UBA Partner Firms help employers stay one step ahead by answering their employee benefits compliance questions with timely and accurate answers.
Answers to compliance questions are provided by UBA Alliance, Kutak Rock.
12.11.25 | MEDICARE & GROUP INSURANCE Q. An employer has 19 full-time employees and 5 part-time employees. If there are 20 or more employees the group plan is primary and Medicare secondary. Is it correct that it does not matter if the employees are full-time or part-time, and is based on the number of employees in the 20 weeks in the prior calendar year? A. You are correct. For Medicare purposes, you count all employees, regardless of whether they are full time or part time. As long as the employer as 20 or more employees for each working day for 20 calendar weeks in the current or prior calendar year, the employer plan will be primary to Medicare.
12.4.25 | POLICY FOR SINGLE EMPLOYEE NOW SUBJECT TO COBRA Q. A California company has Kaiser and UHC policies and subject to COBRA. Separately, they opened a Kaiser Hawaii policy for their sole employee in Hawaii who has since left the company. There are no plans to hire another employee in Hawaii. Is the company required to keep the Hawaii policy active to accommodate the employee who needs to be offered COBRA? A. The employer is not required to keep the Hawaii Kaiser policy in effect if the employer no longer has any active Hawaii employees. The employee would be entitled to COBRA under the Kaiser CA and UHC policies.
11.27.25 | COBRA PREMIUMS FOR PART-TIME EMPLOYEE Q. An employee's hours have decreased to part time, making him ineligible for the company's Section 125 POP plan. Can the employee have the entire $500 employer plan cost for COBRA taken pre-tax from his part-time paycheck? A. Yes, if permitted by the POP plan, it is legally possible to pay the COBRA premiums through the POP plan while the COBRA beneficiary remains employed with his employer.
11.20.25 | ICHRA AND CREDITABLE COVERAGE NOTICE Q. Does the Medicare Creditable Coverage notice need to be sent for an employer group that is covered under the DC Exchange (ICHRA)? A. Individual Coverage HRAs (ICHRAs) are considered group health plans and they are subject to the creditable coverage reporting requirements for Medicare. ICHRA coverage is considered non-creditable coverage (even if an employee acquires creditable coverage from the Exchange).
11.13.25 | COBRA SUBSIDY ENDING CONSIDERED A QLE Q. An employee has a COBRA subsidy from their prior employer that is ending. Is that a qualified life event, allowing them to enroll in the new employer’s plan outside of open enrollment? A. No, the ending of any COBRA subsidy is not a HIPAA special enrollment event that would entitle an employee to enroll in a new employer’s plan outside of open enrollment.
11.06.25 | FSA MID-YEAR ELECTION AMOUNT Q. Is an eligible employee allowed to elect the health FSA maximum when they enter mid-plan year or should the election amount be prorated for the remaining months? A. When an employee joins a health FSA in the middle of the plan year, they can contribute the full annual maximum to the FSA. There is no need to prorate the maximum contribution limit.
The dependent care limit is increased to $7,500 effective Jan. 1, 2026, and this is based on the calendar year. That said, the employer may need to amend its plan to take advantage of this increased limit as of Jan. 1, 2026.
10.31.25 | FSA & DCA Q. If FSA and DCA plans start in December 2025, can the employer elect to contribute the full 2026 annual limits or only the full 2025 annual limits? A. The 2026 health FSA limit of $3,400 applies to plan years beginning on or after Jan. 1, 2026. The employer's health FSA will be subject to the $3,300 limit from Dec. 1, 2025, to Nov. 30, 2026.
The dependent care limit is increased to $7,500 effective Jan. 1, 2026, and this is based on the calendar year. That said, the employer may need to amend its plan to take advantage of this increased limit as of Jan. 1, 2026.
10.23.25 | MEDICARE PART D NOTICE TO COBRA PARTICIPANTS Q. Are Medicare Part D Notices required to be mailed out to active COBRA participants under the group plan? A. Yes, the Medicare Part D Creditable Coverage notice needs to go to all plan participants, including COBRA qualified beneficiaries.
