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Written by: Nolan Leslie, Benefits Sales Executive In today’s competitive job market, offering a paycheck alone isn’t enough. Employees are seeking more meaningful support from their employers and benefits that reflect their real-life needs and values. Non-medical benefits – like life, disability, dental, vision, accident, critical illness, and hospital indemnity - are emerging as a powerful tool to attract and retain top talent, provide critical support during life’s unexpected moments, and build a more holistic, future-ready benefits package. Why Offer Non-Medical Benefits? Attract and Retain Talent:  With five generations in the workforce, employees are asking for more benefits while employers are constantly looking for ways to stand out without going over budget in a tough job market. Support During Life’s Critical Moments:  Often these benefits help employees when they need it most. 74% of people are living paycheck to paycheck. Providing options to assist employees with unexpected expenses is crucial to their well-being. Create a Holistic Benefits Package : Providing your employees with benefits that fall outside the traditional buckets of welfare/medical and compensation. Studies show that nearly 80% of employers are considering adding Supplemental Health Benefits. These benefits can help you cover more of your employees’ wants and needs. What’s Often Overlooked? Non-medical benefits are often outdated and misaligned with employee needs due to infrequent review. Specifically, life and disability coverage, which can leave key employees underinsured. Non-medical benefits are typically under-communicated, which leads to low utilization and undervaluing by employees. Voluntary benefits often include overlooked contract stipulations that limit payouts, many of which can be negotiated or removed with proper negotiation tactics Non-medical lines that are non-compliant due to inconsistent documentation, lack of regular audits, and oversight gaps when managed across multiple carriers. How to Maximize Your Non-Medical Benefits Strategically Bundle Coverage:  Consolidating multiple coverages with a single carrier can lead to better pricing, improved contract terms, less compliance risk, and even potential premium refunds. Communicate Benefits Year-Round:  Engaging employees outside of open enrollment helps them better understand their options. With consistent education, 63% of employees enrolled in at least one voluntary benefit. Listen to Your Employees:  Use tools like Engage360 or BenefitWave to survey employees and ensure your benefits align with their needs. These insights reveal what employees value and what they do not By reevaluating your offerings, staying ahead of market trends, and listening to your employees, you can create a benefits package that not only supports your people but also strengthens your organization. The right mix of benefits can make all the difference in building a resilient, engaged, and loyal workforce. This process is complex and time-consuming, but you do not have to do it alone. If you’re interested in hearing more. Contact us. Nolan Leslie NLeslie @cottinghambutler.com 563.348.1027

Written by Kara Vines, Sr. Safety Consutlant In a report released by the American Transportation Research Institute (ATRI), the average operational costs of trucking in 2024 was $2.260 per mile.  Excluding fuel, companies spent $1.779 per mile – an increase of 6.2 cents per mile over 2023.  Improving the fuel efficiency of a company’s fleet of vehicles can have many financial and environmental benefits, especially with fuel prices on the rise. Fuel can be one of the largest and most difficult expenses to predict and control, and makes up 30-40% of total fleet expenses annually. Therefore, it’s important for vehicle fleet managers to conserve fuel, maximize efficiency and reduce vehicle emissions by implementing fuel-efficient policies, technology and maintenance strategies.  Best Practices Managing a fleet’s fuel usage - even for just a couple of vehicles - can feel overwhelming. The following are ways to reduce fleet fuel costs and make operations more efficient: Monitor driving patterns. A U.S. Department of Transportation report found that there can be as much as a 35% difference in fuel consumption between a good and poor driver. Monitoring speeding, braking and acceleration patterns can indicate whether drivers are using good practices on the road or operating inefficiently.  Smooth acceleration, steady speeds, and gentle braking can all improve fuel efficiency.  You can utilize your telematics system to help monitor and coach driving behavior for your fleet by evaluating vehicle performance data.  Avoiding harsh acceleration can reduce your fuel usage by up to 30%. Cut engine idling. Idling can burn a quarter to a half gallon of fuel per hour. To reduce fuel and oil waste: Improve route efficiency. Route efficiency can be improved with GPS tracking technology to ensure operations are streamlined and drivers don’t spend their day and fuel driving back and forth.  Remove unnecessary weight from vehicles. Every extra 100 pounds in a vehicle can increase gas costs by up to $0.03 cents per gallon, which can quickly add up over the course of hundreds of thousands of gallons across multiple vehicles. Train your drivers to only travel with necessary packages or equipment. Schedule maintenance. Preventive and regular maintenance can reduce fuel costs, extend the entire lifespan of fleet vehicles and ensure the safety of drivers and the community.  A vehicle that is well maintained will operate more smoothly and consume less fuel. Check the tire pressure. Checking the tire pressure should be a mandatory part of the pre-trip safety check since it not only improves the cost per mile but also helps the vehicle respond properly in unsafe situations. Dispatch the closest vehicle. Business margins and fuel efficiency can be improved by dispatching the closest vehicle to anew delivery or appointment. Fleet-tracking programs can help automate dispatching and routing. Leverage a fleet telematics solution. A fleet telematics solution can help managers gain data and insight into fleet status in terms of individual vehicle performance and overall operations, allowing them to make changes that will help fuel efficiency. Provide incentives. Fleet managers can encourage efficient driving by offering drivers incentives, such as recognition or special privileges. Implement driver training. Providing drivers with training regarding fuel-efficient habits can increase their awareness of fuel efficiency on the road. It can help them be mindful of things like keeping gears low when accelerating, changing gears early, driving at slower speeds and learning to read the road more effectively. By implementing policies and practices that monitor and reward fuel-efficient behavior, fleet operations can reduce fuel costs.

