This regulatory and legislative update covers issues involving the No Surprises Act, proposed Medicare Advantage rules for 2027, and more.
No Surprises Act — 2026 IDR Entity Fees
On Dec. 29, 2025, the Departments of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury (Treasury) (collectively, Departments) made updates to the No Surprises Act (NSA) website, reflecting revised certified Independent Dispute Resolution (IDR) entity fees.
The 2026 IDR entity fee ranges remain unchanged for 2026. The 2026 fees are effective for disputes initiated on or after Jan. 1, 2026, and are as follows: the administrative fee is $115.00 per party per dispute, and the certified IDR entity fee ranges for single determinations are $200-$840. For batched determinations, the range is $268-$1,173.
In addition, the website includes information on the fee set by each certified IDR entity. As a reminder, the independent dispute process is used when a health plan and health provider are not in agreement on reimbursement for medical services. The patient is taken out of the middle of this dispute in three instances: emergency services, certain nonemergency items and services provided by out-of-network providers at in-network facilities, and air ambulance services provided by out-of-network providers. In these situations, the patient is charged the in-network rate.
Proposed 2027 Medicare Advantage Rules
The Centers for Medicare & Medicaid Services (CMS) released Proposed 2027 Rules. The proposed rules cover a range of topics, including changes to Part D drug coverage and the enrollment process. Of particular interest to employers, the proposed rule would eliminate the Medicare creditable coverage disclosure requirement for HRAs, including ICHRAs.
Eliminating this disclosure requirement would reduce confusion that might be created for plan participants who receive a notice stating prescription coverage is not creditable, such as for the account-based plan, and another notice stating that prescription coverage is creditable from the comprehensive plan. Employers would likely welcome this change.
State Paid Leave Reporting — A Temporary Reprieve
On Dec. 19, 2025, the IRS released Notice 2026-06, extending, by one year, the transition period set in Revenue Ruling 2025-4. That extension applies to certain employment tax and reporting obligations related to state paid family and medical leave (PFML) programs. For additional background, see our past Benefit Beat article here.
Under this extension, calendar year 2026 will continue to be treated as a transition period for medical leave benefits paid by a state attributable to employer contributions. During this period, states are not required to comply with federal income tax withholding, employment tax, or related information reporting requirements applicable to third-party sick pay for these PFML medical leave benefits. Additionally, they will not be subject to penalties for noncompliance.
The IRS granted this extension in response to requests from states administering PFML programs, which indicated they needed more time to update their systems, budgets, and processes to align with the federal tax treatment outlined in Revenue Ruling 2025-4.
It is important to note that this notice does not extend transition relief for voluntary employer “pick-up” contributions. Such contributions remain subject to federal employment tax and reporting requirements. Employers participating in state PFML programs should continue working closely with payroll providers and monitoring IRS guidance to ensure compliance after the transition period ends at the conclusion of calendar year 2026.
Finally, remember that the relief in Revenue Ruling 2025-4, and now this extension, applies only to public PFML plans and not to private plans.
M1 Delinquent Filers Help Available
Multiple Employer Welfare Arrangements (MEWAs) are obligated to file an M-1 by March 1 each year. The Delinquent Filer Voluntary Compliance Program (DFVC) was established to encourage voluntary compliance with the Form 5500 filing requirement. As a way to reduce civil penalty assessments for late filings or failure to file, the Employee Benefit Security Administration (EBSA) has announced that the DFVC program is now available to M-1 filers.
This program allows penalties to be significantly reduced if the filer brings the filings current before they are under audit. The filing requirement applies to MEWAs that must file the M-1 by March 1. The penalty amount is $1,992 per day for late filings or failure to file. Under the DFVC program, if a delinquent filing is corrected before the plan is under audit, the late penalty is reduced to $750. These penalty reductions took effect Dec. 31, 2025.
New Jersey TDI and PFL 2026 Benefit Amount Updated
New Jersey’s Department of Labor and Workforce Development released the 2026 maximum benefit and taxable wage base amounts for temporary disability and paid family leave, as referenced in the November 2025 Benefit Beat article.
The department has corrected the weekly benefit amount. It is $1,119, rather than $1,199.
