Charting the Changes: 2026 Benefit Plan Limitations

Preparations for open enrollment are in full swing, and U.S. total rewards (TR) professionals must collect various health and welfare plan contribution limits for 2026 as they design their plans.

While the TR community awaits Internal Revenue Service (IRS) announcements on retirement plan limitations (due in late October or November) …

• Certain health plan limits were announced in May (Rev. Proc. 2025-19).
• The Department of Health and Human Services released a final rule in June that included updated out-of-pocket annual limits for certain group health plans (which were notably retracted and increased from previously announced 2026 limits).

Additionally, H.R. 1 (otherwise known as the One Big Beautiful Bill Act), which President Donald Trump signed into law on July 4, introduced significant changes to benefit plans that TR pros can incorporate into their benefit plan designs for 2026 and beyond.

What’s New

What are some of White House’s significant H.R. 1 changes for which TR professionals should be aware?

• The annual educational assistance benefit under Section 127, which includes student loan repayment plans, was made permanent. The $5,250 annual limit also will be indexed for inflation starting in 2026. This is a combined limit of all qualified educational expenses (tuition, fees, books, student loan repayments, etc.).
• The annual contribution limit for dependent care assistance programs (DCAP) has been increased for the first time since 1986. Beginning in 2026, the annual limit increases to $7,500 ($3,750 if married filing separately). This is a new fixed amount and will not be indexed for inflation.
• Employees may participate in a direct primary care (DCP) arrangement and still make contributions to an eligible health savings account (HSA). DCP membership fees also can be paid with HSA funds.
• Any U.S. citizen under age 18 may open a new pilot savings plan (known as a “Trump Account”) with a social security number beginning Jan. 1, 2026; however, accounts may not be fully operational until July 4, 2026. Children born between Jan. 1, 2025, and Dec. 31, 2028, will receive a $1,000 deposit from the federal government into the account. Employers may contribute up to $2,500 per child per year (adjusted for inflation starting in 2027). The employer contribution will be excluded from employee gross income.
• The tax credit for employer-provided childcare rose significantly, increasing the credit for facility expenses from 25% to 40% (and to 50% for small businesses). Qualified expenses also were expanded to include payments to third-party agencies. The annual limits will be indexed for inflation.

Limits by Line Item

The following chart outlines the health and other benefit plan limitations for 2026 that have been released to date.

Check Out Our Full H.R. 1 Coverage

H.R. 1 has brought plenty of changes to organizations and their TR pros, and Workspan Daily is on top of it.

Access additional Workspan Daily articles related to H.R. 1:

• The Facts on Tax: Breaking Down the H.R. 1 Overtime, Tips Provisions
• How H.R. 1 Changes Your Section 127 and 529 Education Programs
• Prepare Your Systems for H.R. 1-Related Reporting and Administration
• New U.S. Law’s Family-Focused Savings Benefit: Will It Catch On?
• The Impact of the H.R. 1 Law on the Telehealth Safe Harbor

Access additional Workspan Daily Plus+ articles related to H.R 1:

• Checklist for Total Rewards to Be Compliant with H.R. 1 Provisions
• The Ripple Effect: 529 Plans as a Catalyst for Financial Stability
• What Are TR Pros’ Options for Paid Care Leave Design

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Benefits
• Total Rewards