When most business owners think about insurance, they picture premiums as a necessary expense that simply vanishes into the void each year. But what if there was a way to maintain comprehensive coverage while potentially getting money back when things go well? Enter captive insurance – a strategy that's quietly revolutionizing how smart companies approach risk management and turning insurance from a pure cost center into a potential profit center. Taking Control of Your Insurance Destiny Traditional insurance operates on a simple premise: you pay premiums, and those dollars disappear regardless of your claims experience. Market forces, other companies' losses, and factors completely outside your control drive your costs higher each year. Captive insurance flips this model on its head. Instead of sending your premiums to a faceless corporation, you join a group of like-minded companies that essentially self-insure. When the group performs well and claims are favorable, you don't just avoid rate increases – you actually receive dividends back. The Numbers Don't Lie Cottingham & Butler captive members have received over $330 million in dividend returns during profitable years. That's money that would have otherwise disappeared into traditional insurance company offers, now flowing back to strengthen participants' bottom lines. These returns come while maintaining the comprehensive coverage your business needs, creating a win-win scenario that traditional insurance simply can't match. Choosing Your Captive Partner: Due Diligence Essentials Not all captive arrangements are created equal. Before diving in, business leaders should evaluate potential partners across several key dimensions: Track Record Matters : Look for proven experience in captive management. Success in this space requires specialized expertise that develops over years, not months. Retention Tells the Story : High renewal rates among existing members speak volumes about satisfaction and performance. If companies are staying put, there's usually a good reason. References Are Non-Negotiable : Any reputable captive will have multiple satisfied members willing to share their experiences. If they won't provide references, keep looking. One-Stop Service : The best arrangements offer comprehensive support, handling everything from claims management to safety consulting under one roof. Know Your Risk Profile : Understand how risk is shared within the group and what historical performance looks like. Partnership Transparency : You should know exactly who you're partnering with and what their track record entails. Ready to Explore? If captive insurance sounds like it might be a fit for your company, the next steps are straightforward: submit your data for evaluation, schedule an on-site loss control assessment with safety experts, and receive a formal proposal with firm pricing. In a business environment where every dollar counts, captive insurance offers something increasingly rare: the chance to maintain essential coverage while potentially improving your financial position. For companies tired of watching their insurance premiums disappear without a trace, it might just be the alternative they've been looking for. Interested in learning more? Speak with a Cottingham & Butler representative to discover if captive insurance could work for your business. https://www.cottinghambutler.com/how-can-we-help

