Employee Benefits News
Q1 Check-in: State Employee Leave Law Developments
In line with recent years, 2026 has so far been an active one for employee leave laws at the state level. Since the beginning of the year, brand-new paid family and medical leave programs have been launched in Delaware and Minnesota, and a significant redesign of the Washington paid family and medical leave program took effect. The Washington changes should help employers limit leave stacking, but the amendments make more employers subject to employee restoration rights.
Smaller expansions to existing leave rights have gone into effect since January in states such as California, Colorado, Connecticut, Oregon, and Rhode Island.
Employers must also keep their eye on the near-term horizon, as more changes in the employee leave landscape are coming this year, particularly in Illinois, Maine, and New Jersey.
Best Practices for Documenting Employee Benefit Plans
Documenting employee benefit plans is a critical compliance step for employers that can be easily overlooked. Most private sector employers are subject to the Employee Retirement Income Security Act (ERISA), which sets minimum standards for employee benefit plans. Under ERISA, welfare benefit plans must be described in a written plan document. In addition, employers must explain the plans’ terms to participants by providing them with a summary plan description (SPD).
In addition, employers that allow employees to pay for their benefits on a pre-tax basis through payroll deductions must comply with the requirements of Internal Revenue Code (Code) Section 125. One of these requirements is that an employer must adopt a written Section 125 plan document on or before the first day of the plan year. Employers should also confirm that other benefit offerings are documented, including medical opt-out payments and dependent care flexible spending accounts (FSAs).
These documentation requirements are ongoing. Employers should review their plan documents and employee communications at least annually to determine whether updates are needed. Any significant changes should be communicated to participants as soon as possible.
Additional Links and Resources
- The DOL's Reporting and Disclosure Guide for Employee Benefit Plans
- Code Section 125
- Final rule on ICHRAs
- IRS Publication 503, Child and Dependent Care Expenses
Affordable Care Act: 2026 Compliance Checklist
The Affordable Care Act (ACA) made widespread reforms to health plan coverage when it was enacted in 2010. Since then, changes have been made to various ACA requirements for employer-sponsored health coverage. These changes include annual cost-of-living increases to certain ACA dollar limits, adjustments to ACA reporting requirements, and updates to preventive care coverage guidelines.
Changes to some ACA requirements will take effect in 2026 for employers sponsoring group health plans. For example, the affordability percentage under the ACA’s employer mandate rules for applicable large employers (ALEs) will increase significantly for plan years beginning in 2026, which may provide ALEs with more flexibility when setting their employee contribution rates.
To prepare for 2026, employers can use this checklist to review these ACA requirements and develop a compliance strategy. Employers should ensure that their health plan documents, including the Summary of Benefits and Coverage (SBC), are updated to reflect any new plan limits. Employers should also ensure that up-to-date information is communicated to employees at open enrollment time.
Additional Links and Resources
- IRS Rev. Proc. 2025-25 indexed the ACA’s affordability percentage for plan years beginning in 2026.
- IRS Rev. Proc. 2025-26 modified the penalty amounts under the ACA’s employer mandate for 2026.
- A final rule established the cost-sharing limits for 2026 plan years.
HR on Mic Podcast
Our HR on Mic podcast is your source for thoughtful discussions about HR, Compliance, Benefits, and Treating People Right.
Hosted by Corbin Granger, Towne Benefits Senior Vice President of Compliance, and Barbara Jennings, Towne Benefits Human Resources Consultant, HR on Mic provides helpful information on human resources and compliance topics in short, easy-to-listen-to segments.
Our latest episode covers a range of employee benefits topics of interest to employers, including tax-deductible overtime pay, pre-tax dependent care accounts, and tuition reimbursement.