Regulatory Updates – North Risk Partners

Nebraska Enacts New Mini-WARN Act

Jarrica Walston — Tue, 07 Jul 2026 13:36:46 +0000

Nebraska employers planning significant workforce reductions should be aware of a new compliance requirement.

Effective July 18, 2026, Nebraska's Worker Adjustment and Retraining Notification Act (Mini-WARN Act) requires certain employers to provide advance notice before qualifying business closings or mass layoffs.

Employers with operations in Nebraska should understand whether the new law applies to them and update their workforce reduction planning processes accordingly.

When the Law Applies

The law applies to employers with 100 or more employees, excluding part-time employees.

For purposes of the law, a part-time employee generally means an employee who works an average of 19 or fewer hours per week or has been employed for fewer than six of the 12 months preceding the date notice is required.

Covered employers generally provide 90 days' advance written notice before certain business closings or mass layoffs. A business closing occurs when a temporary or permanent shutdown of a single site of employment, or one or more facilities or operating units at the site, results in an employment loss for 100 or more employees, excluding part-time employees. A mass layoff occurs when a reduction in force that is not tied to a business closing results in an employment loss of 100 or more employees at a single site of employment during any 30-day period, excluding part-time employees.

For purposes of the law, an employment loss generally includes an involuntary termination (other than for misconduct), a layoff lasting more than six months, or a reduction in an employee's work hours of more than 50% for six consecutive months.

Employers should also be aware of the law's 90-day aggregation rule. Separate layoffs or workforce reductions that occur within 90 days may be combined when determining whether notice requirements apply. As a result, employers planning phased workforce reductions should evaluate the total impact of employment losses rather than reviewing each action independently.

Notice Requirements

Covered employers must generally provide written notice to affected employees and the Nebraska Department of Labor at least 90 days before a qualifying business closing or mass layoff.

The notice must include:

Employment site name and address
Employer contact information
Whether the action is temporary or permanent
Expected dates and schedule of employment losses
Names and job titles of affected employees
Copies of all employee handbooks, personnel policies, and employment-related policies, or instructions on where those materials can be accessed online

In addition, employers must post the notice in a visible workplace location and in any language spoken by at least 5% of the workforce.

The law does include limited exceptions that may allow employers to provide less than 90 days' notice in certain circumstances, including:

Unforeseeable business circumstances
Natural disasters
Business closings where the employer was actively seeking capital or business

Employers relying on one of these exceptions must still provide notice and explain why the full notice period could not be met.

Nebraska also allows employers to provide pay or severance instead of the full notice period, as long as employees receive at least the same amount they would have earned if they had worked through the required notice period.

What Employers Must Do

Review Workforce Reduction Procedures

Update any reduction-in-force or workforce planning procedures to account for Nebraska's new notice requirements.

Identify Who Will Manage WARN Notices

Determine who within your organization will be responsible for preparing, reviewing, and distributing required notices.

Review Employee Policies and Handbooks

Since notices must include access to applicable employment policies, employers should confirm that handbooks and workplace policies are up to date and readily accessible.

Evaluate Workforce Language Needs

Review employee demographics to determine whether any language groups meet Nebraska's 5% threshold for translated workplace postings.

The biggest takeaway for Nebraska employers is simple: start the WARN analysis earlier.

Organizations considering significant workforce reductions should build Nebraska's notice requirements into the planning process from the beginning rather than addressing them after decisions have already been made.

If you have questions about this blog, please contact your North Risk Partners advisor. Don't have an advisor? No problem. We'll help you find one.

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This blog was written in partnership with Wagner, Falconer, & Judd. Wagner, Falconer, & Judd (WFJ) is a firm with 70 employees based in the Midwest, serving clients across the country. With roots dating back to 1932, WFJ works with businesses of various sizes and industries. The firm specializes in human resources and employment law, commercial collections, civil litigation, and more.

This provides general information and does not constitute legal advice. 

Minnesota’s Minimum Wage Increase for 2026

Ali Souza — Fri, 20 Mar 2026 19:26:39 +0000

Minnesota's minimum wage increased on January 1, 2026, as part of the state's annual adjustment for inflation. Employers across the state should understand the updated rates, how city‑specific laws differ from statewide requirements, and what steps are needed to stay compliant.

Minimum Wage Changes

As of January 1, 2026, Minnesota increased its statewide minimum wage from $11.13 to $11.41 per hour. At the same time, the 90-day training wage for employees under 20 increased from $8.85 to $9.31 per hour.

