Thomas Hart

Employers providing group life insurance exceeding $50,000 must calculate imputed income using IRS Table I rates and report it on employee W-2 forms. Many employers discover compliance gaps during Q1 when processing year-end payroll reports and face penalties for incorrect calculations.

A wave of ERISA class actions filed in December 2025 targets employer-sponsored voluntary benefit programs including accident, critical illness, and hospital indemnity insurance. Employers face fiduciary liability claims even for employee-paid supplemental coverage.

The IRS increased HSA contribution limits to $4,400 for self-only and $8,750 for family coverage in 2026. Employers must update payroll systems, plan documents, and employee communications to ensure compliance and avoid processing errors that could trigger tax penalties.

The IRS increased the health FSA contribution limit from $3,300 to $3,400 for plan years beginning in 2026. Employers must update plan documents, adjust payroll systems, and communicate the higher pre-tax savings opportunity to employees before open enrollment periods.