As we head into 2026, employers offering health coverage should be aware of some notable shifts in the regulatory landscape that will affect plan design, compliance, and cost-sharing for employees. These changes are part of the annual cost-of-living adjustments and broader updates tied to the Affordable Care Act (ACA) and IRS indexing. Understanding them now will help you design benefits that balance employee needs with budget realities.
1. The Out-of-Pocket Maximum Is Rising — Significantly
One of the headline changes for 2026 is the increase in the allowable out-of-pocket maximums for non-grandfathered health plans — the caps on what an individual or family can be required to pay in deductibles, copays, and coinsurance in a year before insurance pays 100%.
- 2026 limits:
- Individual: $10,600
- Family: $21,200
- 2025 limits (for comparison):
- Individual: $9,200
- Family: $18,400
That’s roughly a 15% jump year-over-year — one of the larger increases in recent plan years.
These limits apply to non-grandfathered group health plans, whether you offer fully insured or self-funded coverage. Large employers should embed individual limits within the family cap (an “embedded maximum”) so that a single family member can reach their individual limit without having to meet the full family amount.
2. High-Deductible Health Plans (HDHPs) Also See Bumps
If your company offers HDHPs paired with Health Savings Accounts (HSAs), those thresholds are rising, too:
- HDHP maximum OOP (2026):
- Individual: $8,500
- Family: $17,000
- HDHP maximum OOP (2025):
- Individual: $8,300
- Family: $16,600
These increases are more modest compared to traditional plans, but they still matter for compliance and for employees’ spending risk.
3. Why the Jump Matters for Employers and Employees
From a compliance standpoint, if your plan’s out-of-pocket limits exceed the new cap, it could lose its status as a valid group plan under federal rules. That can have knock-on effects on employer-shared responsibility calculations under the ACA and tax treatment of benefits.
From a cost perspective, the rise reflects ongoing inflation and healthcare cost growth, but it also means employees may face higher potential cost-sharing before hitting the max. Employees who regularly reach their OOP maximum — for example, those with chronic conditions or significant out-of-pocket prescriptions — could see larger annual liabilities under the new limits.
4. ACA Affordability and Employer Mandate Impact
There’s another dimension to keep an eye on. The ACA’s affordability threshold — the percentage of household income an employee can be asked to pay for self-only coverage before it’s considered unaffordable — is rising in 2026 to 9.96% from 9.02% in 2025.
At the same time, employer mandate penalties under IRC §4980H also increase, meaning the financial consequences for not offering compliant, affordable coverage are higher than in prior years.
Together with OOP maximum increases, that means employers need to look at benefit design holistically — not just premium costs, but total cost exposure for employees.
5. What Employers Should Do Next
Here’s a practical checklist as you prepare for 2026:
✔ Update benefit summaries and plan documents.
Ensure the new out-of-pocket maximums are reflected correctly, whether you administer plans in-house or through a carrier/TPA.
✔ Review plan designs for compliance.
Double-check that your HDHPs remain HSA-eligible and that embedded limits are properly implemented. Work with your broker or benefits counsel to confirm compliance with ACA indexing changes.
✔ Communicate early and clearly with employees.
Employees may be surprised by the higher OOP maxes, especially after years of smaller adjustments. Walk them through what the numbers mean in real terms and how they interact with deductibles, copays, and coinsurance.
✔ Reassess budgeting and cost-sharing strategy.
Given ongoing premium increases (projected 6–9% for 2026), many employers are adjusting cost-sharing structures, investing in cost-management programs, or expanding alternatives like telehealth.
6. Turning a Challenge into an Opportunity
Rising cost thresholds are often framed as a negative — and they do present real pressures. But they can also be a catalyst for smarter benefits planning. By proactively educating employees, refining plan design, and benchmarking strategies against peers, employers can maintain competitive benefits while managing financial risk.
In short: Don’t just react to the new limits — plan with them.
📞 Need Assistance? If your team would like help interpreting these changes or communicating them to your workforce, your broker can walk you through the details specific to your plan designs.
Sources
- Hub International. “2026 Cost of Living Adjustments: Key Benefit Limits & Updates.” HUB International, 2025, https://www.hubinternational.com/products/employee-benefits/compliance-bulletins/2025/10/2026-cost-of-living-adjustments-key-benefit-limits-and-updates/. Accessed 8 Jan. 2026.
- Nelson Mullins. “2026 Cost-of-Living Adjustments for Benefit Plans.” Nelson Mullins Employee Benefits & Executive Compensation, 2025, https://www.nelsonmullins.com/insights/alerts/additional_nelson_mullins_alerts/all/2026-cost-of-living-adjustments-for-benefit-plans. Accessed 8 Jan. 2026.
- Sequoia. “2026 Benefit Limits: HSA, HDHP, and ACA.” Sequoia, 15 May 2025, https://www.sequoia.com/2025/05/2026-benefit-limits-hsa-hdhp-and-aca/. Accessed 8 Jan. 2026.
- Mercer. “2026 HSA, HDHP and Excepted-Benefit HRA Figures Set.” Mercer, 2025, https://www.mercer.com/en-us/insights/law-and-policy/2026-hsa-hdhp-and-excepted-benefit-hra-figures-set/. Accessed 8 Jan. 2026.
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