These new statewide rates apply to all employees working in Minnesota except those working in Minneapolis or St. Paul, which have their own minimum wage ordinances with higher rates.

Additionally, there are a couple of statewide reminders for employers to remember:

Minnesota's new minimum wage law applies to all hours worked, including full-time, part-time, and seasonal employees.

This new minimum wage law applies to all employees regardless of pay structure, such as hourly, salary, or commission pay.

Employers also cannot count employees' tips towards meeting minimum wage requirements. Employees who earn tips must still receive at least the full minimum wage per hour, in addition to any tips they receive.

Minneapolis Minimum Wage Changes

Employers with employees working in Minneapolis are subject to a separate minimum wage ordinance. As of January 1, 2026, the Minneapolis minimum wage increased from $15.97 to $16.37 per hour. This new rate applies to all employers, regardless of their business size.

St. Paul Minimum Wage Changes

St. Paul's minimum wage changes vary by employer size and include changes in both January and July 2026.

As of January 1, 2026, for employers with at least 101 employees, the minimum wage increased from $15.97 to $16.37 per hour.

For smaller employers, additional increases are scheduled for July 1, 2026.

Employers with 6 to 100 employees will see their minimum wage increase from $15.00 to $16.37 per hour.

Employers with 5 or fewer employees will see their minimum wage increase from $13.25 to $14.25 per hour.

What Employers Must Do

1. Update Minimum Wage Posters

All Minnesota employers must update their workplace minimum wage poster to reflect the 2026 rates. Posters must be displayed in a visible, accessible location for employees.

2. Provide Written Notice

Employers are required to provide employees with written notice of any changes to their pay rate before the new rate takes effect.

The Minnesota Department of Labor and Industry provides the required written notices and posters on its official website here. The written notices are at the top of the page, with the downloadable posters listed further down.

These 2026 updates reflect Minnesota's annual inflation adjustments and help ensure employees are paid fairly based on the local cost of living. Employers should review their payroll, update required notices, and ensure compliance before the effective dates.

If you have questions about this blog, please contact your North Risk Partners advisor. Don't have an advisor? No problem. We'll help you find one.

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This provides general information and does not constitute legal advice. 

Employer Rights & Responsibilities During ICE Visits

Jarrica Walston — Sun, 25 Jan 2026 14:39:06 +0000

Immigration-related workplace visits and audits can occur with little or no warning. While these situations can feel stressful, employers do have rights and responsibilities-and a clear plan can help protect operations, employees, and legal compliance.

Below is a straightforward overview of what business owners and managers should know.

1. I-9 Audits: What Happens & What You Must Do

All employers must complete Form I-9 for every employee, regardless of citizenship or immigration status. If U.S. Immigration and Customs Enforcement (ICE) chooses your business for an audit, here's what to expect:

How an I-9 Audit Begins

ICE serves a Notice of Inspection-a subpoena or warrant is not required

You have three business days to provide the requested I-9 forms

ICE may request additional items such as payroll records or work authorization copies

Why Accuracy Matters

Civil fines typically range from $281 to $2,789 per I-9 violation

Employers who knowingly hire individuals without work authorization may face additional penalties

If ICE Flags Issues

ICE may identify employees who need updated work authorization documents

Employers are usually given 10 days to provide valid proof or terminate employment

You may request additional time and should notify affected employees promptly

If your workforce is unionized, you may need to share audit information with the union

2. ICE Visits: Understanding Warrants & Access

ICE may arrive at a workplace without advance notice. The type of warrant they carry determines what they can legally access.

Judicial Warrant

A judicial warrant is:

Signed by a federal or state judge

Dated within the past 14 days

Specific about what or where ICE is authorized to search

A judicial warrant allows ICE to enter private areas of your business. Employers must comply.

Here is a sample judicial warrant.

Administrative Warrant

An administrative warrant:

Is issued by the Department of Homeland Security

Often labeled Form I-200 or Form I-205

Does not allow ICE to enter non-public workplace areas without permission

You may deny ICE entry to private spaces if they only have an administrative warrant.

Here is a sample administrative warrant.

Public vs. Private Areas

ICE may enter without permission
- Public areas: lobby, parking lot, dining area
Private areas: offices, back rooms, employee-only spaces
- A judicial warrant is required unless you give consent

3. What Employers Should Do if ICE Arrives

A calm, organized response protects your business and your employees.

