2027 open enrollment checklist: what employers need to review

Key takeaways

• The ACA affordability percentage rises to 10.22% for plan years beginning on or after Jan. 1, 2027, up from 9.96%.
• The 2027 HSA contribution limits are $4,500 for self-only coverage and $9,000 for family coverage.
• ACA out-of-pocket maximums for 2027 are $12,000 for self-only coverage and $24,000 for family coverage.
• Starting in 2027, the simplified method for determining creditable prescription drug coverage no longer applies. Plans must pay at least 73% of drug expenses, up from 60%.
• The IRS has not yet released the 2027 health flexible spending account limit. Watch for it before finalizing enrollment materials.
• Tobacco surcharges are drawing class-action litigation. If you use one, confirm your wellness program meets HIPAA’s nondiscrimination rules.

Open enrollment is the one moment each year when you can change how your health plan works. Getting 2027 right means checking two things: whether your plan design still complies with limits that shift every year, and whether your enrollment materials carry the notices participants are entitled to receive.

What’s in this checklist

• Part 1: Plan design changes for 2027 — ACA affordability, out-of-pocket maximums, preventive care, HSA and HDHP limits, health FSA contributions, excepted benefit HRAs, wellness surcharges, mental health parity, and fertility benefits.
• Part 2: Required open enrollment notices — summaries of benefits and coverage, Medicare Part D, CHIP, COBRA, summary plan descriptions, patient protections, grandfathered status, HIPAA special enrollment and privacy, WHCRA, summary annual reports, wellness programs, and individual coverage HRAs.

Two things apply across everything below. Any change to your plan’s benefits for 2027 needs to reach participants through an updated summary plan description (SPD) or a summary of material modifications (SMM). And several notices that are technically required annually can be bundled into your open enrollment materials, which is usually cheaper and simpler than sending them separately.

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Part 1: Plan design changes for 2027

1. ACA affordability standard

The Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum-value health coverage to their full-time employees and dependents, or risk a penalty from the IRS. These are the pay-or-play rules. You are an ALE if you had at least 50 full-time employees, including full-time equivalents, during the prior calendar year.

Coverage counts as affordable if an employee’s required contribution for the lowest-cost self-only coverage that provides minimum value does not exceed 9.5% of household income, as adjusted each year. For plan years beginning in 2026 that adjusted figure is 9.96%. For plan years beginning on or after Jan. 1, 2027, it rises to 10.22%.

Employers generally do not know what an employee’s household income is, so the IRS offers three optional safe harbors that let you measure affordability against information you do have: the Form W-2 safe harbor, the rate-of-pay safe harbor, and the federal poverty line safe harbor. You can apply one or more of them to all employees or to any reasonable category of employees, as long as you do it uniformly and consistently.

What to do

• Review the IRS safe harbors and pick the one that fits, weighing how predictable each is against how much it lets you collect in employee contributions.
• Confirm that at least one plan you offer full-time employees meets the affordability standard under the safe harbor you chose.

2. Out-of-pocket maximums

The ACA caps how much enrollees can be required to pay out of pocket for essential health benefits each year. For plan years beginning on or after Jan. 1, 2027, the out-of-pocket maximum (OOPM) is $12,000 for self-only coverage and $24,000 for family coverage.

There is a detail here that catches employers out. The self-only limit applies to every individual, whether they are enrolled in self-only or family coverage. So if your family OOPM is higher than $12,000, your plan has to embed an individual limit of $12,000 within the family coverage.

High deductible health plans (HDHPs) face tighter limits if they need to stay compatible with health savings account (HSA) contributions. For 2027, HDHP out-of-pocket maximums are $8,700 for self-only coverage and $17,400 for family coverage.

What to do

• Check your plan’s out-of-pocket maximums against the ACA limits for 2027.
• If your family out-of-pocket maximum exceeds $12,000, make sure the plan embeds an individual maximum no higher than $12,000.
• If you offer an HDHP, confirm it meets the lower limits of $8,700 and $17,400.

3. Preventive care benefits

Non-grandfathered health plans have to cover a set of recommended preventive services with no cost sharing, meaning no deductible, copayment, or coinsurance, when an in-network provider delivers them. Four categories of services are covered:

• Evidence-based items or services rated A or B by the U.S. Preventive Services Task Force.
• Immunizations for routine use in children, adolescents, and adults recommended by the Advisory Committee on Immunization Practices.
• Preventive care and screenings for infants, children, and adolescents in guidelines supported by the Health Resources and Services Administration (HRSA).
• Preventive care and screenings for women in HRSA-supported guidelines.

