Navigating Your 2026 Benefits: Higher Limits and New Legislation
It’s that time of year when leaves, weather, time, and benefits change! Human resources teams are putting the finishing touches on enrollment materials for the benefits renewal period and employees will soon make important decisions about their 2026 benefits. In addition to reviewing health plan options, we want to note several updates to contribution limits and recent legislation that may impact benefits.
2026 Benefit Limits:
| FSA Coverage Type | Max. Contribution | Max. Carryover | Grace Period |
| Health or Limited Purpose FSA | $3,400 | $680 | Available |
| Dependent Care | $7,500 (or $3750 for married ind. Filing separately) | Not Applicable | Available |
| Commuter or Parking | $340/month | Not Applicable | Not Applicable |
| HSA Coverage Level | Max. Contribution (+$1000 catch-up for age 55+) | Min. Deductible (If Shared) | Max. Out-of-Pocket |
| Individual | $4,400 | $1,700 | $8,500 |
| Family | $8,750 | $3,400 | $17,000 (no more than $10,600 per person) |
Understanding the Key Benefits
Flexible Spending Accounts (Health and Limited Purpose (Dental/Vision) FSAs)
FSA’s allow employees to set aside pre-tax dollars to pay for eligible medical, dental, and/or vision expenses like copays, prescriptions, dental care, or glasses. For 2026, the max contribution is $3,400.
Dependent Care Assistance Programs (DCAPs)
DCAPs allow employees to use pre-tax dollars to pay for eligible childcare, after-school programs, or elder care expenses so that the employee/spouse can work. The statutory limit on DCAPs will increase from $5,000 to $7,500 for individual or joint married tax filers (and from $2,500 to $3,750 for married individuals filing separately). This change is effective for tax years starting with 2026.
Health Savings Accounts (HSAs)
HSAs are available to individuals enrolled in qualified high-deductible health plans. They are designed to help employees save for medical expenses, and both contributions and earnings are tax free. For 2026, the maximum contribution is $4,400 with individual coverage and $8,750 with family coverage. Several legislative changes are also expanding how HSAs can be used in 2026.
- Telehealth Safe Harbor
Telehealth services will not disqualify an otherwise eligible high-deductible health plan (HDHP) from being HSA compliant. This provision previously expired on December 31, 2024, so the legislation is retroactive back to January 1, 2025. - Bronze and Catastrophic Plans
Bronze or catastrophic plans offered in the Exchange will be treated as high-deductible health plans (HDHPs) for the purposes of HSA eligibility. This is effective for plans starting January 1, 2026.
Direct Primary Care Service Arrangements (DPCs)
The bill establishes new rules that allow DPCs to be used in conjunction with HSAs. There are specific requirements; please ask our team if you have questions. This is effective starting on January 1, 2026.
Health benefit plans and healthcare accounts can be confusing. You can find more resources to help you navigate the best plan for you on our Learning Center.
Jon Cauble is a Health & Benefits Compliance Officer at Pinnacle.
He can be reached by email at Jon.Cauble@pnfp.com and by phone at 743. 230.5381