Step-by-Step Guidance

Notify your internal chain of command and/or legal counsel immediately

Determine whether ICE has a judicial or administrative warrant

If ICE asks to enter without a warrant, you may decline

Have a designated representative accompany agents at all times

Document what you see-recording is allowed

Employees may speak with ICE or choose not to. Employers should not direct them either way.

Ensure staff do not interfere with the agents' actions

4. How Employers Can Prepare in Advance

Planning ahead reduces stress and prevents legal missteps.

Maintain organized and accurate I-9 files

Conduct routine internal I-9 audits

Create a written response plan for unexpected visits

Train managers on how to identify warrant types and how to respond

Know who your legal contacts are before an issue arises

Communicate factual, calm information to employees

Keeping Your Business Prepared & Protected

Understanding the basics of workplace enforcement helps leaders act confidently and within the law.

If you have questions about this blog, please contact your North Risk Partners advisor. Don't have an advisor? No problem. We'll help you find one.

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This provides general information and does not constitute legal advice. 

Changes for Contractors: Minnesota’s Zero Exposure Work Comp Law

Jarrica Walston — Wed, 12 Nov 2025 17:43:08 +0000

Starting January 1, 2026, Minnesota's workers' compensation system will be updated, placing new responsibilities on construction contractors. The new law focuses on “zero estimated exposure policies” (often referred to as “if-any” policies) and aims to create more transparency and accountability within the construction industry.

What is a Zero Estimated Exposure Policy?

A zero estimated exposure policy allows businesses to report no payroll because they often operate without employees. Sole proprietors or small contractors who subcontract their work frequently use this policy. While it can save money on insurance costs, it carries risks such as a lack of coverage and the possibility of misleading practices.

Key Changes Under the New Law

Under the new legislation, contractors who obtain a zero estimate exposure policy must:

Provide a signed attestation to their insurance carrier confirming they do not have employees or payroll
Notify contracting partners about their zero exposure policy status in writing
Share their insurance policy with every entity they contract with for construction services
Notify their insurance company within 60 days if they hire employees or begin to incur payroll expenses

Why This Matters for All Contractors

Contractors who hire subcontractors for construction services who use a zero estimated exposure policy must:

Obtain written notice confirming that the subcontractor uses a zero estimated exposure policy and receive a copy of this policy
Retain the notice and the policy copy for three years from the date they are received

This is especially important given the new law, which states that if an individual working on a project is injured and there is no insurance coverage, the contractor may be held liable for the injury.

Additionally, contractors will need to review and update contracts to ensure compliance with the new disclosure requirements. This includes incorporating clauses that require subcontractors to provide proof of workers' compensation coverage and to notify of any changes.

The Minnesota Department of Labor and Industry will have an updated tool to check whether a contractor has a zero estimated-exposure policy once the law becomes effective. For more details, visit the official page here.

What You Can Do Now

This law is part of a larger effort to protect workers, reduce fraud, and ensure fair competition in the Minnesota construction industry. By improving transparency, it aims to help project owners and contractors identify potential coverage gaps early on, minimizing conflicts and legal troubles later.

To prepare for these changes, review your insurance policies and update your internal processes. It's recommended to consult with your legal advisors to ensure compliance with the new law before it takes effect. At North Risk Partners, we're here to help you navigate these changes and ensure your business stays compliant and protected.

If you have questions about the Minnesota Zero Estimated Exposure Workers' Compensation Law, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.

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This blog was written in partnership with Hellmuth & Johnson. Hellmuth & Johnson, a Top 15 Minnesota law firm, represents clients ranging from individuals and emerging start-ups to multinational Fortune 500 companies. The firm specializes in contract law, transactional law, litigation, and more. Founded in 1994, Hellmuth & Johnson has become one of Minnesota’s fastest-growing law firms.

This provides general information and does not constitute legal advice. The laws and regulations change frequently, which means the information provided herein may be outdated.

Updated PCORI Fees Announced

Jarrica Walston — Tue, 11 Nov 2025 15:16:56 +0000

The Affordable Care Act (ACA) created a nonprofit corporation, the Patient-Centered Outcomes Research Institute (PCORI) to support clinical effectiveness research for healthcare. Information about the institute’s research and impact can be found here. The institute is funded in part by fees paid by health insurers and sponsors of self-funded health plans (PCORI fees), which are reported and paid annually in the second quarter using Form 720.

The latest updated fee amount for plan years ending in October 2025 – September 2026 is $3.84 per covered life as set forth in IRS Notice 2025-61 - Internal Revenue Bulletin: 2025-45 | Internal Revenue Service.

