Which Benefits Compliance Issues Should Employers Watch for 2027?

OCTOBER 6, 2026

Federal regulators are increasing scrutiny of health and welfare plan compliance heading into 2027. With enforcement priorities centered on documentation, transparency, and fiduciary accountability, employers should evaluate their compliance strategies now to reduce risk and prepare for new guidance. Below are a few priorities that should be on every employer's radar.

Mental Health Parity Continues to Draw Regulatory Scrutiny

Mental Health Parity and Addiction Equity Act (MHPAEA) compliance remains a federal enforcement priority. Under MHPAEA, employer-sponsored group health plans are generally required to provide mental health and substance use disorder benefits in a manner that is comparable to medical and surgical benefits. This includes coverage limitations and access to care.

Recent guidance indicates that enforcement will focus on nonquantitative treatment limitations (NQTLs), which control how, when, or under what conditions participants can access covered services. Regulators will specifically look for:

• Treatment limitations or exclusions that apply only to mental health or substance use disorder benefits
• Medical necessity standards and processes, such as prior authorization requirements and claims review standards
• Network adequacy standards

Health plans must also maintain an NQTL comparative analysis and furnish it upon request. However, regulators have provided limited guidance on what this analysis must include, and have not issued a model document to support compliance. A new proposed rule or final rule may be issued before year-end to provide additional clarity on NQTL requirements.

Recent regulatory guidance offers additional tools to help employers evaluate mental health parity. Read our Compliance Update to learn more.

Pharmacy Benefit Transparency Remains a Top Concern

Rising prescription drug costs and greater scrutiny of pharmacy benefit arrangements have prompted lawmakers to call for more transparency in employer-sponsored health plan spending. The Consolidated Appropriations Act of 2026 (CAA-26) established new transparency requirements meant to give employers visibility into prescription drug pricing and rebates, as well as PBM fees and compensation.

Most provisions will not take effect for new plan years until on or after August 3, 2028, but regulators are expected to issue implementation guidance sometime in 2027. A separate proposed rule, if finalized next year, could impose additional requirements on both PBMs and plan sponsors. To prepare, employers should consider reviewing pharmacy contracts and discussing pricing, reporting, and compensation structures with their carrier and/or PBM.

ACA Affordability Threshold Hits a New High

The affordability threshold used to determine compliance with the employer shared responsibility provisions of the Affordable Care Act (ACA) will increase to 10.22% for 2027 — the highest threshold since the ACA was enacted. For calendar-year plans beginning on January 1, 2027, the 2026 federal poverty level safe harbor amount is $135.92 per month or less for employee-only coverage in the lower 48 states. This safe harbor for non-calendar-year plans may change once the 2027 federal poverty level guidelines are released.

Employers should review employee contribution amounts and affordability calculations for 2027 to confirm compliance and evaluate whether the higher affordability threshold will affect their contribution strategies.

Embedded Deductibles in HDHPs May Affect HSA Eligibility

Employers that offer high-deductible health plans (HDHPs) with health savings accounts (HSAs) should carefully review plan deductibles to ensure they meet IRS requirements.

For a plan to qualify as an HDHP in 2027:

• The minimum deductible must not be less than $1,750 for individual (“self-only”) coverage and $3,500 for family (or “other than self”) coverage.
• The maximum out-of-pocket limit is capped at $8,700 for individual coverage and $17,400 for family coverage.

Many HDHPs include an embedded individual deductible within family coverage. This means that one family member can begin receiving plan benefits before the full family deductible is met. In an HDHP, an embedded deductible may create compliance issues if it is lower than the minimum family deductible. Such a design does not satisfy HDHP requirements and will affect HSA eligibility. Employers should review family coverage provisions to ensure any embedded individual deductibles comply with applicable HDHP minimums. Correcting this issue with the carrier or TPA before the plan year takes effect is generally straightforward. Waiting until after coverage begins can be more complicated.

As regulatory agencies implement new transparency, fiduciary, and affordability requirements, employers should proactively evaluate their health and welfare plans to identify potential compliance risks. Addressing issues before plan-year changes take effect can help reduce administrative challenges, avoid costly penalties, and improve plan governance.