10.16.25 | GOVERNMENT SHUTDOWN AND QUALIFYING LIFE EVENT Q. Is there any precedent that would allow a member to enroll in a group medical plan due to the government shutdown? The employee is enrolled in a spouse's Tricare plan and was told by a Tricare physician that she may not be able to receive all of her maternity check-ups due to the government shutdown. Could this be considered a qualifying life event allowing enrollment in an employer's health plan outside of open enrollment? A. On its face, the government shutdown, and potential ramifications to Tricare, is not a qualifying life event. That said, there is a qualifying life event for a “significant curtailment of coverage” under a plan. For example, if a PPO includes two hospital systems in one town, and one hospital system leaves the plan, that could be a significant curtailment of coverage triggering a qualifying life event. Arguably, if the government shutdown impacts Tricare so much as to create a significant curtailment of coverage, then I could see an employer saying it is a qualifying life event. The risk with that argument is that no one knows how long the government shutdown will last. If the shutdown lasts six months, the argument that it constitutes a significant curtailment of coverage is pretty strong. But if the shutdown ends tomorrow, the IRS would likely disagree that a two-week shutdown constituted a significant curtailment. And of course, no one can predict the future and know for sure when the shutdown will end.
So conservatively, the government shutdown is not a qualifying life event. But the longer it goes on, a more aggressive argument would be that the shutdown is causing a significant curtailment of coverage under Tricare and therefore is a qualifying life event.
10.9.25 | FMLA & EMPLOYER HSA CONTRIBUTIONS Q. Should employees on Family & Medical Leave Act (FMLA) leave continue to receive employer HSA contributions? A. Absent anything in the employer’s HSA funding policy to the contrary, employers are not required to continue funding HSA contributions for employees out on FMLA leave. HSAs are not considered group health plans protected by the FMLA.
10.2.25 | EMPLOYER-FUNDED HSA Q. Can an employer that offers an HDHP contribute more than 100% of the employee deductible expenses via an HSA account? A. Yes, an employer can fund an HSA up to the maximum limit. For 2025, this limit is $4,300 for single and $8,550 for family coverage. The deductible in an HDHP is separate and does not impact the HSA maximum contribution.
9.25.25 | HSA ELIGIBILITY Q. Does a person's health savings account need to be open for expenses to be eligible? For example, the employee was eligible on Sept. 1 but didn't open the account until Oct. 1 and wants to submit claims incurred in September. A. Medical expenses incurred before the HSA is opened are not considered a qualifying medical expense and HSA funds cannot cover those expenses. See IRS publication 969 for more information.
9.18.25 | QUALIFYING LIFE EVENT Q. The birth of a child is a qualifying life event, allowing an employee to change plans mid-year. Can an employee still change plans if they don’t add the child to the medical plan? A. The birth of a child is not only a qualifying life event, but it is a HIPAA special enrollment event. This means the employee has the right to change benefit options regardless of whether the employee adds the new child to the medical plan.
9.11.25 | HSA ELIGIBILITY FOR BRONZE PLANS Q. The One Big Beautiful Bill Act allows all bronze plans to be HSA eligible, even if they have a copay before the deductible. Does this apply only to bronze plans in the individual ACA market, or does it include small group plans and large group employers? A. The OBBBA makes all bronze plans that are available on the individual market through an Exchange HSA eligible. This does not extend to employer-provided plans.
9.4.25 | HSA ELIGIBILITY WITH EMBEDDED DEDUCTIBLE Q. Please explain how an embedded deductible affects eligibility to participate in an HSA. A. To be HSA eligible, the employee must only be enrolled a qualified high deductible health plan. For 2025, a qualified high deductible health plan requires a minimum deductible of $1,650 for single coverage and $3,300 for family coverage. If the medical plan provides benefits (other than preventative care) prior to satisfying these deductibles, the plan is not a qualifying high deductible health plan and the employee cannot contribute to an HSA.
An embedded deductible refers to a single person deductible embedded within a family plan. For example, if the family plan has a $3,300 deductible but an embedded deductible of $2,000 per person, this plan will pay benefits if one family member has $2,000 of expenses even though the family may not have satisfied the $3,300 family deductible. This type of plan design would NOT be a qualified high deductible plan because the plan would be paying benefits before satisfying the family deductible of $3,300. To be a qualifying high deductible health plan, the embedded deductible must be at least the same amount as the minimum family deductible.
For example, assume a family plan with a $5,000 deductible, but an embedded deductible of $3,300. This means the family must incur $5,000 of expenses before the plan pays anything. But if one family member has $3,300 in expenses, that family member’s bills over $3,300 will be covered. This plan design is a qualified high deductible health plan because the embedded deductible is at least as high as the minimum family high deductible ($3,300 in 2025).
8.28.25 | MID-YEAR TERMINATION DUE TO MEDICAID ELIGIBILITY Q. An employee was just approved for Medicaid and would like to terminate her benefits on the company's level-funded plan. Is this a qualifying event to terminate or waive benefits? A. Yes, an employee or dependent qualifying for – and enrolling in – Medicaid is a qualifying life event allowing the employee to terminate their benefits and those of any dependents.