General summary information regarding reporting and paying PCORI fees can be found here.

Plans Subject to the Fee

The PCORI fee applies to most group health plans, but not to excepted benefits. Health reimbursement arrangements (HRAs) and retiree-only plans are subject to the PCORI fee, but most health flexible spending arrangements (FSAs) qualify as excepted benefits and are not subject to the fee. The IRS published a chart that describes the different types of plans subject to the fee here.

The Consolidated Appropriations Act, 2020 extended the PCORI fees another 10 years to 2029.

For fully-insured plans, the health insurance carriers report and pay the fee (the employer should not have to do anything). For self-funded group health plans, including HRAs and retiree-only plans, employers are responsible for reporting and paying the fee.

Note: Qualified small employer HRAs (QSEHRAs) and individual coverage HRAs (ICHRAs) are subject to the PCORI fee.

Reporting the Fee

The fee is paid using quarterly excise tax Form 720, Line 133 (133(c) and (d) for self-funded plans) and must be paid no later than July 31st of the year following the last day of the plan year; for example, the PCORI fee is due by July 31, 2026, for any plan years ending during 2025. The fee must always be reported in the 2nd quarter (for the quarter ending June 30), regardless of the employer’s plan year. For employers that do not otherwise file quarterly excise taxes, the Form 720 might only be filed for the second quarter each year to report the PCORI fee.

Payment amounts are increased annually and differ based on the ending date of the employer’s plan year. The fees for plan years ending in 2025 are below:

For Plan Years Ending In...	Applicable PCORI Fee
January - September 2025	$ 3.47
October - December 2025	$ 3.84

Calculating the Average Covered Lives

Self-funded plans may use one of three methods to determine the average covered lives used for reporting and paying the PCORI fee. Plan sponsors must stick with one method for the entire plan year, but can change methods from year to year. COBRA participants and retirees should be counted, regardless of which method below is chosen.

Actual Count Method:

Calculate the lives covered for each day of the plan year and divide by the number of days in the plan year.

Snapshot Method:

Add the lives covered on a consistent date each month or quarter and divide the total by the number of dates on which a count was made (e.g., divide by 12 if the count is done each month, or by 4 if the count is done each quarter). Under the snapshot method, there are two methods for counting family members:

Count the actual lives covered on the designated date; or
Count the participants with self-only coverage on the designated date, plus the participants with coverage other than self-only coverage on the designated date multiplied by 2.35.

Form 5500 Method:

Use the participant count reported on the Form 5500 for the plan year. The number of average covered lives is determined by adding the participant counts at the beginning and the end of the plan year. However, if a plan offers only single coverage, the final result is divided by 2. Note: This method may be used only if the Form 5500 is filed no later than the due date for the fee imposed for that plan year.

Short Plan Years: IRS guidance clarifies there is no pro-rating for short plan years. If the employer is using the actual count method, the total is divided by a lesser number of days due to the short plan year; if the snapshot method is used, the total is divided by the number of months or quarters of the short plan year.

There are two special rules that apply for counting covered lives when an employer offers multiple self-funded plans or offers an HRA integrated with a fully-insured group medical plan.

1. Multiple Self-Funded Plans

If one plan sponsor maintains more than one self-funded health plan with the same plan year, the arrangements can be treated as a single plan for purposes of the fee (i.e., each unique covered life is only counted once). For example, if the employer offers a self-funded group medical plan and an integrated HRA, the employer could base the fee of the covered lives for the group medical plan and disregard the HRA (because the same individuals are covered under both plans).

2. HRAs (and health FSAs not meeting excepted benefit status)

An employer who sponsors an HRA integrated with a fully-insured medical plan is required to pay the fee only with respect to each HRA participant/employee; the employer is not required to count dependent or beneficiaries.

Failure to Pay the Fee

For a failure to file, it is generally advisable to file a Form 720 for the applicable year (or Form 720X for an amendment) as soon as possible for any missed fees and then to pay any associated fines or penalties the IRS may assess. A separate Form 720 should be filed for each missed plan year rather than paying fees for multiple plan years on the same Form 720.

Since this PCORI fee is considered an excise tax, Code §6651 sets forth the following penalties for failure to file a return or pay a tax.

For failure to file the Form 720, the penalty is 5% of the excise tax due for each month or part of a month the return is late, with a cap of 25% of the unpaid tax.
For failure to pay the PCORI fee, the penalty is .5% of any tax not paid by the due date for each month or part of a month the tax remains unpaid, up to 25% of the unpaid tax.