Written by: Tiffany Johnsrud, Benefits Sales Executive Struggling to get leadership buy-in for a benefits admin system or EDI feeds? What if your dental or disability carrier could help pay for it?   Think of it like dining out. When you splurge, you're not just paying for a meal — you're investing in an experience.   Employee benefits are one of your biggest expenses. So why settle? Expect a solution that enhances the employee experience, simplifies administration, and delivers real value.   Tech credits can help you get there. What Are Tech Credits? Technology credits are financial incentives offered by insurance carriers to help employers cover the cost of technology that makes the day-to-day tasks of benefits enrollment, management, compliance, and administration easier.   Who Offers & Negotiates Tech Credits? Tech credits are offered by non-medical carriers - especially those providing life, disability, dental, vision, and voluntary benefits. Your broker plays a key role in negotiating these credits on your behalf during renewals or onboarding.   When & Where Do Tech Credits Apply? Your broker can explore tech credit options: During new carrier onboarding At renewal time When bundling multiple lines of coverage Credits may come as lump sums, monthly reimbursements, or fee offsets, depending on the carrier agreement.   Why Should You Care? We often hear from HR and Benefits teams who know exactly what they need - like a better ben admin system or EDI feeds - but hit a wall when it comes to budget approval. Here’s the good news: tech credits can help you get the technology you need at a fraction of the cost. Why It Matters: Reduces bottom line expenses Enables better employee experience Improves operational efficiency Supports digital transformation without increasing premiums   FAQs Q: Do all carriers offer tech credits? No - but many do, especially in group life, disability, and voluntary benefits. Q: Can credits be used for any platform? No, some systems cannot accept credits from specific carriers so work with your broker closely to explore utilization. Q: How much can employers save? Typically it’s a % of premium, savings depend on group size and other factors. $5-$50k! Q: Do credits affect premiums or rates? No - they’re negotiated separately as part of the overall value package.   Ready to Explore Tech Credits? If you're an HR leader, CFO, or CEO wondering how to stretch your benefits budget further - this is your moment. Let’s talk about how to utilize tech credits in this upcoming renewal to fund the tech your team needs to enhance and optimize your employee benefit experience. Tiffany Johnsrud TJohnsrud@cottinghambutler.com 563.451.6540

Written by: Cole Skelton, Sales Executive - Employee Benefits Minnesota Paid Family Leave is coming in 2026 – and represents a significant shift that could ripple through your business. Here Are The Minnesota PFL Basics Eligibility Virtually every worker in Minnesota is covered  – full-time, part-time, seasonal, and temporary employees. Coverage begins day one of employment  – with job protection kicking in after 90 days. To qualify employees must have made $3,781 in the previous year  (5.3% of state avg income). Benefit Up to 20 weeks of job-protected leave  per year (12 for medical/12 for family). Income replacement starts at 90% for lower income earners   and will continue to decrease as income does. The maximum benefit is capped at $1,372 a week. Leave can be taken for an employee’s own health needs as well as those of their family . Premium 0.88% of total wages, split 50/50 between employer and employee  (employers can choose to pay more). Premiums apply to 100% of taxable earnings , not just their base salary. Business Risks 1. Financial Exposure For a company with 100 employees earning Minnesota’s avg salary ≈ $67,000, a state PFL plan will cost about $29,480  assuming the company picks up 50% of the premium. Total expenses will depend on plan type – state or private. If there is not currently an employer funded short-term disability plan, this will be a new line item. With the maximum benefit being $1,372 per week – that’s 23% income replacement for an individual making $300,000 in a year. Additional short-term disability insurance may be required to properly insure high-income earners or those employees outside Minnesota. 2. Operational Gaps Key employees having access to prolonged and intermittent leave will become a reality – whether it’s your CNC machinist, lead project manager, or frontline worker. Having proper backup plans for key employees being out will be critical to ensure operational continuity. Do you have an up-to-date succession plan for key personnel? Do opportunities exist to cross-train employees? Are your time-off policies ready for intermittent leave for things like doctor visits? 3. Public vs. Private Options State Plan: Likely will be the cheapest, but it’s year one – expect growing pains. Private Plan: Potentially smoother administration, and a more intuitive employer/employee experience – at a premium. A private plan does present an opportunity to bundle on other non-medical insurance lines and save. Key Next Steps: Start internal conversations with HR, finance, and operations now. Audit current disability insurance coverages to identify what will overlap with MN PFL and what, if any, gaps are present for high-income earners. Run a cost/benefit analysis between a state or private plan. Map out strategy for intermittent leave, including backup staffing and cross-training. Build a Q3/Q4 implementation roadmap to ensure all systems and procedures are ready for 2026. With 2026 fast approaching, now is the time to get ahead of the curve and prepare your team, policies, and workforce for the changes ahead. Interested in learning more? Contact Us! Cole Skelton CSkelton@cottinghambutler.com 319.936.3463

