August 2026: Employee Benefits Compliance Brief
An exclusive UBA Partner Firm monthly newsletter, focusing on one of your most important responsibilities — employer compliance.
Employer Priorities
DOL Proposes New, Additional Electronic Delivery Safe Harbor
The Department of Labor (DOL) has proposed a new optional electronic disclosure safe harbor for ERISA-covered group health plans. If finalized, the rule would allow plan administrators to post certain required disclosures on a secure website or benefits portal and provide participants with a notice directing them to the documents.
The proposal would not replace existing electronic or paper delivery methods, but would provide employers with an additional compliance option.
Employer Considerations:
- Review current processes for distributing ERISA health plan disclosures
- Evaluate whether benefits platforms can support a notice-and-access model
- Confirm participant electronic contact information is accurate
- Continue following existing disclosure rules while the proposal is pending
- Monitor DOL guidance and the final rule
New Jersey Family Leave Act Expands Employer Responsibilities
Effective July 17, 2026, amendments to the New Jersey Family Leave Act (NJFLA) significantly expand employer and employee coverage. The law now applies to employers with 15 or more employees, down from 30, while employee eligibility begins after three months of employment and 250 base hours worked.
The changes also establish new job restoration protections for employees receiving New Jersey Temporary Disability Insurance (NJTDI) or Family Leave Insurance (NJFLI) benefits in certain circumstances.
Employer Considerations:
- Determine whether the organization meets the new 15-employee threshold
- Update eligibility procedures to reflect the new tenure and hours requirements
- Review leave policies, handbooks, and job restoration procedures
- Train managers to refer potential leave requests to HR
- Coordinate leave administration with payroll and benefits vendors
SBC vs. SPD: Understanding Two Required Health Plan Disclosures
The Summary of Benefits and Coverage (SBC) and Summary Plan Description (SPD) are two important disclosures for employer-sponsored health plans, but they serve different purposes and are required under different federal laws.
The SBC provides a standardized overview of benefits and cost-sharing to help employees compare coverage options, while the SPD provides more detailed information about how an ERISA-covered plan operates and participants’ rights and responsibilities. Providing one does not satisfy the requirement to provide the other.
Employer Considerations:
- Confirm both the SBC and SPD are current and accurate
- Review applicable distribution deadlines for each document
- Update documents when material plan changes occur
- Coordinate preparation and distribution responsibilities with carriers, TPAs, and benefits consultants
CMS Announces End of Medicare Part D Premium Stabilization Demonstration
CMS has announced that the Medicare Part D Premium Stabilization Demonstration will end after the 2026 plan year. While the change does not create new compliance obligations for most employer-sponsored group health plans, employers offering prescription drug coverage to Medicare-eligible retirees may experience downstream effects.
Employers sponsoring retiree prescription drug coverage or Employer Group Waiver Plans (EGWPs) should prepare for potential changes to premiums and plan costs beginning in 2027.
Employer Considerations:
- Review Medicare retiree prescription drug offerings for potential 2027 premium changes
- Coordinate with insurers and administrators regarding EGWPs
- Prepare communications regarding potential coverage or premium changes
- Continue satisfying Medicare Part D creditable coverage requirements
ACA Affordability Threshold Increases to 10.22% for 2027
The ACA affordability threshold will increase to 10.22% for plan years beginning in 2027, up from 9.96% for 2026. The updated threshold is important for applicable large employers when determining whether an offer of health coverage is considered affordable under the ACA employer shared responsibility rules.
The higher threshold may provide employers with additional flexibility when establishing employee contribution levels for 2027.
Employer Considerations:
- Review employee contribution requirements for 2027
- Update affordability calculations using the 10.22% threshold
- Confirm applicable affordability safe harbors are calculated correctly
- Coordinate contribution changes with ACA reporting and compliance processes
Question of the Month
FSA Limits
Q. If an employer’s dependent care FSA renews July 1, can employees still contribute the full $7,500 calendar-year limit in 2026?
A. Yes. Dependent Care Assistance Program (DCAP) limits apply on a calendar-year basis. As long as the employer’s DCAP has been amended to incorporate the new limit, an employee may contribute the additional amount necessary to reach the 2026 calendar-year maximum.
Relational Advisors is a UBA Partner Firm.