On top of the penalties, interest can be charged on unpaid excise taxes. On the other hand, in some cases, penalties may be waived if the plan sponsor has reasonable cause and the failure to pay was not due to willful neglect.

If you have questions, please contact your North Risk Partners Risk Advisor. Don’t have an advisor? No problem. We’ll help you find one.

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This legal update 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.

Affordability Percentage Will Increase for 2026

Jarrica Walston — Tue, 11 Nov 2025 15:12:03 +0000

On July 18, 2025, the IRS released Revenue Procedure 2025-25 to index the contribution percentage in 2026 for determining the affordability of an employer’s health plan under the Affordable Care Act (ACA). For plan years beginning in 2026, employer-sponsored coverage will be considered affordable under the ACA’s “pay-or-play” rules if the employee’s required contribution for self-only coverage does not exceed 9.96% of their household income for the year.

Affordability Test

The ACA’s pay-or-play rules require applicable large employers (ALEs) to offer affordable, minimum-value health coverage to their full-time employees (and dependents) or risk paying a penalty. The affordability of health coverage is a key point in determining whether an ALE may be subject to a penalty. An ALE’s health coverage is considered affordable if the employee’s required contribution to the plan does not exceed 9.5% (as adjusted annually) of the employee’s household income for the taxable year. This percentage is adjusted each year based on health plan premium growth rates in relation to income growth rates.

In recent years, the affordability percentage has been adjusted to:

9.12% for plan years beginning in 2023;
8.39% for plan years beginning in 2024;
9.02% for plan years beginning in 2025;
9.96% for plan years beginning in 2026.

For purposes of the pay-or-play rules, the affordability test applies only to the portion of the annual premiums for self-only coverage. It does not include any additional cost for family coverage. Also, if an employer offers multiple health coverage options, the affordability test applies to the lowest-cost option that provides minimum value.

Because an employer generally will not know an employee’s household income, the IRS has provided three optional affordability safe harbors that ALEs may use to determine affordability based on information that is available to them: the Form W-2 safe harbor, the rate of pay safe harbor, and the federal poverty level safe harbor.

Affordability Percentage for 2026

For 2026, the affordability percentage increases to 9.96%. This means that an ALE’s health coverage for the 2026 plan year will be considered affordable if a full-time employee’s required contribution for self-only coverage under the lowest-cost option does not exceed 9.96% of their income. This is a significant increase from the affordability contribution percentage for 2025 and the highest this percentage has ever been. As a result, employers may be able to increase employees’ health coverage contributions for 2026 while still meeting the adjusted affordability percentage.

If you have questions, please contact your North Risk Partners Risk Advisor. Don’t have an advisor? No problem. We’ll help you find one.

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This legal update 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.

Final Instructions for 2025 ACA Employer Reporting

Jarrica Walston — Tue, 11 Nov 2025 15:09:21 +0000

Certain employers, plan sponsors, and insurers are required to report health plan information and participant coverage data to the IRS each year. The IRS uses this information to administer and regulate various aspects of the Affordable Care Act (ACA), including an individual’s eligibility for a premium tax credit when purchasing health insurance through a public Marketplace and the §4980H employer shared responsibility rules. Failure to report complete, accurate, timely information can result in significant reporting penalties up to $340 per form.

Employer Reporting Responsibilities

Applicable Large Employers (ALEs)

All ALEs (those with at least 50 full-time equivalents (FTEs)) are required to report on offers of coverage to full-time employees. ALE status is determined by averaging FTEs for the previous calendar year. For example, if an employer averaged 50 or more FTEs during 2024 (alone or as part of a larger controlled group or affiliated service group), the employer is an ALE for 2025 and required to report offer of coverage information early in 2026 (for the 2025 calendar year). ALEs report offer of coverage information using Forms 1094-C and 1095-C. Offer of coverage reporting on the “C” forms will never be handled by the carrier; instead, it must be done by the employer or a vendor on behalf of the employer.

Employers Offering Self-Funded Group Health Plan Coverage

Any size employer who provided self-funded (including level-funded) coverage during 2025 must report coverage information for all individuals enrolled in the plan, including employees, non-employees (e.g., owners, retirees, COBRA participants), and their spouses and dependents. Small employers (<50 FTEs, non-ALEs) report this coverage information using Forms 1094-B and Form 1095-B. ALEs generally report this coverage information in Part III of the Form 1095-C.

Timing of Reporting

Employer reporting is required annually and is done early in the year for the previous calendar year. Reporting is based on calendar year data (even for employers with a non-calendar year medical plan).