8.21.25 | COBRA CONTINUATION FOR SMALL EMPLOYER PLAN Q. A small employer group fell below the 20-employee threshold to offer COBRA, but has two active COBRA participants. Does the employer have to manage COBRA for these two former employees until they exhaust coverage or cancel? Is the employer allowed to cancel this COBRA coverage now? A. If a plan was subject to COBRA and then becomes a small employer plan, the plan remains subject to COBRA for qualifying events that occurred when the plan was subject to COBRA. Q&A 5 in the U.S. Treasury regulations contains some useful examples highlighting this rule.
8.14.25 | SECOND COBRA QUALIFYING EVENT Q. An individual is on COBRA and had planned to enroll in his wife's plan when he exhausts 18 months of COBRA coverage at the end of October 2025 but was served divorce papers in May. Does this create a second qualifying event that triggers a COBRA extension from 18 months to 36 months? A. The divorce is not a second qualifying event that would extend the former employee’s 18 months of COBRA. For a divorce to extend COBRA, the divorce must be a second qualifying event. This means the divorce would have caused a loss of coverage if the former employee was not already on COBRA. That is not the case here since the divorce would not impact the employee’s eligibility under his former employer’s plan (only his spouse’s eligibility). As a result, the former employee is not entitled to extended COBRA due to his divorce.
8.7.25 | INCREASE IN DEPENDENT FSA LIMITS FOR 2026 Q. A client's dependent care FSA plan runs from Sept. 1, 2025, to Aug. 31, 2026. With the increase in limits for Dependent Day Care, can there be an additional open enrollment in January 2026 so the employees can defer more funds under the increased limits? A. Yes, an employer with a non-calendar year Dependent Care Assistance Plan (DCAP) can change the limit effective January 1, 2026, and provide employees with an open enrollment opportunity for their DCAP elections effective Jan. 1, 2026. The employer does not have to wait until the start of the 2026 DCAP plan year.
7.31.25 | MEDICARE PART A AND HSA Q. Does the One Big Beautiful Bill Act (OBBBA) allow Medicare Part A participants to participate in an HSA? A. No, the final version of the OBBBA did not include the proposal to allow Medicare Part A participants to participate in an HSA. This is still not allowed.
7.24.25 | HSA CATCH-UP CONTRIBUTION Q. If a person turns 55 this November, can they take advantage of the $1,000 HSA catch-up contribution, or do they need to wait until 2026? A. Yes, a person just has to turn 55 by the end of the year to make an HSA catch-up contribution for the year. So a 2025 HSA catch-up contribution is possible for this person turning 55 in November.
7.17.25 | USING HSA FOR CHILD'S MEDICAL EXPENSES Q. An employee and their spouse are enrolled in an HSA and the spouse has a child with an ex-wife. The employee and spouse do not claim the child as a tax dependent. Can the employee use HSA funds to pay for out-of-pocket medical/dental expenses for the child? A. The HSA cannot be used to pay for expenses of a child that is not a tax dependent of the HSA owner.
7.10.25 | COUNTING EMPLOYEES FOR PCORI FEE Q. How do we count employees for the PCORI fee when plan years for our medical plans and our HRA are not the same? A. If the HRA and medical plan are on different plan years, each plan must pay a separate PCORI fee. For purposes of determining the PCORI fee for the HRA, you only count employees (spouses and dependents are not included). This is different for the underlying medical plan which looks at total lives covered by the plan.
7.3.25 | COBRA DURATION Q. An employee and their spouse enrolled in Medicare less than 18 months prior to the employee's termination of employment. Would they be entitled to COBRA for 36 months after becoming eligible for Medicare? A. If the employee enrolled in Medicare prior to terminating employment, COBRA for the employee will be 18 months from the termination of employment. COBRA for the spouse will be the longer of 36 months from when the employee enrolled in Medicare, or 18 months from the termination of employment.
About UBA United Benefit Advisors® (UBA) is the nation's leading independent employee benefits advisory organization with more than 200 offices throughout the United States, Canada, and Europe. UBA empowers 2,000+ advisors to maintain independence while capitalizing on each other's shared knowledge and market presence to provide best-in-class services and solutions. The content contained in this website, including but not limited to all text, images, trademarks, and logos, is owned by United Benefit Advisors® (UBA) except as otherwise expressly stated or provided by third parties.
UBA Partner Firms must keep all copyright, trademark, and copy intact. All others may link directly to the UBA website to share UBA copyrighted material; they may not duplicate, distribute, create derivative works, or otherwise use this site's content.
