPC fees may be treated as eligible medical expenses for HSA reimbursement purposes.

Clarification

Historically, some DPC arrangements were viewed as disqualifying coverage because they provided access to nonpreventive care before the HDHP deductible was satisfied. This change creates more room for employers and employees to pair qualifying DPC arrangements with HSA-compatible coverage.

Marketplace Plans and HSA Eligibility

Starting in 2026, certain bronze and catastrophic individual market plans will be treated as qualifying HDHPs for HSA purposes.

For most employers, this will have limited direct impact. It may matter more for employers using:

• Individual Coverage HRAs (ICHRAs)
• Qualified Small Employer HRAs (QSEHRAs)

Because those arrangements are tied to individual market coverage, changes in what counts as HSA-compatible may become more relevant.

Dependent Care Assistance Program Changes

Higher DCAP Limit in 2026

Another major change discussed was the increase in the dependent care assistance program (DCAP) reimbursement limit.

Beginning January 1, 2026, the annual maximum increases from:

• $5,000 to $7,500

This is a notable change because the limit had remained unchanged for decades, aside from temporary pandemic-era relief.

Timing Matters: Calendar Year vs. Plan Year

A key operational detail is that this change applies on a calendar year basis, not a plan year basis.

For employers with calendar year plans, implementation may be relatively straightforward. For non-calendar year plans, administration becomes more complicated because employers may need to decide whether to:

• Wait until the next plan renewal to adopt the higher limit, or
• Adjust midyear beginning January 1, 2026, while carefully managing contribution elections

Nondiscrimination Testing Concerns

The increased limit is optional, and employers may decide not to adopt the full amount.

That decision may depend in part on nondiscrimination testing. The presenters emphasized that highly compensated employees often elect DCAP benefits at higher rates than non-highly compensated employees. Raising the limit could make it harder to pass the applicable tests.

Practical considerations

Employers may want to:

• Review prior nondiscrimination testing results
• Model likely participation patterns
• Consider whether offering the full new limit is workable
• Explore alternatives, such as limiting participation for certain groups where legally permitted under the rules

ACA Updates Employers Should Know

Preventive Care Mandate Remains in Place

The webinar reviewed the Supreme Court’s decision in the Braidwood case, which challenged how preventive care recommendations are adopted under the ACA.

The takeaway: the preventive care mandate remains intact.

For non-grandfathered group health plans, preventive services must still be covered without cost sharing, and the designated advisory bodies continue to play their role in determining what qualifies.

Updates to Women’s Preventive Care

Changes to preventive care guidelines for women become effective for plan years beginning in 2026. These include:

• Additional screenings and follow-up exams related to breast cancer after an initial screening identifies a possible issue
• Ongoing intervention services for victims of domestic violence

Clarification

These updates expand what may be treated as preventive care. Employers should confirm that carriers or third-party administrators are prepared to administer these services appropriately when the changes take effect.

Contraceptive Coverage Exemptions Narrowed

The presenters also discussed changes related to contraceptive coverage. A court decision vacated rules that had broadened the religious or moral exemption available to employers.

As a result, the available exemptions are now narrower. Certain religious employers may still qualify, and some nonprofit or closely held for-profit entities may still use an accommodation process.

Employer Mandate Enforcement Continues

The IRS is actively enforcing ACA employer mandate requirements for the 2023 calendar year.

The webinar reviewed two common letters:

• Letter 5699: Sent when the IRS believes an employer may be an applicable large employer but required reporting was not filed
• Letter 226-J: Proposes an employer shared responsibility payment based on reporting and subsidized marketplace enrollment

A key practical reminder was simple: do not ignore these letters.

Notice of Availability for Form 1095

Employers now have an additional method for meeting Form 1095 distribution obligations through a notice of availability posted on a public website.

To use this method, employers must:

• Post the notice by March 2
• Keep it posted through October 15
• Include:
  • An email address
  • A mailing address
  • A phone number

If an individual requests the form, the employer must provide it within 30 days.

Marketplace Changes and Premium Tax Credits

The webinar also covered marketplace rule changes aimed at reducing waste and fraud, along with the expiration of enhanced premium tax credits.

One important point for employers: the loss or reduction of a premium tax credit does not create a HIPAA special enrollment event for an employee to join the employer’s plan midyear.

Wellness Program Litigation Remains Active

Tobacco Surcharge Programs Under Scrutiny

The presenters noted continued litigation involving wellness programs, especially tobacco surcharge programs.

These cases often focus on whether employers:

• Properly offered a reasonable alternative standard (RAS)
• Clearly disclosed the availability of that alternative
• Administered rewards or surcharges correctly

A common example is a tobacco surcharge program that allows an employee to avoid the surcharge by participating in a smoking cessation program, regardless of whether the employee quits smoking.

Why This Matters

Even if some employers ultimately prevail in court, the trend signals that wellness programs remain an area of compliance risk.

