2026 Open Enrollment: Plan Design Changes

As open enrollment for 2026 approaches, employers face more than just routine planning. Several compliance updates will impact how health plans are designed and administered for plan years starting Jan. 1, 2026. From inflation-adjusted limits – like the Affordable Care Act (ACA) affordability threshold and high-deductible health plan (HDHP) cost-sharing maximums – to required updates in plan documents, employers should act now to ensure their plans remain compliant.

The following overview highlights the key plan design changes employers should review and address before the new plan year begins.

ACA Affordability Standard

The ACA requires applicable large employers (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 “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. As a result, employers may be able to increase employees’ health coverage contributions for 2026 while still meeting the adjusted affordability percentage.

Employer action item:

• ALEs should confirm that at least one of the health plans offered to full-time employees satisfies the ACA’s affordability standard (9.96%) and meets minimum value.

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 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). This type of cost-sharing limit is commonly referred to as an out-of-pocket maximum (OOPM). 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), including HDHPs intended to be H.S.A. compatible. Also, to be compatible with HSA contributions, HDHPs must comply with lower limits on OOPMs.

Employer action items:

• 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; and
• 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, such as deductibles, copayments, or coinsurance, when in-network providers provide the services. The recommended preventive care services covered by these requirements are:

• Evidence-based items or services with an A or B rating in recommendations of the U.S. Preventive Services Task Force;
• Immunizations for routine use in children, adolescents, and adults recommended by the Advisory Committee on Immunization Practices;
• Evidence-informed preventive care and screenings in guidelines supported by the Health Resources and Services Administration (HRSA) for infants, children, and adolescents; and
• Other evidence-informed preventive care and screenings in HRSA-supported guidelines for women.

Health plans and issuers are required to adjust their first-dollar coverage of preventive care services based on the latest preventive care recommendations. In general, coverage must be provided for a newly recommended preventive health service or item for plan years beginning on or after the one-year anniversary of when the recommendation was issued.

Employer action item:

• Before the beginning of the 2026 plan year, 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). This limit is indexed each year for cost-of-living adjustments. An employer may set their own dollar limit on employees’ contributions to a health FSA as long as the employer’s limit does not exceed the ACA’s maximum limit in effect for the plan year.

For plan years beginning in 2025, the health FSA limit is $3,300. The IRS has not yet released the health FSA limit for plan years beginning in 2026.

Employer action items:

• Monitor future developments for the release of the health FSA limit for 2026;
• Once the IRS releases the health FSA limit, confirm that employees will not be allowed to make pre-tax contributions in excess of the limit for the 2026 plan year; and
• Communicate the health FSA limit to employees as part of the open enrollment process.

HDHP and HSA Limits

IRS limits for HSA contributions and HDHP cost sharing (minimum deductible and OOPM) increase for 2026. The HSA contribution limits will increase effective Jan. 1, 2026, while the HDHP cost-sharing limits will increase effective for plan years beginning on or after Jan. 1, 2026.

2026 Limits

• HSA Contribution Limits
  • Self-only: $4,400
  • Family: $8,750
• HSA Catch-up Contributions
  • Age 55 and older: $1,000
• HDHP Minimum Deductibles
  • Self-only: $1,700
  • Family: $3,400
• HDHP OOPM
  • Self-only: $8,500
  • Family: $17,000

Employer action items:

• Check whether HDHP cost-sharing limits need to be adjusted for the 2026 limits; and
• Communicate HSA contribution limits for 2026 to employees as part of the enrollment process.

HDHPs: Permanent Extension of Telehealth Option

To be eligible for HSA contributions, an individual must be covered under an HDHP and have no other impermissible coverage. Historically, individuals who were covered by telehealth programs that provided free or reduced-cost benefits before the HDHP deductible was satisfied were not eligible for HSA contributions.

A pandemic-related relief measure temporarily allowed HDHPs to waive the deductible for telehealth services without impacting HSA eligibility. This relief expired at the end of the 2024 plan year. However, 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.

Due to the permanent extension, HDHPs may waive the deductible for any telehealth or other remote care services for plan years beginning in 2025 and beyond without causing participants to lose HSA eligibility. This provision is optional; HDHPs can apply any telehealth services, other than preventive care, toward the deductible.

Employer action items:

• Determine whether the HDHPs will waive the deductible for telehealth services for the plan year beginning in 2026; and
• 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 healthcare account that reimburses employees for their eligible medical expenses on a tax-free basis. Employers can use EBHRAs to supplement their traditional health plan coverage and help employees with their out-of-pocket medical expenses, including deductible, copayment, and coinsurance amounts. Employers of all sizes may offer EBHRAs.

Although an employer must offer a traditional health plan, employees are not required to enroll in the employer’s group coverage (or any other type of coverage) to be eligible for the EBHRA.

Only employers can contribute to HRAs, including EBHRAs. EBHRAs are subject to a maximum amount that may be made newly available for the plan year. This maximum amount is adjusted annually for inflation. For 2025 plan years, the contribution limit is $2,150. This limit increases to $2,200 for plan years beginning in 2026.

Employer action items:

• Decide how much will be contributed to the EBHRA for eligible employees for the 2026 plan year, up to a maximum of $2,200; and
• Communicate the EBHRA’s annual benefit amount to employees as part of the open enrollment process.

Wellness Programs: Surcharges and Rewards

Health plans that impose a surcharge or provide a reward based on a health-related standard (e.g., not using tobacco or meeting a specific exercise target) must comply with nondiscrimination requirements under the Health Insurance Portability and Accountability Act (HIPAA).

Among other requirements, health-contingent wellness programs and activities must provide a reasonable alternative standard for qualifying for the full reward (or avoiding the surcharge) and must disclose the alternative standard in all plan materials describing the surcharge or reward. The full reward must be provided to anyone who complies with the reasonable alternative.

Employer action items:

• Decide whether to impose a surcharge or provide a reward based on any health-related standard; and
• Ensure the surcharge or reward is provided through a wellness program that satisfies HIPAA’s nondiscrimination requirements, including explaining to participants that a reasonable alternative standard is available for avoiding the surcharge or qualifying for the reward.

Mental Health Parity – Required Comparative Analysis for NQTLs

The Mental Health Parity and Addiction Equity Act (MHPAEA) requires parity between a health plan’s medical/surgical benefits and its mental health or substance use disorder (MH/SUD) benefits. These parity requirements apply to financial requirements and treatment limits for MH/SUD benefits. In addition, any nonquantitative treatment limitations (NQTLs) placed on MH/SUD benefits must comply with MHPAEA’s parity requirements.

MHPAEA requires health plans and issuers to conduct comparative analyses of the NQTLs used for medical/surgical benefits compared to MH/SUD benefits. This analysis must contain a detailed, written, and reasoned explanation of the specific plan terms and practices at issue and include the basis for the plan’s or issuer’s conclusion that the NQTLs comply with MHPAEA. Plans and issuers must make their comparative analyses available to specific federal agencies or applicable state authorities upon request. 

Employer action item:

• Reach out to the health plan’s issuer or third-party administrator (TPA) to confirm that comparative analyses of NQTLs will be updated, if necessary, for the plan year beginning in 2026.

Get Ready for Open Enrollment With CBIZ

Staying ahead of annual plan design updates is critical to maintaining compliance and supporting your workforce during open enrollment. Partnering with a trusted advisor can help ensure your health plans are up to date, communicated effectively, and aligned with your organization’s goals.

Connect with CBIZ today to prepare your plans – and your people – for a smooth and successful 2026 open enrollment.