Hawaii Temporary Disability Amount for 2026
Individuals employed in the state of Hawaii may be entitled to temporary benefits for a disability resulting from non-occupational sickness or accident, including disabilities arising from pregnancy or resulting from organ donation. To be eligible for temporary disability benefits, the individual must have accrued a minimum of 14 weeks of employment in Hawaii, during each of which he/she was paid for 20 hours or more and earned a minimum of $400 in the 52 weeks preceding the first day of disability.
Hawaii’s Department of Labor and Industrial Relations has updated the temporary disability insurance benefit amount and contribution limits for 2026.
Beginning Jan. 1, 2026, employees contribute toward the cost of coverage at a rate of one-half the premium cost, but not more than 0.5% of the employee’s weekly wage, up to $7.50 per week ($7.21 in 2025). The maximum weekly benefit will increase to $871 per week ($837 in 2025).
Rhode Island Temporary Disability Tax Rate for 2026
Rhode Island’s temporary disability insurance (TDI) protects workers against wage loss due to a non-work-related illness or injury. The temporary disability program is financed entirely by employee payroll deductions.
Rhode Island’s Department of Labor and Training announced the 2026 tax rate for the TDI program. The withholding rate beginning Jan. 1, 2026, is 1.1% of the first $100,000 in earnings (1.3% of the first $89,200 in earnings in 2025). The maximum TDI contribution in 2026 will be $1,100.00.
Pittsburgh Paid Sick Leave Guidance
The City of Pittsburgh’s Office of Equal Protection has revised guidelines governing the administration of the Paid Sick Days Act (PSDA). The revised guidelines take effect Jan. 1, 2026. As a reminder, the accrual rate and amount of paid sick time increases Jan. 1, 2026. See the July 2025 Benefit Beat article.
Points of note addressed in the guidelines include:
Notice of Paid Sick Leave Accrual
An employer must maintain a reasonable method for providing notice of accrued paid sick time, such as regular payroll statements reflecting paid sick leave accrual.
Frontloading
If an employer frontloads sick leave, the employer must use a reasonable method to ensure that the accrual meets or exceeds the rate of one hour of paid sick time for every 30 hours worked.
Existing PTO Policies
If an employer has an existing PTO policy that meets the accrual requirements and can be used for the same purposes and under the same conditions as the PSDA, the employer is not required to provide additional paid sick time. The guidelines remind an employer that conditions such as advance notice of need for leave, requiring an employee to find a replacement worker, or leave subject to employer approval are conditions that disqualify the employer’s PTO policy from satisfying the requirements of the PSDA.
Recordkeeping
The PSDA requires employers to retain records documenting hours worked and sick time taken by employees for two years. The revised guidelines provide that employers must also retain records documenting any policy used to provide sick leave for two years.
Notice and Posting Violations
Employers must post a notice at the workplace of the right to paid sick time. The notice must be displayed in English, Spanish, and any other primary language of the employees at that workplace. The revised guidelines clarify that failing to satisfy the notice and posting requirement is a willful violation of the law and will be subject to a fine in an amount not to exceed $100 for each separate offense.
Philadelphia Expands Workplace Accommodations to Include Menopause
Philadelphia’s City Council amended the Fair Practices Ordinance to prohibit discrimination against employees based on menstruation, perimenopause, and menopause.
Beginning Jan. 1, 2027, Philadelphia employers must provide, upon request, reasonable accommodations to an employee related to menstruation, perimenopause, or menopause, if the symptoms substantially interfere with an employee’s ability to perform one or more job functions, unless doing so would cause the employer an undue hardship.
California “Know Your Rights” Notice
The Workplace Know Your Rights Act requires that all California employers provide an annual notice to their employees regarding certain workplace rights. The notice must describe workers’ rights, including workers’ compensation, immigration agency inspections, and law enforcement actions at the workplace.
The notice must be provided by Feb. 1, 2026, upon date of hire, and annually thereafter. An employer must provide the notice to employees in a language that the employee understands.
The Labor Commissioner has developed a notice template that complies with the law and can be used by employers. The notice is currently available in English and Spanish, and will soon be available in additional languages.
Updated Healthy Workplaces/Healthy Families Poster for 2026
California’s Department of Labor Standards Enforcement has released an updated Healthy Workplaces/Healthy Families workplace poster. The updated workplace poster incorporates changes to the law made in 2024 and 2025. These changes include leave to appear at court hearings, jury duty, or to obtain specific victim-related treatment and services.
Employers should confirm that they have the current version of the poster, which is dated January 2026, displayed in a location where employees can easily see and read it.
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