Your 2025 benefits compliance checklist: What you need to know

Staying compliant with benefits regulations is essential for avoiding penalties, safeguarding your business, and maintaining employee trust. With new deadlines and changing benefits compliance requirements each year, it’s vital to stay informed and organized.

This 2025 Benefits Compliance Checklist outlines key topics, dates, and additional areas to keep an eye on, ensuring your company meets regulatory obligations throughout the year.

ACA reporting deadlines

The Affordable Care Act (ACA) mandates that employers file reports annually with the IRS and distribute 1095-C forms to employees. Missing these deadlines can lead to significant financial penalties.

Key dates

• February 28, 2025: Paper filing deadline for 1095-C forms.
• March 3, 2025: Provide 1095-C forms to employees.
• March 31, 2025: Electronic filing deadline for 1095-C forms.

Flexible spending accounts (FSA)

Flexible spending accounts (FSAs) offer a valuable tax-advantaged benefit, but the IRS’ use-or-lose rule can result in forfeited funds if employees don’t use their balances by the deadline. Employers must communicate these deadlines clearly to employees.

Key dates

• March 15, 2026: FSA grace period ends for the 2025 plan year, allowing additional time for eligible expenses.
• December 31, 2025: FSA funds for the 2025 plan year must be spent.

Dependent verification audits

Ensuring that only eligible dependents are covered under your benefits plan reduces unnecessary costs and compliance risks. Dependent eligibility audits are essential for maintaining adherence to insurance carrier requirements and minimizing potential litigation.

Key dates

• Q1–Q2 (by June 30, 2025): Complete your dependent eligibility audit to verify all dependents enrolled in your benefits plan.

Non-discrimination testing (NDT)

Non-discrimination testing ensures that benefit plans don’t favor highly compensated employees over others. The IRS requires this testing for Section 125 plans, HRAs, FSAs, and self-insured medical plans.

Key dates

• Q1–Q2 (by June 30, 2025): Conduct mid-year testing to identify potential issues early.
• December 31, 2025: Complete end-of-year testing for compliance.

Qualified small employer health reimbursement arrangement (QSEHRA)

QSEHRAs allow small employers to reimburse employees for qualified health expenses on a tax-advantaged basis. Proper notification to employees is a critical compliance step.

Key dates

• October 3, 2025: Distribute QSEHRA notices to employees 90 days before the start of the 2026 plan year.

COBRA notifications

COBRA provides employees and their families the option to continue health insurance coverage during qualifying events. Employers are responsible for issuing timely notices to comply with the law.

Key deadlines

• Within 90 days of participant eligibility: Provide a General Rights Notice to eligible employees.
• Within 14 days of a qualifying event: Issue a Specific Rights Notice outlining COBRA options.
• Within 60 days of notice receipt: Ensure participants enroll in COBRA if desired.

Additional compliance topics for 2025

Mental Health Parity and Addiction Equity Act (MHPAEA)

Employers offering group health plans must ensure compliance with the MHPAEA, which requires parity between mental health/substance use disorder benefits and medical/surgical benefits.

• Action item: Conduct a parity compliance review for your benefits plan to avoid penalties.

State-level paid leave programs

Many states are introducing or updating paid family and medical leave programs. Employers must comply with state-specific regulations and update policies accordingly.

• Action item: Stay informed about state laws and ensure your payroll systems align with contribution requirements.

HIPAA privacy and security

Protecting employees’ health information is critical. Regularly review and update your HIPAA policies and procedures to address new threats and vulnerabilities.

• Action item: Conduct annual HIPAA training and compliance audits.

Retirement plan compliance (SECURE 2.0 Act updates)

The SECURE 2.0 Act introduces new retirement plan requirements, including automatic enrollment for some plans and changes to required minimum distributions.

• Action item: Consult with your plan administrator to ensure compliance with 2025 deadlines.

Stay ahead of compliance in 2025

Staying compliant isn’t just about meeting deadlines—it’s about protecting your company and employees while creating trust. With this checklist, you’ll be better prepared to tackle the challenges of 2025.

Check out our 2025 compliance checklist and calendar handout here.

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers. 

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