While large employers—50 or more full-time and full-time equivalent employees—must offer affordable coverage or pay a penalty, small businesses are free to decide whether to offer coverage and what type of coverage they will be. Health insurers usually announce their premiums for the coming year during the summer months, which makes now an ideal time for businesses to prepare for coverage in 2026.
The law requires employers, regardless of size, to give notice about health coverage to employees by set dates—depending on the situation. Get ready now to select your coverage so you can provide timely notice to employees of your health coverage plans for the coming year. This blog focuses on notice requirements.
Notice Requirements for Health Coverage Plans
Group Health Plans
If you offer a group health plan to employees, you must annually provide a summary of benefits and coverage (SBC). This is so whether you are in the large group market or small group market. The large group market is for employers with 51 or more employees (more in some states), while the small group market is for businesses with 2-50 employees.
Notice deadline: If your plan automatically renews, distribute SBCs no later than 30 days before the new plan year begins. This means no later than December 2, 2025, for a calendar-year health plan. In the case of employees hired during the year, the deadline in 14 days of commencing employment.
Health FSA
Health flexible spending accounts (FSAs) permit employees to make salary reduction contributions up to a set dollar limit (the dollar limit for 2026 has not yet been announced). Employees commit to their contribution for the year, which can only be changed during the year on a prospective basis if there is a “change in status” (e.g., marriage; divorce; death of a spouse; reduction in work hours).
Notice deadline: The notice requirements applicable to group health plans apply to health FSAs. This means enrollment materials must be distributed at least 30 days before the start of the new year (60 days advance notice if there is a mid-year change in health FSA rules). Regulations spell out all the situations in which a change can be made mid-year.
ICHRAs
Individual Coverage Health Reimbursement Accounts (ICHRAs) are arrangements in which employers reimburse employees for their individually-obtained coverage. The company sets the reimbursement amount. ICHRAs can be used by employers of any size, although large employers (subject to the ACA employer mandate) have to meet special conditions.
Notice deadline: At least 90 days before the plan year begins (i.e., October 3, 2025, for a plan starting January 1, 2026).
QSEHRAs
Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) also enable employers to reimburse employees for the health insurance they obtain themselves, up to a set dollar limit fixed annually. The limits for 2026 have not yet been announced.
Notice deadline: At least 90 days before the plan year begins (i.e., October 3, 2025, for a plan starting January 1, 2026). For someone hired during the year, as soon as reasonably practicable. The failure to provide timely notice can result in a penalty of $50 per employee (up to $2,500 per year).
HSAs
If your company maintains a high-deductible health plan (HDHP) (see above for group health plan notice requirements) and also contributes to employees’ Health Savings Accounts (HSAs), you have to provide certain written notice informing them of eligibility to open an HSA, and if they don’t open an account, that the company won’t make contributions on their behalf.
Notice deadline: If an employee is enrolled in the HDHP and the company intends to make HSA contributions, the company must provide notice by January 15 of the following year (e.g., January 15, 2026, for the 2025 tax year). The notice must specify that employees open their HSAs and notify the employer no later than the last day of February in order to receive contributions. (Since February 28, 2026, is a Saturday, the deadline is March 2, 2026.) If they don’t open an account or notify the employer, the company doesn’t have to make contributions. Assuming that the employer receives notice that the employee has opened an account, the contribution must be contributed no later than April 15 (e.g., April 15, 2026, for the 2025 contribution).
COBRA coverage
If your company has a group health plan and at least 20 employees, you are subject to COBRA, meaning you must offer certain coverage continuation to departing employees and certain related parties.
Notice deadline: Notice of eligibility for COBRA coverage must be given within 44 days after the qualifying event (e.g., termination of employment; reduction in hours) and the resulting loss of group health plan coverage. If a company uses a third-party plan administrator, the company must notify the third-party administrator within 30 days, and the administrator has 14 days to send an election notice to the individual (employee, former employee, or qualified beneficiary). Then the individual has 60 days from the date of the notice (or the date coverage would otherwise end if it’s later) to elect COBRA continuation coverage.
Final thought
Large companies have HR departments that track all of the notice requirements. Small employers may not have dedicated employees to handle notice requirements. What to do?
- Consider creating a calendar of notice requirements (not only for health coverage, but also for actions related to qualified retirement plans and for tax payment and filing deadlines).
- Use a third-party administrator for employee benefit plans. This is a Professional Employer Organization (PEO), which is a company that acts as a co-employer and handles payroll obligations, including notice requirements (e.g., Paychex PEO; ADP TotalSource; Justworks; Insperity).
- Rely on software to handle HR obligations (e.g., Rippling; Gusto).
Find more about employee health insurance in this list of blogs here.