These recommendations change, and your plan has to keep up. A newly recommended service generally has to be covered for plan years beginning on or after the one-year anniversary of the recommendation. One example matters for 2027: HRSA updated its cervical cancer screening guidelines in December 2025, so those updates take effect for plan years beginning in 2027.

What to do

• Confirm your plan covers the latest recommended preventive services with no cost sharing when care comes from an in-network provider.

4. HSA and HDHP limits for 2027

To contribute to an HSA, an individual has to be covered by an HDHP. To qualify as an HDHP, a plan has to meet minimum deductible and out-of-pocket requirements that are adjusted for inflation each year, and HSA contribution limits are adjusted too.

The IRS has released both sets of figures for 2027. HSA contribution limits rise effective Jan. 1, 2027. HDHP cost-sharing limits rise effective for plan years beginning on or after Jan. 1, 2027. The catch-up contribution for people age 55 and older is not indexed and does not change.

What to do

• Check whether your HDHP cost-sharing limits need adjusting for 2027.
• Tell employees the 2027 HSA contribution limits as part of enrollment.

5. Health FSA contributions

The ACA caps what employees can contribute pre-tax to a health flexible spending account (FSA), and that cap is indexed each year. You can set your own limit below the federal maximum, but not above it. For plan years beginning in 2026 the limit is $3,400. The IRS has not yet released the figure for 2027.

What to do

• Watch for the IRS release of the 2027 health FSA limit.
• Once it is out, confirm your payroll system will not let employees contribute above it for the 2027 plan year.
• Communicate the limit to employees during open enrollment.

6. Excepted benefit HRA limit

An excepted benefit health reimbursement arrangement (EBHRA) is an employer-funded account that reimburses employees for eligible medical expenses tax-free. It works alongside your traditional health plan to help with out-of-pocket costs like deductibles, copayments, and coinsurance. Employers of any size can offer one, and employees do not have to enroll in your group coverage to be eligible, though you do have to offer a traditional plan.

Only employers contribute to an EBHRA, and the amount you can make newly available each plan year is capped and indexed for inflation. For 2026 plan years the limit is $2,200. For plan years beginning in 2027 it rises to $2,250.

What to do

• Decide how much you will contribute for eligible employees in 2027, up to $2,250.
• Communicate the annual benefit amount during open enrollment.

7. Wellness program surcharges and rewards

If your plan charges more or pays a reward based on a health-related standard, such as not using tobacco or hitting an exercise target, it has to meet the nondiscrimination rules under the Health Insurance Portability and Accountability Act (HIPAA). Among other things, a health-contingent wellness program has to offer a reasonable alternative standard for earning the reward or avoiding the surcharge, and it has to disclose that alternative in every plan document describing the program.

This is worth extra attention right now. Employers have faced a wave of class-action lawsuits alleging that tobacco surcharges violate HIPAA’s nondiscrimination rules. Some have defended those suits successfully. Others have settled at significant cost, and the litigation shows no sign of slowing.

What to do

• Decide whether to use a surcharge or reward tied to a health-related standard in 2027.
• If you do, confirm the program meets HIPAA’s nondiscrimination requirements and that your materials clearly explain the reasonable alternative standard.

8. Mental health parity comparative analyses

The Mental Health Parity and Addiction Equity Act (MHPAEA) requires parity between your plan’s medical and surgical benefits and its mental health or substance use disorder benefits. That applies to financial requirements and treatment limits, and it also applies to nonquantitative treatment limitations (NQTLs) such as prior authorization, step therapy, network adequacy, and medical necessity criteria.

Plans have to conduct written comparative analyses of the NQTLs they apply to each category of benefits, explaining the specific plan terms at issue and the reasoning behind the conclusion that they comply. Federal agencies and state authorities can request those analyses at any time.

The enforcement picture shifted recently. A 2024 final rule would have imposed stricter standards for comparative analyses starting with the 2026 plan year, but the Trump administration has put enforcement of that rule on hold. The statutory requirement to conduct the analyses has not gone away, and the DOL’s recent report to Congress makes clear that this remains an enforcement priority. The report also notes something practical: plans that stay ahead of this and keep thorough analyses on file tend to resolve DOL investigations faster and on better terms.

What to do

• Contact your issuer or third-party administrator to confirm the NQTL comparative analyses will be updated, if needed, for the plan year beginning in 2027.