Employers should review

• Whether their program is participatory or health-contingent
• Whether a reasonable alternative standard is available where required
• Whether all required notices are included in materials
• Whether employees who satisfy the alternative actually receive the full reward or surcharge relief

Medicare Part D Creditable Coverage

Simplified Method Changes

Employers that offer prescription drug coverage must disclose whether that coverage is creditable for Medicare Part D purposes.

For 2026, plans may use:

• The actuarial method
• The existing simplified method
• A revised simplified method

The revised simplified method sets a somewhat higher standard, meaning fewer plans may qualify as creditable under that route.

Why This Matters

This is not about whether the employer must offer creditable coverage. Plans are not required to do so. The requirement is to determine status and provide the appropriate notice.

Because the original simplified method may eventually be phased out, employers should be prepared for possible transition in future years.

Mental Health Parity and HIPAA Privacy Developments

Mental Health Parity: Core Rules Still Apply

Some requirements under the 2024 mental health parity final rule are currently subject to a temporary non-enforcement period while litigation and reconsideration continue.

However, that does not mean mental health parity compliance can be put aside.

Employers still need to comply with the underlying parity framework, including:

• General parity requirements
• Comparative analysis obligations for nonquantitative treatment limitations (NQTLs)

Clarification

The temporary pause affects certain newer requirements, not the overall duty to ensure mental health and substance use disorder benefits are not treated more restrictively than medical/surgical benefits.

HIPAA Privacy Rule and Notice of Privacy Practices

The webinar also covered changes related to HIPAA privacy rules.

A court vacated most of the 2024 rule changes related to reproductive health care privacy. As a result, employers may largely revert to prior HIPAA privacy practices on that issue.

However, one piece remains relevant: updates to the Notice of Privacy Practices related to substance use disorder information.

Employers should watch for an updated model notice and be prepared to comply by February 16, 2026.

ERISA Fiduciary Risk and Vendor Oversight

Increased Attention on Fiduciary Duties

The presenters noted growing attention to ERISA fiduciary litigation involving health and welfare plans, including claims related to prescription drug coverage and vendor oversight.

Although some recent cases were dismissed, the discussion underscored the importance of strong fiduciary process.

Practical steps employers may consider

• Establishing a benefits committee
• Conducting regular compliance assessments
• Monitoring vendor performance
• Documenting vendor selection and review processes
• Confirming fees are reasonable
• Ensuring participant contributions are handled properly
• Considering fiduciary liability insurance

Added context

In this area, process matters. Even when employers are not found liable, documented oversight and prudent decision-making are important risk-management tools.

Other Issues Employers Should Watch in 2026

ICHRA Growth Continues

Individual Coverage HRAs continue to gain traction, especially among employers seeking alternatives to traditional group medical plans.

They may be appealing for employers that:

• Struggle with participation requirements
• Want to offer coverage to part-time employees
• Need a different administrative approach

However, ICHRAs come with their own compliance structure, including class-based rules and limitations on who can be offered an ICHRA versus a traditional group health plan.

State Paid Family Leave Expansion

States continue to expand paid family leave requirements.

The webinar noted:

• Ten states already have mandates in place
• Additional states are becoming effective in 2026
• Maryland’s program is scheduled to become effective later
• Several other states introduced legislation even if it did not pass

For multistate employers, this remains an area to monitor closely.

Annual Limits and Compliance Dates

The presenters closed with a reminder that many annual limits and deadlines remain familiar, with typical inflation-based adjustments.

They also flagged one near-term deadline:

• Gag clause attestation due December 31

For calendar year plans, standard 2026 compliance deadlines should still be reviewed and tracked carefully.

Clarifications & Added Context

What is an HDHP?

An HDHP, or high-deductible health plan, is a plan design that meets IRS requirements and can allow enrolled individuals to contribute to a health savings account (HSA). If a plan provides certain benefits too early or in the wrong way, HSA eligibility can be affected.

What is a DCAP?

A dependent care assistance program (DCAP) lets employees set aside pre-tax dollars for eligible dependent care expenses, such as child care. The increase from $5,000 to $7,500 may be meaningful for employees, but it can also make compliance testing harder for employers.

What is a reasonable alternative standard?

In a health-contingent wellness program, a reasonable alternative standard gives employees another way to qualify for a reward if they cannot meet the original health-related standard.

Why do notices and reporting matter so much?

A recurring theme in the webinar was that employers often face risk not because a benefit design is prohibited, but because a notice was missing, a process was incomplete, or a response deadline was missed. Administration and communication remain central to compliance.

Optional Expansion: Practical Employer Checklist for Early 2026

Based on the topics covered, employers may want to start 2026 by reviewing the following:

• Confirm whether HDHP and telehealth plan language needs amendment
• Decide whether to adopt the higher DCAP limit
• Review nondiscrimination testing risk for dependent care benefits
• Recheck wellness program notices and alternative standard administration
• Confirm creditable coverage methodology for Medicare Part D notices
• Monitor HIPAA notice updates and distribution timing
• Keep ACA reporting and response processes organized
• Watch for state paid leave developments affecting your workforce

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