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Twice-Weekly Briefing
Friday, September 4, 2026
Issue 260904-60
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The MOC Brief
Health policy, priced and translated for self-funded plan sponsors
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In This Edition
Five developments, and what each one costs you. Three of them have a date in September.
| 1. | The 2027 cost projection your CFO will ask about, and the 11 percent it would be without plan changes | | 2. | A new email delivery safe harbor for health plan notices, and a short comment window | | 3. | Hospitals told state regulators that collecting from insurers cost them $43 billion in 2025 | | 4. | A network contract that runs out September 30, and the question it asks about yours | | 5. | A new 90 percent safe harbor for dependent care testing, and a comment window closing this month |
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| 1 · Cost Trend · August 31, 2026 |
| Employers Expect Health Benefit Cost per Employee to Rise 8.2 Percent in 2027, the Steepest Since 2003 |
| Mercer published preliminary results from its National Survey of Employer-Sponsored Health Plans on August 31, putting the expected 2027 increase in total health benefit cost per employee at 8.2 percent even after the cost-reduction measures employers already plan. Employers said their current plans would rise 11 percent if they took no action at all. The comparable 2026 projection was 6.7 percent, and Mercer calls this the highest increase since 2003. The preliminary cut reflects more than 1,800 employers responding between the survey's June 10 launch and an August 10 cutoff, and Mercer says final results will draw on more than 2,000. Mercer's actuaries attribute a full percentage point of the overall 2027 cost growth to rising GLP-1 utilization. Fifty-nine percent of employers plan cost-cutting changes for 2027. |
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MOC Perspective
The gap between those two projections is 2.8 points somebody has to absorb, and among employers with 500 or more employees, about two thirds expect to move part of it to the premium share workers pay. That decision gets made in the next six weeks, before open enrollment materials print. Mercer publishes no dollar figure for 2027 cost per employee, so the percentage is all the survey gives you, and your own per-employee number is the one your board will ask about. If you are self-funded there is no premium quote to shop here, only your claims run rate and the plan design sitting on top of it.
What to do now
| ▪ | Ask your TPA this week for your own 2026 cost per employee, then apply both projections to it. | | ▪ | Price the employee contribution increase you are considering before open enrollment materials print, since two thirds of large employers expect to raise the employee share. | | ▪ | Separate GLP-1 spend from the rest of your 2027 projection, because Mercer attributes a full percentage point of growth to it. |
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| Source: Mercer |
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| 2 · Plan Notices · July 23, 2026 |
| The Labor Department Wants to Let Your Health Plan Send Notices by Email, and Comments Close September 21 |
| The Labor Department's Employee Benefits Security Administration proposed a new safe harbor on July 23 for group health plan administrators to furnish ERISA documents electronically, by email or through a plan website. It would be codified at 29 CFR 2520.104b-32, carries RIN 1210-AC35, and sits in docket EBSA-2026-0331. Health plans can already deliver electronically under a 2002 safe harbor at 29 CFR 2520.104b-1(c), but that one generally requires work-related computer access or affirmative consent, and the lighter notice-and-access safe harbor retirement plans got in 2020 never reached health plans. This proposal would add one and leave both existing safe harbors in place. It is voluntary and conditional: a plan would send an initial paper notification before electronic delivery starts, furnish a free paper copy on request, allow a global opt-out to paper only, keep each document posted for at least one year, send a Notice of Internet Availability headed Disclosure About Your Health Plan, and either cure a failed electronic address or treat that person as having elected paper. Comments must be received by September 21, 2026, and 145 had been filed as of September 3. |
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MOC Perspective
Every summary plan description, summary of benefits and coverage, and required notice your plan mails today is a printing and postage line you can price. This proposal would move most of that to email under a rule written for health plans rather than borrowed from the retirement side. Read the conditions before you count the savings, because the failed-address rule turns your census data quality into a compliance question. Nothing is final, and 145 comments is a small enough docket that one plan sponsor describing a real workforce still changes what the final rule looks like.
What to do now
| ▪ | File a comment in docket EBSA-2026-0331 within the next 17 days if your plan mails notices to a workforce without company email. | | ▪ | Count what your plan spent in 2025 printing and mailing the summary plan description, then ask counsel whether the safe harbor reaches the summary of benefits and coverage. | | ▪ | Run a count within 30 days of covered members with no working email address on file, since every one of them stays on paper under this safe harbor. |
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| Source: U.S. Department of Labor, Employee Benefits Security Administration |
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| 3 · Claims Friction · August 31, 2026 |
| Hospitals Tell State Regulators That Collecting What Insurers Owe Cost Them $43 Billion in 2025 |
| The American Hospital Association filed comments on August 31 with the National Association of Insurance Commissioners' Health Care Affordability and Mitigation Working Group. The letter says hospitals spent an estimated $43 billion in 2025 attempting to collect payments insurers owed, including nearly $18 billion spent overturning claims denials. Both figures are footnoted to the association's own Costs of Caring report from March 2026, so they are the hospital industry's estimates and not a regulator's finding. AHA asks the working group to apply a comprehensive total affordability framework with a common definition, to give a balanced assessment of each policy option's benefits, limitations and tradeoffs, and to specifically account for the role of health plan practices in determining affordability and access. It names prior authorization, claims denials, repeated documentation requests, and changing billing and coverage requirements as the practices it has in mind. The letter states no comment deadline and creates no rule. |
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MOC Perspective
The NAIC has no authority over a self-funded ERISA plan, so nothing this working group writes will bind you. The link to your plan runs through price. The money hospitals say they spend overturning denials is a cost of doing business that gets priced back into the rates your plan negotiates, and the other half of that same fight is your own denial and appeal volume. You have probably never been shown that number for your plan, and a high overturn rate means your plan paid to process the claim, paid again to fight it, and paid it anyway.