9. Expanded options for fertility benefits

Employer-provided fertility benefits are growing fast, driven by employee demand, new federal rulemaking, and expanding state insurance mandates. In May 2026, federal agencies proposed a new category of limited excepted benefits that employers could use to offer fertility coverage. That proposal builds on October 2025 guidance confirming that employers can already offer fertility benefits through three existing excepted benefit pathways: a fully insured independent, non-coordinated policy; an EBHRA; and an employee assistance program providing coaching and navigator services.

The proposed new category would come with four main requirements:

• Substantially all benefits must go toward diagnosing, mitigating, or treating infertility or related reproductive health conditions.
• Benefits are capped at a combined lifetime maximum of $120,000 for the participant and their beneficiaries, indexed for inflation for plan years beginning after 2027.
• The benefits must sit under a separate policy, or otherwise not be an integral part of the plan the same sponsor maintains.
• The plan or issuer must give participants and beneficiaries a written notice describing the coverage, its benefits and limitations, how to find in-network providers, and how to submit claims. That notice goes out at the first chance to enroll, annually after that, and on request.

If finalized, the changes would apply for plan years beginning on or after Jan. 1, 2027, though federal agencies have asked for comment on whether they should take effect sooner.

What to do

• Ask your issuer or third-party administrator what options exist for adding or expanding fertility coverage under your current plan, and what limits should apply.
• Look at standalone options, such as coverage through an HRA, a health FSA, or an excepted benefit.
• Keep an eye on the federal rulemaking, since the proposed category could change your options mid-planning.

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Part 2: Required open enrollment notices

Some of these notices have to go out at open enrollment. Others are required annually and can go out any time, but most employers bundle them into enrollment materials because it is simpler and cheaper. Either way, check that your materials accurately describe what the plan covers and what it costs, and that any 2027 design changes reach participants through an updated SPD or an SMM.

Summary of benefits and coverage

The ACA requires plans and issuers to give applicants and enrollees a summary of benefits and coverage (SBC) each year at open enrollment or renewal. Federal agencies publish a required template. Include an updated SBC with your enrollment materials.

Who prepares it depends on how the plan is funded. For self-funded plans, the plan administrator is responsible. For insured plans, the issuer usually prepares it, and you may only need to distribute what they produce rather than create your own.

Medicare Part D notices

If you provide prescription drug coverage to anyone eligible for Medicare Part D, you have to tell them whether that coverage is creditable, meaning at least as good as Part D. There is no penalty for offering noncreditable coverage, and it can still be a valuable benefit. But individuals need to know, because if their coverage is noncreditable and they skip Part D during their initial enrollment period, they can pay a higher premium later.

One change matters for 2027 and beyond: the simplified determination method no longer applies. You now have to use a revised methodology requiring the plan to pay, on average, at least 73% of a participant’s drug expenses to count as creditable. That is up from 60% under the old method, so coverage that qualified last year may not qualify now.

The notice has to go out at several points, including when someone enrolls and every year before Oct. 15, when Medicare’s annual open enrollment begins. The Centers for Medicare & Medicaid Services publishes model notices.

Annual CHIP notices

If your plan covers residents of a state that offers a premium subsidy to help low-income children and families pay for employer coverage, you have to send an annual Children’s Health Insurance Program (CHIP) notice to every employee living in that state. The DOL publishes a model notice and updates it regularly, so check that you are using the current version.

Initial COBRA notices

The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to plans sponsored by employers with 20 or more employees. Plan administrators have to give an initial COBRA notice to new participants and certain dependents within 90 days of coverage starting. You can fold it into the plan’s SPD. The DOL publishes a model.

Summary plan descriptions

New participants get an SPD within 90 days of coverage starting. Any plan changes have to show up in an updated SPD or be described to participants in an SMM. Beyond that, there is a refresh cycle worth tracking: if you have amended the plan or changed SPD information, a new SPD is due every five years. If nothing has changed, it is every 10.

Notices of patient protections

If your plan requires participants to designate a participating primary care provider, two ACA protections apply. Participants can choose any available participating provider, including a pediatrician for a child. And if the plan covers obstetrical or gynecological care, it cannot require preauthorization or a referral for that care.

When those protections apply, the plan has to provide a notice describing them whenever it provides the SPD or a similar benefits description. It can live in the SPD or in the benefit summary your issuer or TPA provides. The DOL publishes model language.

Grandfathered plan notices

If you sponsor a grandfathered plan, say so in the materials describing coverage, including SPDs and open enrollment documents. The DOL publishes model language.

HIPAA special enrollment rights

Your plan has to notify every eligible employee of their HIPAA special enrollment rights at or before enrollment. This one can sit in the SPD or in the benefit summary from your issuer or TPA.

