Read up on our third quarterly blog of 2025.
Medicare Part D Notices Are Due Before 10/15/25
Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2025 – the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices for employers to use.
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ONE BIG BEAUTIFUL BILL Employee Benefit Provisions
The budget reconciliation bill – known as the One Big Beautiful Bill Act (OBBB) – was signed into law on July 4, 2025. Like other budget bills, there were multiple changes to employee benefits provisions, including health savings accounts (HSAs), dependent care assistance programs (DCAPs), student loan payments under educational assistance programs, qualified transportation plans, new Trump Accounts, and employer tax credits for paid family and medical leave expenditures.
Most of the OBBB changes for employee benefit plans are effective in 2026 and do not require immediate employer action. The permanent telehealth relief extension for HDHPs is effective retroactively for the 2025 tax year, so plan sponsors may need to choose how to handle charges for telehealth benefits received prior to satisfaction of the deductible this year.
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Dependent Care Assistance Programs (DCAPs)
Internal Revenue Code (Code) Section 129 allows employers to provide dependent care assistance benefits for their employees on a tax-free basis. These benefit plans are referred to as dependent care assistance programs (DCAPs) or dependent care flexible spending accounts (FSAs).
Effective January 1, 2026, these contribution limits increase to $7,500 and $3,750, respectively.
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Compliance Overview: Open Enrollment 2026
Employers that sponsor group health plans should provide certain benefit notices in connection with their plans’ open enrollment periods. Some of these notices must be provided at open enrollment time, such as the Summary of Benefits and Coverage (SBC). This Compliance Overview includes a chart that summarizes the benefit notices employers should provide at open enrollment time.
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Pay-or-Play Affordability Percentage Will Increase for 2026
On July 18, 2025, the IRS released Revenue Procedure 2025-25 to index the contribution percentage in 2026 for determining the affordability of an employer’s health plan under the Affordable Care Act (ACA). For plan years beginning in 2026, employer-sponsored coverage will be considered affordable under the ACA’s “pay-or-play” rules if the employee’s required contribution for self-only coverage does not exceed 9.96% of their household income for the year.