2025 Reporting Deadlines
Distribution of Form 1095s to employees and covered individuals	Due March 2, 2026
Submission of Form 1094 and all Form 1095s to the IRS	Due March 31, 2026

Reporting Method of Delivery

Distribution to Individuals

The options for distribution of Form 1095s are: (i) hand delivery; (ii) mail; (iii) electronically if individuals consent to electronic delivery; or (iv) NEW as of 2024—post a notice of availability.

Posting Notice of Availability

Distribution to individuals can be satisfied by providing a “clear, conspicuous and accessible notice” that the forms are available upon request. The notice must include an email address, physical address, and telephone number that can be used to request a copy of Form 1095. Notice must be posted on the employer’s public-facing website so that it is accessible to all possible Form 1095 recipients. The notice must be posted by March 2 and remain posted through October 15. If a Form 1095 is requested, it must be provided within 30 days and would have to be hand-delivered or mailed unless the employer obtains consent to provide Form 1095 electronically.

IRS Submission

For almost all employers, Form 1094 and all Form 1095s must be submitted to the IRS electronically.

Electronic Filing Requirements

Employers who file 10 or more tax forms must file electronically (previously only those filing 250 or more forms were required to file electronically). The count includes not only Form 1094 and Form 1095s, but also any other information or tax returns the employer may file during the year (e.g., W-2s or 1099s), and therefore, almost all employers will be required to file electronically. This is also true for any corrections that may need to be filed. Most employers use the services of a vendor or reporting software to handle the electronic transmittal to the IRS.

State Coverage Reporting

A handful of states (CA, MA, NJ and RI) and D.C. have individual coverage mandates requiring residents to have minimum essential coverage or pay a state tax penalty. To enforce these mandates, these states require group health plans, both fully-insured and self-funded, to report coverage information to the states. Employers offering group health plans with covered individuals residing in these states may be required to send reporting to the state tax department in addition to the coverage information submitted to the IRS. In most cases, the same Form 1094 and Form 1095s can be sent to the applicable state tax department to satisfy the reporting requirement. Note: Posting notice of availability for Form 1095s as permitted by the IRS may not satisfy state distribution requirements.

Resources

IRS forms and instructions for 2025 reporting (due in early 2026) can be found on the IRS website.

If you have questions, please contact your North Risk Partners Risk Advisor. Don’t have an advisor? No problem. We’ll help you find one.

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This legal update 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.

Annual FSA Contribution Limits

Jarrica Walston — Tue, 11 Nov 2025 15:02:02 +0000

Health flexible spending arrangements (FSAs) offer tax-advantaged reimbursement for qualifying medical expenses. The IRS sets limits on the amount individuals can benefit from this arrangement on a tax-favored basis. Additionally, FSAs are subject to various rules about annual contribution and reimbursement limits, which can often lead to confusion. Below are the details regarding how these annual FSA contribution and reimbursement limits apply.

Health FSAs - Plan Year Contribution Limits

The health FSA salary reduction limit (e.g., $3,400 for 2026) applies on a plan year basis. For example, a health FSA with an April – March plan year could allow employees to elect to contribute up to $3,400 for the April 2026 – March 2027 plan year. The limit applies to employee contributions, so employers could contribute in addition to the 2026 $3,400 contribution limit (subject to excepted benefit rules, which limit employer contributions to the greater of $500 or a match of the employee’s contributions).

The limit applies per employee, not on a household basis, so if both spouses are employed and eligible for health FSA coverage, each spouse could contribute up to $3,400 for 2026. In addition, the limit applies on a per-employer basis, so an employee who works for two unrelated employers (i.e., not part of a controlled group or affiliated service group), whether simultaneously or at different times during the same plan year, may elect up to $3,400 in 2026 under each employer’s health FSA.

For a short plan year, the employer is required to pro-rate the annual contribution limit (e.g., ½ of the annual limit for a 6-month short plan year). However, an employee who joins a health FSA mid-plan year may elect to make up to the full annual contribution limit ($3,400 for 2026). This is true even if the individual contributed to a health FSA under another unrelated employer’s plan during the same year.

Example:

Denise is hired by Employer A on May 6, 2026. Employer A offers a health FSA that runs on a calendar year. Denise elects to contribute $3,400 to the health FSA starting June 1, 2026. Denise is permitted to make the full annual election even though she is joining mid-plan year. She will be able to make contributions of $485.71/month to her health FSA for 7 months of coverage, and due to the “uniform contribution rule,” Denise’s full annual contribution election amount is available for reimbursement of claims beginning on June 1.

