2025 End-of-Year Employee Benefits Compliance Guide for Employers

At 2 a.m. on Sunday, Nov. 2, it wasn’t just the end of daylight savings time and the clocks rolling back one hour, but it was the unofficial countdown to the end of the year for business owners.

November and December quickly become a blur of holidays, travel, and fiscal deadlines, all unfolding as the days figuratively and literally grow shorter, with the winter solstice arriving on Sunday, Dec. 21, the shortest day of the year.  

By this point, employers only have a limited number of working days left to finalize employee benefits. Staying ahead of annual deadlines and regulatory updates is essential to avoid penalties and ensure employees maintain uninterrupted access to the coverage and protections they depend on.

“Wrapping up end-of-the-year tasks is no small feat – so the month of December can feel like a mad rush for HR pros,” wrote Carol Warner in HR Morning.

Whether your business has expanded, entered new markets, or added more variable-hour workers this year, now is the ideal time to make sure your benefit plans, notices, filings, and contribution limits are aligned with 2025 requirements. Use this employer-friendly compliance guide to close out the year with clarity and confidence.

Affordable Care Act: Key 2025 Requirements

The Affordable Care Act (ACA) remains the foundation for employer benefit compliance, particularly for Applicable Large Employers (ALEs). A few requirements shift annually, and 2025 brings several important updates.

ACA Overview and ALE Status

• The Affordable Care Act remains the foundation for employer health benefit compliance in 2025, and all substantial employers must continue to meet its requirements.​
• Applicable Large Employers (ALEs): Employers with 50 or more full-time or full-time-equivalent employees in the prior calendar year are considered ALEs. This threshold remains unchanged for 2025. Businesses that fluctuate near 50 employees or are growing quickly should calculate to confirm ALE status.

Employer Mandate

• Employer Mandate Requirements: ALEs must offer minimum essential coverage (MEC), provide coverage that meets minimum value standards, and ensure that at least one plan is “affordable” by IRS standards.
• Failure to Comply: Employers may face significant IRS penalties for noncompliance, including for not offering coverage, not meeting value standards, or failing affordability criteria.

ACA Affordability Thresholds for 2025

• 2025 Affordability Rate: For the 2025 plan year, the employee-only plan may not exceed 8.33% of household income to be deemed “affordable”. This reflects a decrease from the 2024 affordability percentage.

 ACA Reporting Deadlines for 2025 

• Employee Copy Deadline: For coverage offered in 2025, copies of Form 1095-C or 1095-B must be provided to employees by March 2, 2026.
• Electronic IRS Filing Deadline: All electronic filings for coverage provided in 2025 are due to the IRS by March 31, 2026.
• Paper Filing Limits and Due Date: Only employers filing fewer than 10 total returns may submit by paper, with a March 2, 2026, deadline. For nearly all employers, electronic filing is required and default.

2025 Maximum Deductibles, Out-of-Pocket Limits & HSA/FSA Updates

Each year, the IRS adjusts benefit plan limits. Here are the finalized 2025 numbers.

Out-of-Pocket Maximums for Non-HDHP Plans

• Single: $9,650 (rises to $10,600 in 2026)
• Family: $19,300 (rises to $21,200 in 2026)

High-Deductible Health Plans (HDHPs)

Minimum deductibles for 2025:

• Single: $1,650 (rises to $1,700 in 2026)
• Family: $3,300 (rises to $3,400 in 2026)

Out-of-pocket maximums:

• Single: $8,300 (rises to $8,500 in 2026)
• Family: $16,600 (rises to $17,000 in 2026)

Health Savings Accounts (HSAs)

2025 HSA contribution limits:

• Individual: $4,300 (rises to $4,400 in 2026)
• Family: $8,550 (rises to $8,750 in 2026)
• Catch-up (55+): $1,000

Flexible Spending Accounts (FSAs)

2025 FSA updates:

• Health FSA Contribution Limit: Expected around $3,300 (rises to $3,400 in 2026)
• Carryover Amount: Expected around $660 (rises to $680 in 2026).

Employers offering carryovers or grace periods should verify which design applies and update plan documents accordingly.

