Compliance Updates for 2026
As 2025 closes, several pressing compliance issues will shape your responsibilities in 2026. Updated PCORI fees, Affordable Care Act (ACA) reporting obligations, state-level mandates, and new federal requirements such as gag clause attestations are all on the horizon.
PCORI Fees Updated for 2026
The Patient Centered Outcomes Research Institute (PCORI) fee continues to apply to insurers and self-funded health plans through 2029. For plan years ending between October 1, 2024, and September 30, 2025, the fee is $3.47 per covered life, payable in mid-2026. Make sure you have accurate headcounts and prepare to file using IRS Form 720.
Determining Applicable Large Employer (ALE) Status
If you have 50 or more full-time equivalent employees, you must offer affordable health coverage or face penalties. As 2026 begins, reassess workforce size, especially if seasonal or variable-hour employees are involved. ALE status determines whether you must file Forms 1094 C and 1095 C with the IRS, and misclassification can lead to significant penalties.
State Mandates: New York’s Age 29 Requirement
New York enforces its Age 29 dependent coverage law, allowing unmarried young adults to remain on a parent’s group health plan until age 29. If you employ staff in New York, ensure your plans comply, even if your headquarters are elsewhere. Other states are expanding mandates around fertility coverage, mental health parity, and telehealth, so multi state employers must track varying rules.
Gag Clause Attestation
Under the Consolidated Appropriations Act (CAA), group health plans must annually attest that they do not have “gag clauses” restricting access to cost or quality information. The next attestation is due at the end of 2026. Coordinate with carriers and third party administrators to confirm compliance and file with CMS.
ACA Reporting Instructions Finalized
The IRS has finalized ACA reporting instructions for 2025 filings, which set the stage for 2026. Updates include indexed affordability thresholds and clarifications on electronic filing requirements. If you have 10 or more returns, you must file electronically, reinforcing the need for accurate HRIS and payroll integration.
Highly Compensated & Key Employee Thresholds
The IRS has updated thresholds for highly compensated employees and key employees under retirement plan rules. Review nondiscrimination testing for 401(k) and cafeteria plans to avoid compliance failures.
Other Emerging Issues
- Mental Health Parity Enforcement: Regulators continue to scrutinize plan designs for compliance.
- Dependent Care FSAs: Clarifications now allow enrollment before a child is born, provided coverage begins at birth.
- Pharmaceutical Recovery Opportunities: Litigation against drug manufacturers may create opportunities to recover costs through specialized programs.
Action Steps for 2026
- Audit plan documents for compliance with PCORI, ACA, and state mandates.
- Confirm ALE status annually and prepare ACA reporting early.
- Coordinate with carriers to meet gag clause attestation requirements.
- Monitor state laws for fertility, mental health, and dependent coverage expansions.
- Update nondiscrimination testing for retirement and cafeteria plans.
In summary
Compliance in employee benefits is becoming more complex, with overlapping federal and state requirements. By proactively tracking PCORI fees, ACA obligations, gag clause attestations, and state mandates, you reduce risk and demonstrate fiduciary diligence.
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