If you have questions, please contact your North Risk Partners Risk Advisor. Don’t have an advisor? No problem. We’ll help you find one.

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This legal update 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.

Understanding the Nebraska Healthy Families and Workplaces Act

Jarrica Walston — Fri, 22 Aug 2025 13:25:43 +0000

The Nebraska Healthy Families and Workplaces Act (HFWA) takes effect on October 1, 2025, providing paid sick leave for employees who work at least 80 hours a year in Nebraska. To stay compliant, employers must take several steps before the law goes into effect.

What action steps should employers be taking?

Employers must provide written notice of the HFWA to employees by September 15, 2025, or upon the start of employment, whichever is later.

A model employee notice and poster can be found on the Nebraska Department of Labor's website. Additionally, employers should review and update their existing policies to confirm they align with the HFWA requirements. If your current paid time off (PTO) policy already meets these requirements for paid sick time, you are not required to offer additional sick leave. It’s also important to evaluate whether to integrate sick leave with vacation time or keep these separate. This decision may have implications for potential payouts, so careful consideration is necessary.

The frequently asked questions from the Nebraska Department of Labor, listed below, can help you understand the upcoming changes, provide clear and accurate information to employees, and assist you in making informed policy decisions. The full list of questions can be found here.

Eligibility

Which employees are eligible to receive paid sick leave?

Does an employee need to work a certain number of hours or months before becoming eligible?

If an employee works for a Nebraska-based employer, but never physically works in Nebraska, are they eligible?

Sick Time Usage

What can employees use paid sick time for?

Paid sick time can be used:

To care for an employee’s or an employee’s family member’s mental or physical illness, injury, or health condition; need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or need for preventive medical care.
To attend a meeting for the employee’s child that is needed for the child’s mental or physical illness, injury, or health condition at the school or place where the child is receiving care.
When a public official orders the closure of an employee’s place of business due to a public health emergency.
When there is a need to care for the employee’s child whose school or place of care has been closed by an order from a public official due to a public health emergency.
When the employee needs to self-isolate or care for the employee or a family member when health authorities with proper jurisdiction, or a health care professional, have determined that the employee’s or family member’s presence in the community may jeopardize the health of others because of exposure to a communicable disease, whether or not the employee or family member has actually contracted the communicable disease.

Employees can use paid sick time for a family member's mental or physical illness. However, what does the HFWA define as a family member?

A family member is defined by the HFWA as any individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.

Examples of who meet this definition include:

A biological, foster, step, or adopted child; legal ward; or a child to whom the employee stands in loco parentis
A biological, foster, step, or adoptive parent; legal guardian; or a person who stood in loco parentis to the employee when the employee was a minor child
A grandparent or grandchild
A biological, foster, adoptive, or step sibling
Any of the previously listed family members of the employee’s spouse
A legally married spouse
Any individual whose close association with the employee is equivalent to a family relationship

Should employees provide notice before using paid sick time?

Do employees have to find someone to cover their shift in order to use paid sick time?

Can employers require reasonable documentation to verify an employee's use of paid sick time?

Yes, employers can request reasonable documentation if the employee has used paid sick time for more than three consecutive workdays.

Reasonable documentation includes documentation signed by a health care professional indicating that paid sick time is or was necessary.

If the employee or a family member did not receive services from a health care professional or if documentation can't be obtained from a health care professional in a reasonable time or without added expense, a written statement from the employee indicating that the employee is taking or took paid sick time for a qualifying purpose must be considered reasonable documentation.

Employer Size Requirements

Are employers with fewer than 11 employees excluded from paid sick leave?

Are there special requirements for small businesses with 11-19 employees?

What are the requirements for employers with 20 or more employees?

Front Loading, Carryover, & Pay Out

Can employers provide all paid sick time that employees are expected to accrue in a year at the beginning of the year?

Can an employee carry over all accrued but unused paid sick time in the following year?

Yes, the HFWA mandates that employers allow the carryover of all accrued but unused paid sick time into the following year. The employer, however, designates when the year starts and ends. There is no maximum carryover.

Alternatively, instead of carryover, the employer can choose to pay out accrued but unused paid sick time if the employee begins the new year at or above the minimum sick time requirement.

Can employers provide employees with their total annual paid sick time at the beginning of the year (front load) rather than having them accrue over time?

Is unused paid sick time required to carry over if employers pay out all unused time and front load the required hours at the beginning of the year?

