The Compliance Download, June Vol. 2

IRS Releases 2027 HSA and HDHP Limits: Compliance Update

The IRS has released updated inflation‑adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for the 2027 plan year. Effective January 1, 2027, the HSA contribution limit will increase to $4,500 for self‑only coverage and $9,000 for family coverage, while the HDHP minimum deductibles will rise to $1,750 (self‑only) and $3,500 (family). In addition, the maximum out‑of‑pocket limits will increase to $8,700 for self‑only coverage and $17,400 for family coverage. These updates are part of the IRS’s annual inflation adjustments and must be reflected in plan designs for applicable 2027 plan years.  

From a compliance perspective, employers sponsoring HDHPs or offering HSA contributions should review plan cost‑sharing structures to ensure they meet the updated thresholds and revise employee communications accordingly. Employers should also coordinate with payroll and benefits administrators to ensure HSA contributions do not exceed IRS limits, as excess contributions can result in tax consequences for employees. Proactive review of plan documents, enrollment materials, and administrative processes will help ensure compliance and a smooth transition into the 2027 plan year. 

See the linked/attached 2027 HSA and HDHP Limits Poster for a quick reference of the new limits. 

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 Departments Propose Fertility Benefits as New Category of Limited Excepted Benefits

Federal agencies; the Departments of Labor, Treasury, and Health and Human Services, have issued proposed rules that would create a new category of limited excepted benefits for fertility coverage, effective for plan years beginning on or after January 1, 2027. If finalized, this change would allow certain fertility benefits such as diagnostics, medications, and treatments including IVF to be offered separately from major medical coverage and exempt from many ACA and HIPAA group health plan requirements. The proposal is intended to address rising infertility treatment costs and inconsistent employer coverage, while providing flexibility for plans that offer fertility benefits through carve‑outs or specialty vendors. 

From a compliance perspective, employers considering these benefits should be aware of several key requirements.  

To qualify as excepted benefits, fertility coverage must be offered under a separate policy or arrangement, cannot require enrollment in a major medical plan, and must meet notice and disclosure requirements outlining covered services, limitations, and claims procedures. In addition, the proposal includes a lifetime benefit cap of $120,000 per participant (indexed for inflation). 

While the final rule is determined Bolton will continue to monitor, helping employers evaluate how fertility benefits fit within their overall plan strategy and ensuring that any offering is properly structured and documented to meet excepted benefit criteria and avoid unintended regulatory exposure. 

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Midyear Qualifying Events: Compliance Reminders for Employee Benefit Changes

Employers should be prepared to administer midyear benefit election changes when employees experience qualifying life events, as these changes are governed by both HIPAA special enrollment rules and IRS Section 125 cafeteria plan regulations.  

HIPAA requires plans to offer special enrollment opportunities in specific situations typically within 30 or 60 days of the event. Section 125 rules allow (but do not require) employers to permit broader midyear changes if the plan document allows and if the election change is consistent with the qualifying event. 

See the linked/attached Mid-year Qualifying Events Cheat Sheet as a point of reference for such changes.  

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