Maximizing Your Investment in Group Medical and Employee Benefits
Rob DeNinno and Harry Bickel of Precision Benefits Group share strategies for mid-market employers (50–500 employees) to better manage benefits and reduce costs. Key approaches include using ICRAs and MEC plans to meet ACA requirements affordably, pairing HSAs with high-deductible plans to encourage smarter healthcare spending, and exploring level-funding or self-funding options. They also emphasize clear timelines and hybrid strategies for open enrollment, as well as leveraging wellness funds and employee-led committees to promote health across the organization.
2026 FSA Contribution Limits Announced
The IRS has released the 2026 limits for Flexible Spending Accounts (FSAs), effective for plan years starting January 1, 2026. Employees can increase their pre-tax contributions to maximize savings for healthcare and other eligible expenses, while employers should ensure their plan documents reflect these limits.
Here’s what’s changing:
- Health FSA: increases to $3,400 (up from $3,300)
- Health FSA Carryover: increases to $660 (up from $640)
- Dependent Care FSA: increases to $7,500 (up from $5,000)
- Transit & Parking: both increase to $340 (up from $325)
Key Points for Employers:
- Limits apply per employee, regardless of how many family members benefit.
- Non-elective employer contributions generally do not count unless paid as taxable benefits.
- Employers may impose lower contribution limits if desired.
- Communicate these limits clearly during open enrollment to maintain ACA compliance and help employees maximize pre-tax benefits.
Employers Can Now Expand Fertility Benefits
New federal guidance lets employers offer or enhance fertility coverage using excepted benefits, following Executive Order 14216 to improve IVF access and reduce costs.
Options include:
- Stand-alone fertility coverage under a separate policy (employees can still contribute to HSAs)
- Excepted Benefit HRAs to cover out-of-pocket fertility costs
- EAP support services for coaching or navigation (no direct medical care)
Action Steps: Review your benefits, ensure compliance with carriers/administrators, and stay tuned for additional regulatory updates.
Managing Spousal Participation in Employer Health Plans
Employers can manage costs when employees’ spouses have access to their own coverage by using carve-outs, surcharges, or incentives. Carve-outs limit or restrict spouse enrollment if they have other coverage, while surcharges allow enrollment but increase the employee’s premium. Employers can also offer cash opt-out payments or spousal incentive HRAs to encourage employees to rely on the spouse’s plan. Clear documentation, consistent application, and attention to ACA, ERISA, and tax rules help ensure these strategies reduce costs while remaining compliant.
Compliance Corner! Gag Clause Compliance Reminder
Federal rules prohibit group health plans from entering contracts that restrict access to provider cost or quality data—known as gag clauses. All plans must file an annual attestation with federal agencies by December 31, 2025. Employers should review contracts with TPAs and carriers now to ensure compliance and avoid penalties.