Government employers are battling unfunded retiree health care obligations, but they may have a solution right in front of them. The “long-term price tag” of public sector employee benefits continues to grow, wrote Steve Schatt, senior director of WTW’s health, wealth and career business segment, and Christian Goodman, retiree health care strategist at WTW, in their recent article.

Parents with crushing child care expenses will get a little more help in 2026, from Trump’s new mega tax and spending law. The new tax law permanently increases the annual pre-tax contribution limit for dependent care flexible spending accounts, or DCFSAs, to $7,500 for married, joint filers. That’s up from $5,000 and is the first change since 1986, apart from a temporary pandemic-era boost in 2021.

When President Donald Trump signed into law H.R. 1, otherwise known as the One Big Beautiful Bill Act, on July 4, the bill reinstated and permanently extended the high-deductible health plan (HDHP) telehealth safe harbor for plan years beginning after Dec. 31, 2024.

Unfunded retiree health care debt is becoming an unsustainable financial burden for state and local governments, as the price tag for Other Post-Employment Benefits (OPEB) grows larger with medical inflation, while assets set aside to pre-fund these obligations remain low.

Flexible spending accounts are firmly entrenched in the benefits package for most American employers, particularly those with a large number of employees.

Health savings accounts (HSAs) and flexible spending accounts (FSAs) could potentially lead to higher spending for both employers and their employees.

Your employer may offer a health care or dependent care flexible spending account during open enrollment. Consider these alternatives before signing up.

The Inflation Reduction Act, a United States federal law passed in 2022, includes major changes to Medicare Part D intended to control prescription drug costs, cap maximum retiree out-of-pocket costs and simplify coverage for Medicare enrollees. This strengthening of Part D offers improved coverage for retirees as well as new risks and opportunities for employers that sponsor group Medicare Part D plans.

Sara Taylor, senior director of employee spending accounts at the benefits consultant WTW, suggests taking a close look at your past medical expenses before deciding how much to contribute to your F.S.A. “It’s hard to do, for some people,” she said. But looking at your “explanation of benefits” for last year — the forms that describe what treatments you had and what share of the cost you owe — can help you come up with a reasonable number.

As working arrangements continue to evolve, employers are reevaluating how to meet their employees' wellbeing needs and attract and retain talent with competitive benefits. One benefit that a growing number of employers are expressing interest in is the Lifestyle Savings Account (LSA).

As employers consider how to meet the needs of a diverse workforce—while also attracting and retaining talent in a strong job market—it’s no surprise that offering competitive benefits is a top strategy. But with so many potential offerings—and the costs that go along with them—employers are also trying to identify benefits that offer flexibility and appeal to a wide range of workers. One newer type of benefit, lifestyle spending accounts (LSAs), are becoming more popular because they do just that.

“This account allows you as the employee to choose what type of expenses best meet your needs, and employers have the flexibility to determine the benefit level,” says Sara Taylor, senior director of employee spending accounts at WTW. “The flexibility and personalization of this benefit is what’s so attractive.”

Priorities for contributions. When employees have both a 401(k) and an HSA, where should they contribute first? Kevin House, managing director, head of Via Benefits, WTW’s individual health-care marketplace business, in Detroit, generally recommends contributing first to the 401(k) up to the match, then to an HSA, then any extra money into the 401(k).

Beware the Ides of March. The FSA grace period extends through March 15, 2024. Some employers offer a Flexible Spending Account (FSA), enabling employees to contribute to a personal fund to pay for out-of-pocket healthcare or dependent care expenses.

As healthcare costs rise, businesses are looking for new ways to provide medical benefits for their retirees, and one option of interest is replacing group benefits with individual insurance through private marketplaces for retirees who aren’t yet eligible for Medicare, according to a new survey by Willis Towers Watson.

Employers grappling with surging health care costs are embracing new tech-driven care arrangements and alternative payment models to cushion the financial blow to their workers.

Employers want alternative ways to provide medical benefits to their retirees over the next three years, with some looking to replace their traditional group plans for Pre-Medicare and Medicare-eligible retirees with individual insurance coverage through private marketplaces, according to a survey by Willis Towers Watson.

Almost 40% of employers made changes to their retiree healthcare benefits in the last three years, while another 63% plan to in the next three years, the Willis Towers Watson survey found. Some are looking to replace their traditional group plan offerings with individual insurance through a private marketplace.

Increasing health care costs are driving U.S. employers to search for alternative methods to provide health care benefits to retirees, new research shows. The WTW Retirement Medical survey found 50% of employers are concerned about rising costs and are targeting private insurance marketplaces to substitute for group plans.

The cost of traditional retiree healthcare coverage is about $1,000 monthly for those not yet eligible for Medicare, according to Trevis Parson, chief actuary at WTW. Before taking budget axes to retiree medical benefits, employers should consider alternative offerings and the potential impact of such benefit cuts on workforce planning initiatives.