"This revenue procedure modifies certain sections of Rev. Proc. 2024-40 ... to reflect the amendments to the Internal Revenue Code by ... the One, Big, Beautiful Bill Act (OBBBA). This revenue procedure sets forth inflation-adjusted items for 2026 for various Code provisions as in effect on October 9, 2025.

• For taxable years beginning in 2026, the dollar amount in effect under Section 45R(d)(3)(B) is $34,100. This amount is used under Section 45R(c) for limiting the small employer health insurance credit and under Section 45R(d)(1)(B) for determining who is an eligible small employer for purposes of the credit....
• For taxable years beginning in 2026, the dollar limitation under Section 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,400. If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $680....
• For taxable years beginning in 2026, the monthly limitation under Section 132(f)(2)(A) regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $340. The monthly limitation under Section 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $340....
• For taxable years beginning in 2026, the term 'high deductible health plan' as defined in Section 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,900 and not more than $4,400, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $5,850....
• For taxable years beginning in 2026, the term 'high deductible health plan' means, for family coverage, a health plan that has an annual deductible that is not less than $5,850 and not more than $8,750, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $10,700."

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"Health FSAs are subject to the Section 105(h) nondiscrimination rules. The components of these rules are many and layered, which creates a degree of complexity best left to the TPA to perform on the employer's behalf.... Unlike the dependent care FSA's nondiscrimination 55% average benefits test, the health FSA nondiscrimination tests offer sufficient alternatives and low thresholds that make it nearly unheard of to fail."  MORE >>

"[A] participant must be covered by a health FSA when an expense is incurred for the expense to be eligible for reimbursement.... Expenses that are incurred before the date of an employee's enrollment in the plan are not considered to be incurred when the employee is covered by the plan."  MORE >>

"It's that time of year when employers are finalizing their open enrollment materials. Along with benefit changes and annual disclosures, employers should also review their Summary of Benefits and Coverage (SBC) and understand when it needs to be distributed."  MORE >>

"The court explained that once an employer's interests diverge from the claimant's -- such as after a denial when litigation is reasonably anticipated -- the fiduciary exception no longer applies. At that point, legal advice obtained by the plan administrator is for its own protection, not for the benefit of the plan participant. Because the disputed emails were created near the time of Kohler's final denial, after Pasha had obtained counsel, they were protected by the attorney-client privilege and properly withheld." [Pasha v. Kohler Co., No. 24-0836 (E.D. Wis. Oct. 7, 2025)]  MORE >>

"Use predictive data and advanced analytics to define your risk tolerance.... Define your risk management strategy.... Actively manage your pharmacy programs.... Use transparency data to evaluate medical carrier offerings and alternative plan designs."  MORE >>

"The impact of expanding GLP-1 coverage on employment-based health insurance premiums is sensitive to assumptions surrounding uptake and drug prices: Using real-world drug cost scenarios, premium increases ranged from 5.3 percent to 13.8 percent, depending on adherence, cost-sharing, and eligibility assumptions. Using a hypothetical lower-priced GLP-1 with a $200/month cost, increases ranged from 1 percent to 3.9 percent, reflecting the potential for future price reductions to mitigate cost pressures."  MORE >>

"[C]ancer care has been the top driver of employer cost increases for four years in a row.... General prescription drug spending is one of the fastest-growing components of health care costs in 2026.... 90% of U.S. health care spending is on people with chronic and mental health conditions.... General inflation and the consolidation of health systems are driving up prices for services, making catastrophic claims even more expensive."  MORE >>

"A California federal judge has ordered [the plaintiffs' attorneys] to pay a $50,000 penalty for giving the [DOL] confidential documents United Behavioral Health turned over in a class action accusing the insurer of overcharging workers for out-of-network substance use disorder treatments.... The DOL is investigating UBH over similar allegations, according to the judge's ruling." [L.D. v. United Behavioral Health, No. 20-2254 (N.D. Calif. Oct. 7, 2025)]  MORE >>

"The [IRS] has furloughed nearly half its workforce and shut down most day-to-day operations as the government shutdown drags into its second week -- a move that threatens to ... stall compliance actions, and complicate the rollout of sweeping new tax changes approved by Congress earlier this year.... While about 53% of staff remain on the job ... the IRS warned that 'most operations are closed due to the lapse in appropriations.' "  MORE >>

"Functions related to legal counsel that do not pertain to ongoing litigation or exempt matters will stop, as will planning, training and development initiatives across the agency. Maintenance of information systems that are not associated with data protection or active filing season work will be suspended, along with administrative functions that are not connected to safety, remittance protection or exempt funding."  MORE >>

"[1] Cybersecurity is a fiduciary issue.... [2] Vet and tighten your vendor contracts now.... [3] Look for documentation, not just policies ... [4] Train your people, and document that training.... [5] Check your insurance, and insist on cyber coverage.... [6] Bring cybersecurity into your plan oversight meetings.... Cybersecurity isn't just an IT problem, it's an ERISA oversight issue. "  MORE >>