Are employers obligated to pay out unused sick time upon employment termination?

Are employers with a PTO policy that combines sick time and vacation required to pay out unused PTO upon an employee's separation from employment?

If you have questions about the Nebraska Healthy Families and Workplaces Act, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.

Find an Advisor

This blog was written in partnership with Wagner, Falconer, & Judd. Wagner, Falconer, & Judd (WFJ) is a firm with 70 employees based in the Midwest, serving clients across the country. With roots dating back to 1932, WFJ works with businesses of various sizes and industries. The firm specializes in human resources and employment law, commercial collections, civil litigation, and more.

These FAQs provide general information and do not constitute legal advice. The laws and regulations for the Nebraska Healthy Families and Workplaces Act—effective October 1, 2025—may change before its effective date and, therefore, make the information provided in these FAQs outdated.

Minnesota Paid Leave: Exploring Plan Alternatives

Jarrica Walston — Tue, 29 Jul 2025 21:19:34 +0000

As we approach January 1, 2026, Minnesota’s new Paid Leave program is set to bring significant changes to the workplace for employers across the state. While the state-sponsored plan is one option, employers may find that the private plan options, known as equivalent plans, better suit their company’s needs. Understanding whether an equivalent plan is the right fit requires a clear look at the benefits, requirements, and compliance steps businesses need to navigate.

Defining Minnesota Paid Leave

Minnesota Paid Leave is a state-mandated benefit that offers eligible employees partial wage replacement for qualifying medical and family reasons. This program will be funded by premiums paid by both employers and employees, covering nearly all private and public employers in the state. For more information, watch our Paid Leave webinar and read our blog that addresses frequently asked questions about Paid Leave.

Advantages of Equivalent Plans

No state premium payments

Direct benefit payments

Flexibility

Requirements for Equivalent Plans

Plans must meet the following.

A minimum of 12 weeks of medical leave and/or family leave, depending on the type of plan
Coverage for the same qualifying reasons, including medical conditions, bonding with a child, care for a family member, military-related leave, and safety leave
Eligibility requirements that cannot be stricter than those of the state-run plan
Premiums charged to employees cannot exceed what they would pay under the state plan
Employees covered under the state-run plan must also be covered under the equivalent plan
Job protections that are at least equal to those provided by the state-run plan
Allow intermittent leave or reduced schedules
Not impose any additional restrictions or conditions beyond those in the state plan
Coverage that continues for 26 weeks after employee separation or until they start a new job
Continue benefits for former employees on approved leave

Requesting an Equivalent Plan Substitution

Employers who want to move forward with an alternative plan need to request an Equivalent Plan Substitution. First, make sure the Paid Leave Administrator and one or more accounts with Unemployment Insurance (UI) are set up. Visit Minnesota’s Employer accounts page for more information.

Once the accounts are set up, work with your North Risk Partners Employee Benefits Advisor to explore pre-approved plan options.

Then gather the following information.

Plan details, including the policy number, plan number, insurance carrier, and coverage effective dates (must cover one full year from the start of a quarter)
For self-insured plans: documentation must include coverage effective dates for the full year and plan details demonstrating comparability to the state program
Payment for applicable fees, depending on employer size and payment method

For more information on submitting requests as a multiple-entity employer, visit Minnesota's Equivalent Plans for Paid Leave webpage, scroll to the bottom, and find the expandable section.

Next Steps After Approval

Employee Notice Requirements

Employers with approved equivalent plans must provide written notice to employees within 30 days of the employee’s start date, or 30 days before collecting premiums, whichever is later.

The notice must include:

Confirmation that the plan offers all rights, protections, and benefits under the state-run program
Details such as the effective date of the plan, wage replacement benefits, leave, and employment protection benefits
Eligibility and premium contribution processes
Appeal rights and claim procedures

Employer Recordkeeping

Employers must securely maintain records related to an employee's equivalent plan benefits and provide copies of relevant claim information within 10 business days of an employee's request, at no cost to the employee.

Choosing the Best Path Forward

For some employers, equivalent plans could offer potential cost savings, faster processing of leave requests and benefit payments, and more control over the leave administration process.

However, equivalent plans come with strict compliance obligations. Employers must carefully weigh the benefits against the administrative responsibilities. If you’re considering this option, now is the time to start planning.

If you have questions about Minnesota Paid Leave, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.

Find an Advisor

This provides general information and does not constitute legal advice. The laws and regulations change frequently, which means the information provided herein may be outdated.