No surprises at year-end: A 2026 employee benefits compliance guide

Although the 2026 year-end may still be a few months away, now is a good time for employers to take stock of their employee benefits compliance responsibilities while there is still an opportunity to identify and address administrative issues, complete required filings and notices and avoid a year-end scramble before it is too late.

The following guide highlights several items employers should have on their radar as they close out 2026.

Retirement plans

• Confirm plan operations. Employers should review what the retirement plan document says as it relates to eligibility, compensation, employee deferrals, employer contributions, vesting, service crediting, rehires, loans and distributions, etc. The goal is to identify any differences between what the plan document says and what administratively happened during the year because a failure to be aligned in plan operations and what the plan document requires can result in IRS penalties or possibly even plan disqualification of tax-exempt status.  The good news is there are IRS programs to allow self-correction of these issues without punitive outcomes.
• Adopt applicable plan amendments. Employers should confirm that all amendments required during 2026 have been formally adopted and that the plan document accurately reflects the plan's current operation, including any discretionary features. Employers should separately review the SECURE 2.0 amendment requirements and deadlines.
• Prepare for year-end testing. Make sure census data is accurate and that the plan's third-party administrator (TPA) or recordkeeper has the information needed for applicable nondiscrimination, coverage, top-heavy and other testing. Identifying potential failures early gives employers more time to determine whether corrective action is needed.
• Clean up outstanding issues. Review delinquent plan loans, uncashed distribution checks, missing participants, beneficiary information and other unresolved participant issues. These issues are easier to address before year-end than after a compliance problem has surfaced.

Health and welfare plans

• Remind employees about unused flexible spending account (FSA) balances. Employers should remind employees to check their health and dependent care FSA balances and understand applicable deadlines for spending funds and submitting claims. If the plan permits a carryover or grace period, communications should clearly explain when funds expire and what expenses qualify.
• Confirm required annual notices were distributed. Depending on the plans offered, employers may have annual notice obligations relating to Medicare Part D creditable coverage, Children's Health Insurance Program Reauthorization Act (CHIPRA), the Women's Health and Cancer Rights Act, wellness programs and other benefits. Employers should confirm that required notices were provided to the appropriate individuals and retain evidence of distribution. Coordination with health plan service providers related to the Department of Labor's (DOL) proposed electronic document delivery process should also be considered.
• Complete the Gag Clause Attestation. Group health plans generally must annually attest that their agreements with health care providers, networks, TPAs and other service providers do not contain prohibited provisions restricting access to or disclosure of certain cost and quality information. The annual attestation is generally due Dec. 31. Employers should determine whether they or a carrier, TPA or other service provider is responsible for completing the attestation and confirm that it has been submitted.

Don't forget earlier deadlines

The Patient-Centered Outcomes Research Institute (PCORI) fee generally applies to insurers and sponsors of applicable self-insured health plans. The fee is reported annually on the second-quarter Form 720 and generally was due July 31, 2026. Employers with self-funded plans should confirm that the Form 720 was filed and the fee was paid. If the deadline was missed or the fee was calculated incorrectly, the employer should address the issue promptly.

Taking a few hours to complete this review now can help employers identify and correct compliance issues before they become larger — and more expensive — problems in 2027.

‍

‍

Content sponsored by Sandberg Phoenix law firm. This update is not intended to be exhaustive, nor should any discussion or opinions be construed as legal, tax or financial advice. TrueNorth Companies recommends consulting with legal, tax or benefits professionals before making any decisions related to employee benefit plans.