HIPAA privacy notices

The HIPAA Privacy Rule requires covered entities, including health plans, to give a Notice of Privacy Practices to each individual whose protected health information (PHI) they hold. Plans have to send it at specific points, including to new enrollees at enrollment. At least every three years, plans must either redistribute the notice or tell participants it is available and explain how to get a copy.

Self-insured plans maintain and provide their own privacy notices. For fully insured plans, the issuer carries primary responsibility, and the sponsor’s obligations are narrower:

• If you have access to PHI for plan administrative functions, you must maintain a privacy notice and provide it on request.
• If you do not have access to PHI for those functions, you are not required to maintain or provide one.

Note what does not count as access for this purpose: enrollment information, summary health information, and PHI released under a HIPAA authorization. The Department of Health and Human Services publishes a model notice.

WHCRA notices

Plans and issuers have to tell participants about their rights to mastectomy-related benefits under the Women’s Health and Cancer Rights Act (WHCRA), both at enrollment and annually. The DOL’s compliance assistance guide includes model language.

Summary annual reports

If you file Form 5500, you have to give participants a narrative summary of it, called a summary annual report (SAR). Unfunded health plans, meaning benefits paid from the employer’s general assets rather than through insurance or a trust, are exempt.

The SAR is generally due within nine months of the close of the plan year. If you obtained an extension to file Form 5500, it is due within two months after the extension period closes. The DOL publishes a model.

Wellness program notices

Plans with wellness programs may owe participants notices about how the program is designed. As a rule, provide them when you communicate the program to employees and before anyone hands over health information or undergoes a medical exam. Two situations trigger a requirement:

• HIPAA wellness program notice. Health-contingent programs, which require meeting a health-related standard such as not smoking to earn a reward or avoid a surcharge, must disclose that a reasonable alternative standard is available and, where applicable, that the standard may be waived. That disclosure belongs in every plan document describing the program. The DOL’s compliance assistance guide includes a model.
• Americans with Disabilities Act (ADA) wellness program notice. Employers with 15 or more employees are subject to the ADA. If your wellness program asks health-related questions or includes medical exams, you must tell participating employees what information you will collect, who you will share it with and why, the limits on disclosure, and how you will keep it confidential. The Equal Employment Opportunity Commission publishes a sample notice.

ICHRA notices

If you use an individual coverage health reimbursement arrangement (ICHRA) to reimburse employees for individual market policies or Medicare premiums, you have to give eligible participants a notice explaining the ICHRA and how it interacts with the ACA’s premium tax credit. It is generally due at least 90 days before each plan year starts. You can provide it at open enrollment as long as that lands at least 90 days out. A model notice is available.

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Frequently asked questions

What is the HSA contribution limit for 2027? $4,500 for self-only coverage and $9,000 for family coverage, effective Jan. 1, 2027. The catch-up contribution for people age 55 and older stays at $1,000.

What are the 2027 HDHP minimum deductibles? $1,750 for self-only coverage and $3,500 for family coverage, for plan years beginning on or after Jan. 1, 2027.

What is the ACA out-of-pocket maximum for 2027? $12,000 for self-only coverage and $24,000 for family coverage. HDHPs face lower limits of $8,700 and $17,400 to stay HSA-compatible.

What is the ACA affordability percentage for 2027? 10.22% of household income, up from 9.96% for 2026. It applies to plan years beginning on or after Jan. 1, 2027.

Has the 2027 health FSA limit been released? Not yet. The 2026 limit is $3,400. Watch for the IRS announcement and confirm the 2027 figure before finalizing enrollment materials.

What changed about Medicare Part D creditable coverage for 2027? The simplified determination method no longer applies. Plans must now pay at least 73% of a participant’s drug expenses on average to count as creditable, up from 60%.

Links and resources

• Revenue Procedure 2026-24, which contains the inflation-adjusted HSA and HDHP limits for 2027.
• Model notices for group health plans, including the WHCRA notice.
• Model COBRA notices for group health plans.

The Bright Side

That is a long list, and none of it is optional. The good news is that open enrollment only feels overwhelming when you are working through it alone. Daybright helps employers check plan design against the current limits, get the right notices into enrollment materials, and head into renewal season knowing nothing was missed, through one partner for Employee Benefits, Retirement, Compliance, and Individual Financial Planning. Want a second set of eyes on your 2027 plan? Contact us

The information in this article is intended for informational use only and should not be construed as professional advice.

Source: Adapted from Zywave content. © 2026 Zywave, Inc. All rights reserved.

This post is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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• Tag: Employee Benefits