By: HUB’s EB Compliance Team

Due to the current federal government shutdown, some 2026 cost of living adjustments that would typically be released by the IRS and other federal agencies are likely to be delayed. However, several key adjustments for employee benefit plans have already been announced earlier this year and some were just recently announced by the IRS. These should be incorporated into your 2026 planning. This article summarizes the 2026 indexed amounts that have been released to date.

Recently Released Amounts

Among the recently-released cost-of living adjustments are

Health Care Flexible Spending Accounts:

  • Maximum salary reduction contribution: $3,400 (up from $3,300)
  • Carryover maximum (if applicable): $680 (up from $660)

Dependent Care FSAs:

Maximum contribution limit: $7,500 (up from $5,000). This was a statutory change as part of the law nicknamed the One Big Beautiful Bill Act.

Transportation Benefits:

  • Parking: $340 per month (up from $325)
  • Mass transit passes: $340 per month (up from $325)

Adoption Assistance:

The maximum exclusion for adoption assistance programs increases to $17,670 in 2026, up from $17,280 in 2025.

Prior Released Amounts

As a reminder, these amounts were released earlier this year:

Health Savings Accounts and High-Deductible Health Plans:

The IRS previously released the 2026 HSA and HDHP limits, which continue to reflect moderate inflationary adjustments:

HSA Contribution Limits:

  • Individual coverage: $4,400 (up from $4,300 in 2025)
  • Family coverage: $8,750 (up from $8,550 in 2025)
  • Catch-up contribution (age 55+): $1,000 (unchanged)

HDHP Requirements:

  • Minimum deductible (individual): $1,700 (up from $1,650)
  • Minimum deductible (family): $3,400 (up from $3,300)
  • Maximum out-of-pocket (individual): $8,500 (up from $8,300)
  • Maximum out-of-pocket (family): $17,000 (up from $16,600)

Non-Grandfathered Plan Out-of-Pocket Limits:

The maximum annual limitation on cost sharing for non-grandfathered group health plans increased significantly, in part due to a change in the calculation methodology that was released in June of 2025. As a result of that change, the 2006 OOPMs are:

  • Self-only coverage: $10,600 (up from $9,200 in 2025)
  • Family coverage: $21,200 (up from $18,400 in 2025)

This represents approximately a 15% increase from 2025 levels. These limits apply to all non-grandfathered health plans, whether fully insured or self-funded. Employers must ensure their plan designs comply with these maximums and that individual out-of-pocket limits are properly embedded within family coverage.

Employer Mandate Penalties:

  • Failure to offer minimum essential coverage (IRC §4980H(a)): $3,340 per full-time employee (up from $2,900)
  • Failure to offer affordable coverage with minimum value (IRC §4980H(b)): $5,010 per full-time employee receiving a premium tax credit (up from $4,350)

The affordability threshold for employee-only coverage increases to 9.96% of household income (up from 9.02% in 2025).

Outstanding Adjustments

Several key figures remain to be announced and are likely delayed due to the government shutdown. The Social Security wage base and various other limits are tied to the September consumer price index. However, due to the government shutdown, the Bureau of Labor Statistics, which releases that figure, is currently closed.

Employers should monitor for these announcements and be prepared to update plan documents, Summary Plan Descriptions and employee communications once these figures are released.

Next Steps

Employers should:

  1. Review current plan designs to ensure compliance with the new limits.
  2. Update Summary Plan Descriptions and other plan documents as needed.
  3. Update employee communications highlighting changes to contribution limits and out-of-pocket maximums.
  4. Adjust payroll systems for FSA and HSA contribution limits.
  5. Monitor for additional 2026 cost of living adjustments once the government shutdown ends.

HUB will release an updated cost of living adjustment chart once all the limits are released.

If you have any questions about these 2026 cost of living adjustments or how they impact your benefit plans, please contact your HUB Advisor.

View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither HUB International Limited nor any of its affiliated companies is a law or accounting firm, and therefore, they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization's or individual's specific circumstances. It is based on HUB International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and HUB International does not have an obligation to update this information.