Employee Benefits News
Upcoming Webinar: How Employers* Should Handle PCORI Fees for Plan Years Ending in 2025
Wednesday, June 24, 2026, 1:00 - 2:00 pm EDT
The ACA imposes a fee on employers with a Health Reimbursement Arrangement (HRA) or a self-insured plan to fund the Patient-Centered Outcomes Research Institute, also known as Comparative Effectiveness Fees. This Fee is always due by July 31 of the calendar year following the end of the plan year. For plan years ending in 2025, the PCORI fees are due by July 31, 2026
Join our Senior Vice President of Compliance, Corbin Granger, for a webinar on the PCORI fee, completing Form 720, calculating the average number of lives, and more!
*PCORI Fees apply to Self-Insured Plans, Health Reimbursement Arrangements (Including Qualified Small Employer HRAs (QSEHRAs) and Individual Coverage HRAs (ICHRAs)
Medicare Part D Changes Affecting Employer Plans for 2026 and 2027
The Inflation Reduction Act of 2022 (IRA) continues to reshape the Medicare Part D program through calendar years 2026 and 2027. While many provisions are designed to reduce costs for beneficiaries, they may also impact employer-sponsored prescription drug coverage. Key changes include the following:
Calendar Year 2026
- Indexed annual out-of-pocket limit (OOP): The annual OOP threshold is capped at $2,100 for 2026, reflecting an inflation adjustment to the $2,000 cap introduced in 2025.
- Revised liability framework: Part D includes revised liability to reflect negotiated prices taking effect for selected drugs in 2026.
- Revised creditable coverage method: For 2026 only, non-retiree drug subsidy (RDS) plans may use either the prior-simplified method or a revised simplified method to determine whether their coverage is creditable.
Calendar Year 2027
- Coverage gap formally eliminated: The Part D coverage gap or “donut hole” was eliminated in 2025 and is codified under the redesigned benefit.
- Annual OOP limit: The annual OOP cap remains in effect and continues to be indexed annually; once the limit is reached, enrollees have no additional cost-sharing for covered drugs.
- Prior creditable coverage method expires: For 2027 and beyond, non-RDS plans can no longer use the prior simplified determination method; only the revised simplified method may be used.
Employers that sponsor prescription drug coverage for Medicare‑eligible individuals should become familiar with these developments, particularly as they relate to creditable coverage determinations. Employers and their benefit advisors may also consider monitoring prescription drug cost trends and reviewing existing cost‑management strategies, as appropriate. In addition, employers should become familiar with the revised simplified determination method if they have not already done so.
Virginia Enacts Paid Family and Medical Leave
Virginia has enacted a paid family and medical leave insurance program (PFML) that will provide 12 weeks of partially compensated, job-protected leave to most Virginia employees.
Contributions to fund the program start April 1, 2028, and benefits begin Dec. 1, 2028.
Although contributions for the new PFML program do not begin until April 1, 2028, employers should start familiarizing themselves with the program’s requirements and reviewing their leave policies for any needed updates.
Virginia Enacts Pay Transparency Law
On April 22, 2026, Virginia enacted a pay transparency law requiring employers to disclose a wage or salary range in job postings and banning employers from seeking an applicant’s wage or salary history. The law is effective on July 1, 2026.
Employers may take steps now to prepare to comply with the law, such as reviewing and updating job postings, establishing a methodology for determining compensation ranges, and ensuring that the appropriate parties (such as HR and recruiting personnel) are trained on their obligations under the law.
IRS Releases ACA Pay-or-Play Penalties for 2027
On May 4, 2026, the IRS released updated penalty amounts for 2027 related to the employer shared responsibility (“pay-or-play”) rules under the Affordable Care Act (ACA). For calendar year 2027, the adjusted $2,000 penalty amount is $3,780, and the adjusted $3,000 penalty amount is $5,670. This is an increase from the penalty amounts for the 2026 calendar year, which are $3,340 and $5,010, respectively.
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.