With the tax rate, bracket and standard deduction changes set to Compare 2026 plans, consider planning ahead with your wealth advisor to optimize your taxable income.
For example, if you plan to itemize deductions next year, consider contributing to an after-tax Roth account. Also, if you’re eligible, consider taking advantage of the 2026 super catch-up contributions.
Cost-Sharing Limits
The Centers for Medicare & Medicaid Services (CMS) recently published its 2026 proposed Notice of Benefit and Payment Parameters (NBPP). This expert perspective focuses on provisions in the NBPP that could affect State policies.
Under the ACA, group health plans must comply with annual limits on cost sharing. These limits apply to deductibles, coinsurance, and copayments for essential health benefits covered by the plan.
In 2026, the ACA maximum out-of-pocket limit will rise to $10,150 for self-only coverage and $20,300 for other than self-only coverage, which represents an increase of 10.3 percent from the current limits.
In 2026, fewer stand-alone Part D prescription drug plan (PDP) options will be available to enrollees receiving low income subsidy (LIS) than in previous years. Less than one-fifth of the PDPs will be designated as benchmark plans, compared to nearly 90% in 2024. The reduced number of LIS-benchmark plan availability will result in higher out-of-pocket costs for those beneficiaries.
Enhanced Catch-Up Contributions
Many plan sponsors are currently focused on implementing required provisions of the SECURE Act of 2022. Once these are implemented, they will likely shift their attention to some optional provisions — including the requirement that high-earning participants make catch-up contributions to a Roth account and a student loan repayment match.
As you may know, the SECURE Act of 2022 included a provision that would require participants age 50 and over who earn at least $145,000 in wages in a single calendar year to contribute their catch-up contributions on a Roth basis. This was originally scheduled to take effect in 2024 but was delayed until 2026.
In order to comply with this rule, plans must adjust their contribution schedules and provide additional education to employees. Beck Group plans to implement this change by January 1, 2026, and will be educating participants about the long-term benefits of after-tax Roth contributions. It also will conduct a targeted outreach campaign through its financial wellness program to those who will be impacted.
Student Loan Repayment Match
Congress included in SECURE 2.0 a new student loan match feature that allows 401(k) plan sponsors to make matching contributions based on employee loans and repayments. This is a welcome development, although more guidance would be helpful to understand what kinds of loan repayments can be matched (e.g., a qualified student loan payment must be made on behalf of the participant or their spouse), and how this may affect existing rules for nondiscrimination testing.
The PLR approach in 2023 was limited in its scope and did not provide relief from testing complexities, but the SECURE 2.0 student loan repayment match rule avoids those complexities and provides welcome relief. Moreover, the rules allow such matches to be added to safe harbor plans mid-year, provided the other requirements of the safe harbor are met. This may be a key opportunity for employers to address student loan repayment concerns in their employees. Explore options with our student loan repayment calculator to see how much your monthly payments might be in an Income-Driven Repayment (IDR) plan.
Employer Match
Many small businesses offer employer match on employee contributions, often up to a certain dollar amount or percentage of income. This is an excellent incentive for employees to save, and many financial planners recommend that people max out their employer match, if possible.
Employer matches often come with vesting schedules, which determine when employees can claim full ownership of the matched funds they’ve earned. Some employers use a graded vesting schedule, which allows employees to earn full ownership over a number of years; others use a cliff-based vesting model, which grants full ownership after a specified period of time, such as three years.
Employer-match programs can also open retirement savings opportunities for part-time workers. With dual eligibility requirements, which allow employees to make elective deferrals and receive their employer match after they meet service or age criteria, the ability to define entry dates (monthly, quarterly, or semi-annually) allows you to manage enrollment meetings and entry dates for new hires based on the plan’s entry schedule.
