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As we continue in 2026, it’s essential for employers to stay informed about the updated cost-of-living adjustments (COLAs) that impact employee benefits. Recent IRS updates affect key programs such as flexible spending accounts (FSAs), Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs), transportation fringe benefits, adoption assistance, and health savings accounts (HSAs).
Understanding and implementing these changes can help optimize tax advantages, maintain compliance, and support employees in managing their healthcare and other related costs. This Advisor highlights the 2026 limits for these key benefits and provides actionable steps employers should take to ensure proper integration of these changes into their benefits packages.
Employer Action Items
- Review and update benefits materials.
Ensure all documents, including cafeteria plans, reflect the 2026 limits for FSAs, transportation fringe benefits, QSEHRAs, and other programs. - Ensure compliance.
Evaluate plan affordability and ACA compliance in light of the updated thresholds. - Coordinate with payroll and benefits providers.
Collaborate with external payroll and benefits vendors to update payroll systems, ensuring seamless compliance with the new caps on contributions and reimbursements. - Communicate changes during open enrollment.
Use the upcoming open enrollment period to educate employees on the new 2026 limits, highlighting how these changes may impact their benefits selections and tax savings for the year. - Inform HR teams. Ensure that HR staff is aware of the new limits and prepared to answer employee questions and properly administer benefits under the new guidelines.
This information has been prepared for UBA by Fisher & Phillips LLP. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.