What to do now
| ▪ | Ask your TPA for your plan's 2025 denial rate and the share of those denials overturned on appeal. | | ▪ | Request the 10 procedure codes that generate the most prior authorization denials on your plan. | | ▪ | Compare your actual appeal turnaround times against the deadlines your plan document promises, this quarter. |
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| Source: American Hospital Association |
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| 4 · Network Access · August 28, 2026 |
| USA Health Says Its UnitedHealthcare Commercial Contracts Will Expire September 30 Without a Deal |
| USA Health, the University of South Alabama's health system, published notice on August 28 that its commercial contracts with UnitedHealthcare will expire if the two sides do not reach agreement by September 30, 2026. On October 1 commercial UnitedHealthcare members would have no in-network coverage at any USA Health hospital, and USA Health Providence Hospital has already been out of network since November 15, 2025. Medicare Advantage, Veterans Community Care and USA Health employed physicians stay in network. The system says its reimbursement rate has not changed since 2019 while labor and supply costs rose approximately 35 percent, and asserts that UnitedHealthcare denies 325 percent more claims at University Hospital and Children's and Women's Hospital than its competitors do. It also cites approximately $223.8 billion in UnitedHealth Group revenue for the first six months of 2026. Every one of those figures is USA Health's own, published during a rate negotiation, and the notice carries no response from UnitedHealthcare and nothing about self-funded or administrative services only arrangements. |
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MOC Perspective
If your plan rents the UnitedHealthcare network and your members use those hospitals, October 1 is your out-of-network exposure and not the carrier's, because a self-funded plan pays the claim. Your network is a contract somebody else renegotiates on a calendar you do not control, and disruption notices reach members before they reach you. Ask your carrier for the expiration list.
What to do now
| ▪ | Ask your carrier or TPA this month for every hospital contract in your top five member markets that expires before July 2027. | | ▪ | Confirm in writing before October 1 how many days your plan document holds in-network cost sharing during a transition of care. | | ▪ | Pull your 2025 claims for any facility on that expiration list and total what 12 months out of network would cost. |
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| Source: USA Health |
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| 5 · Dependent Care · August 11, 2026 |
| The IRS Proposed New Testing Rules for Dependent Care Assistance Programs and Comments Close September 25 |
| The Treasury Department and the IRS published proposed regulations on August 11 covering the nondiscrimination rules for dependent care assistance programs and employer contributions to the new Trump accounts, at 91 FR 51611 under RIN 1545-BS19 and REG-101355-26. On the dependent care side the proposal creates a new eligibility safe harbor at 90 percent. That threshold slides down three quarters of a percentage point for each whole percentage point that non-highly compensated employee concentration exceeds 60 percent. The proposal leaves in place two limits Congress already wrote into section 129, the 25 percent owner concentration limit and the 55 percent average benefits floor, and proposes a framework for applying them. The exclusion limit is $7,500 a year for tax years beginning after December 31, 2025, or $3,750 for married filing separately, and the employer contribution program under section 128 carries a $2,500 annual limit for 2026 and 2027, adjusted after that. The rules would apply to plan years beginning on or after the date final regulations publish, and taxpayers may rely on them before that. Comments and requests to speak at the October 15 hearing are due September 25, 2026, and 25 comments had been filed as of September 3. |
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MOC Perspective
If your dependent care plan has ever come close to failing the 55 percent average benefits floor, that floor is not moving, but this is the first time Treasury has written out how to run the test, and it arrives with permission to rely on it now. The section 128 piece is a new line employees will ask about, up to $2,500 a year into a Trump account for an employee or an employee's dependent, and only a dependent's account can be funded by salary reduction through your cafeteria plan. Neither half is final, which is why the comment date matters more than the rule text does today. A sponsor explaining what a 90 percent eligibility safe harbor does to a workforce with real turnover is worth more now than an objection after the rule lands.
What to do now
| ▪ | Run your dependent care plan against the proposed 90 percent eligibility safe harbor before comments close September 25. | | ▪ | Ask your recordkeeper whether your 2026 plan would pass the 55 percent average benefits floor as this proposal defines it. | | ▪ | Decide before open enrollment whether you will offer a section 128 employer contribution, and at what amount up to $2,500. |
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| Source: U.S. Internal Revenue Service, via the Federal Register |
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The Bottom Line
Three of these five carry a September date, and the earliest is 17 days out. The other two are numbers you cannot act on until you have your own version of them, your cost per employee and your denial and overturn rate, and both sit with your TPA until somebody asks. The pattern repeats. The figures that decide your 2027 budget are already written down, just not in a report anyone sends you. Mercer's two projections sit 2.8 points apart, and that gap is the part plan design still decides.
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Jude Odu
Founder and Principal, Model Optimal Care
Author of Model Optimal Care: End U.S. Healthcare Waste, One Health Plan at a Time
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