Substantiation Requirements

The IRS continues to enforce strict FSA substantiation rules:

• No self-certification.
• No automatic approvals for certain providers.
• All claims must be fully substantiated.

Plans failing to comply risk disqualification, which creates tax issues for both employers and employees.

Preventive Services & Immunizations

Under the ACA’s preventive care rules, non-grandfathered plans must continue covering employees at no cost: immunizations recommended by the Advisory Committee on Immunization Practices (ACIP).

Routine vaccines covered include:

• Influenza
• Tetanus
• HPV
• Hepatitis A & B
• MMR
• Varicella
• Meningitis
• COVID-19 vaccines and updated boosters

COVID-19 is now treated like any other ACIP-recommended immunization; dedicated COVID sections are no longer needed.

Annual Notices Employers Must Provide

Most employer-sponsored health plans require annual distribution of specific notices. Review your calendar to confirm these have been sent or are scheduled.

Common required notices include:

• ACA Marketplace/Exchange Notice
• Summary of Benefits & Coverage (SBC)
• Summary Plan Description (SPD)
• HIPAA Special Enrollment Rights
• HIPAA Privacy Notice (self-insured plans)
• CHIP Notice
• Medicare Part D Creditable/Non-Creditable Coverage Notice
• COBRA Initial Notice
• Surprise Billing/No Surprises Act Notice
• WHCRA (Women’s Health and Cancer Rights Act)
• Grandfathered Plan Notice (if applicable)

Notices can be distributed electronically if certain requirements are met. Some notices (COBRA, SPD) may not be strictly annual but occur at key events or periodic intervals.

CAA, Transparency, and RxDC Reporting: Growing 2025 Priorities

The Consolidated Appropriations Act (CAA) has shifted employer responsibilities significantly over the past two years. Several elements continue to carry strict enforcement:

Prescription Drug Data Collection (RxDC Reporting)

• For the 2024 plan year, RxDC reporting is due June 1, 2025.​ (For the 2025 plan year, it will be June 1, 2026).
• Employers sponsoring group health plans (including self-insured plans) must coordinate with carriers or third-party administrators (TPAs) to collect and submit specified prescription drug cost and utilization data to CMS.
• Data submission must follow federal standards for accuracy, completeness, and timeliness.

Gag Clause Attestations

• The CAA prohibits group health plans and insurers from entering into agreements that restrict access to cost or quality information (“gag clauses”) for covered individuals.
• Attestation that no gag clauses exist is required annually, generally due by December 31 each year.
• Employers must confirm this with their carrier, TPA, or plan adviser; the attestation is transmitted via an official CMS portal.

Transparency in Coverage (TiC) Rules

• Machine-readable files (MRFs) detailing in-network negotiated rates, out-of-network allowed amounts, and prescription drug pricing must be publicly accessible.
• Employers should confirm that their carrier or TPA is complying and that their plan’s data files are hosted on a public-access website, not behind a login or paywall.
• Enforcement is ongoing, and CMS inspects compliance as part of federal audits.

Compliance Focus for 2025

• Federal agencies, including CMS and DOL, have heightened enforcement and scrutiny of these data transparency rules for 2025.
• Employers should review compliance calendars and closely coordinate responsibilities with benefit vendors to avoid penalties and meet new deadlines.

Mental Health Parity: Increasing Enforcement in 2025

The Mental Health Parity and Addiction Equity Act (MHPAEA) continues to be a top audit area. Employers should ensure:

• NQTL comparative analyses are complete.
• Prior authorization and step therapy rules align with parity.
• Mental health provider access is comparable to medical plans.

DOL audits are increasing, making this an essential year-end review item.

Telehealth & Virtual Care Considerations

Temporary pandemic-related telehealth flexibilities have expired. Employers with HDHP plans must ensure:

• Telehealth benefits comply with HDHP rules.
• SPD language and plan operations align.

2025 Employee Benefits Compliance Checklist

Navigating employee benefits, reporting rules, and evolving compliance requirements can be overwhelming this time of year. Dean & Draper is here to guide you through every step, from ACA filings to plan design updates to annual notices.

Contact Dean & Draper today to schedule your 2025 year-end benefits review and stay ahead of compliance with confidence.

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