Employee Benefits News
Finding Opportunity Amid Uncertainty: What the Government Shutdown Could Mean for Health Coverage
With the current uncertainty surrounding the federal government shutdown, many are understandably asking what might happen if the American Rescue Plan’s enhanced premium subsidies were to lapse—and how that might affect both individuals and employer-sponsored health plans.
When the American Rescue Plan (ARP) was enacted, it brought significant relief to millions of Americans. The Inflation Reduction Act (IRA) extended the enhanced premium subsidies through calendar year 2025. These enhanced subsidies helped lower premiums for families and extended assistance to individuals earning above 400% of the federal poverty level—removing the so-called“subsidy cliff.” This created greater access to affordable coverage and stability in the individual marketplace.
As discussions continue in Washington, the long-term future of these enhancements is still being determined. However, even with the uncertainty, there is reason for optimism. Policymakers understand the broad impact these subsidies have had on affordability and access, and many believe a resolution will be reached that preserves or even strengthens premium assistance for the 2026 plan year and beyond.
2025 ACA Reporting: All Final Forms Released, Draft C Series Instructions Available
The Internal Revenue Service (IRS) has released the final 2025 forms for Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 and 6056. While the final instructions have not yet been issued, draft instructions for the 2025 C series forms (Forms 1094-C and 1095-C) are currently available.
Click here for action steps employers should take and for additional IRS resources.
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.
Click here for your 2026 Checklist.
IRS Releases Health FSA Limits for 2026
On Oct. 9, 2025, the IRS released Revenue Procedure 2025-32 (Rev. Proc. 25-32), which includes the 2026 inflation-adjusted limit on employee salary reduction contributions to health flexible spending accounts (FSAs). For plan years beginning in 2026, the adjusted dollar limit on employees’ pre-tax contributions to health FSAs increases to $3,400. This is a $100 increase from the 2025 health FSA limit of $3,300.
The Affordable Care Act (ACA) imposes a dollar limit on employees’ salary reduction contributions to health FSAs. This limit started at $2,500 for plan years beginning on or after Jan. 1, 2013, and has been adjusted for inflation for subsequent plan years. Employers should ensure their health FSAs will not allow employees to make pre-tax contributions over $3,400 for the 2026 plan year. Employers can impose a lower limit on employees’ pre-tax contributions to a health FSA.
Employers should confirm that their health FSA contribution limit is included in the plan’s documents and communicate it to employees at enrollment time.
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.
Updated Administrative Service Agreement and Business Associate Agreement Documents from Towne Benefits
To provide the range of services we offer, Towne Benefits has Administrative Service Agreements and Business Associate Agreements with every client. As rules and regulations evolve, we periodically update these agreements to ensure compliance with all applicable laws. In the coming weeks, you will receive a request to sign an updated Administrative Service Agreement (ASA) and Business Associate Agreement (BAA). These agreements are designed to safeguard your information in full compliance with applicable laws.
These agreements will be sent from your Towne Benefits professional via DocuSign for your electronic signature. We want to assure you that this is a legitimate request from Towne Benefits.
Please let us know if you have any questions or concerns.