U.S. Employee Health and Welfare Plan Regulations Receive Multiple Updates

Recent U.S. regulatory and legislative actions affect employee health and welfare plans. The IRS released drafts of 2026 Form 1095‑C and Form 1094‑C, outlining employer reporting under the ACA, while penalties for the employer‑shared responsibility provisions are set to rise sharply in 2027, with the penalty for failure to offer coverage increasing to $3,780 and the penalty for not providing affordable coverage rising to $5,670.

The Internal Revenue Service reaffirmed that Section 419 “tax‑saver” plans are abusive shelters, imposing a 100 % excise tax on disqualifying dispositions and limiting exit strategies for sponsors. HHS finalized marketplace changes that modify essential health‑benefit standards, allowing non‑network plans and shifting certain responsibilities to states, including potential surprise‑bill provisions.

Congressional activity includes three House bills targeting ERISA plans: prohibiting pharmacy‑benefit‑manager kickbacks (HR 7895), requiring accurate hospital billing practices (HR 8684), and extending Form 5500 filing deadlines (HR 7362). State‑level paid‑leave reforms were also highlighted, with Virginia enacting a law guaranteeing up to 40 hours of paid sick leave per year and Chicago updating its paid‑leave and sick‑leave rules. CVS filed a lawsuit challenging Tennessee’s new pharmacy‑benefit‑manager law.

These developments span federal guidance, congressional proposals, and state legislation, collectively shaping the compliance landscape for employers and benefit providers.