Written by: Emily Vorpahl, Sales Executive - Employee Benefits In today’s competitive labor market, employers are under more pressure than ever to offer benefits that not only protect employees but also engage them, simplify administration, and deliver measurable value. At Cottingham & Butler, we’ve built a unique Engagement Team that brings together technology, communications, and non-medical expertise to create a seamless experience for employers and employees alike - one that enhances understanding, increases efficiency, and ensures every benefit delivers value. Three Teams, One Seamless Experience While each team brings its own expertise, they operate with one shared mission: to help employers attract and retain employees by protecting their financial well-being through market-leading benefits, communication, and technology. Together, they work in lockstep to guide employers from initial strategy and implementation to long-term execution and ongoing support. Maximize Value: Non-Medical Team By negotiating with carriers and analyzing contract language in depth, our Non-Medical Team helps employers deliver high-value, cost-effective coverage across a range of offerings - including dental, vision, disability, life, accident, critical illness, hospital indemnity, and more. By digging into the details and uncovering gaps in coverage, our team helps employers save 25–30% while enhancing the benefits they provide. Employees also see the impact directly, saving 19–40% annually out of their paychecks. Educate Employees: Communication Team We know communication strategies aren’t one-size-fits-all. That’s why our Communication Team partners with employers to develop tailored approaches based on industry, demographics, location, and workforce size. Fro m open enrollment sites to flyers and posters, every piece of collateral is designed to be clear, engaging, and on-brand. This personalized approach drives measurable results and helps employees make more confident decisions: 91% of employees complete enrollment without HR assistance, enrollments in non-medical coverage increase by 5–10%, and enrollment in one benefit rises from 46% to 60% after targeted education efforts. Drive Efficiencies: Technology Team Our Technology Team helps employers simplify benefits administration by consulting on and implementing systems that reduce errors and improve efficiency. With experience across 30+ platforms - including ADP, Paycom, Employee Navigator, and more - our analysts provide hands-on support with data management, file feeds, and billing processes. On average, this saves clients over 30 hours per year, with some billing tasks reduced from hours to mere minutes. The Power of Alignment What makes our Engagement Team effective is the way these three groups operate as one. Through regular collaboration, shared insights, and a commitment to continuous improvement, we ensure every strategy is aligned from start to finish. It’s not about passing tasks from one team to the next - it’s about working together to deliver a unified experience that feels seamless to clients and their employees. Conclusion Whether it’s navigating complex carrier relationships, optimizing coverage, improving employee engagement, or untangling technology challenges, our Engagement Team solves problems before they become pain points. Interested in learning more? Contact us! Emily Vorpahl EVorpahl@cottinghambutler.com 608.467.0453 ext 2358

Building a truly effective safety culture goes far beyond compliance checklists and policy manuals - it requires a fundamental shift in how leaders approach trust, communication, and organizational learning. In our recent webinar, "Creating an Unstoppable Safety-First Culture," Safety Consultant Scott Christenson demonstrated how the most resilient organizations transform safety from a mandated requirement into a shared cultural strength. Drawing on proven best practices from industry and human psychology, this recorded session reveals that when people feel trusted, valued, and informed, they naturally embrace safety as a core value rather than an external obligation. Here are the four essential strategies that will help you cultivate a workplace where safety becomes second nature: Build genuine relationships with your team by trusting them through both successes and failures, creating a restorative culture that embraces humanity that focuses on learning rather than blame. Establish an open information environment that encourages real, raw dialogue while embracing and addressing bad news transparently when it occurs. Cultivate a deep understanding of core priorities by utilizing learning teams to explore all operational aspects and bridge the gap between "work-as-imagined" and "work-as-done." Develop realistic, fluid action plans by gathering insights from all organizational levels and celebrating milestones to maintain momentum and motivation. Click here for the presentation.

When a claim happens, insurance becomes a vital lifeline for your business. However, navigating complex claims can feel like an overwhelming maze of processes. Our dedicated claims advocacy team fights for your interests, driving quick resolutions that keep your operations running smoothly. Their meticulous attention to detail and unwavering commitment to fairness helps translate your policy coverage to your advantage, maximizing your settlement and safeguarding your financial health. Our approach delivers real results. In 2024 alone, our Claims Advocates team achieved over $9,025,065 in total savings and recoveries for our clients. "We are problem solvers when it comes to claims issues, and we get to have a direct and positive impact on our clients’ claims experiences.  That’s the best part.  Our clients are so appreciative and are very vocal about their appreciation.  It makes all of the effort worthwhile ." - Troy, Assistant VP Client Success Stories Our passionate advocacy for clients' interests creates relationships that extend far beyond individual claims. These success stories showcase how our dedicated service transforms satisfied customers into clients for life. 25% More Coverage: See How View Real Results: $160K Cargo Saved See Real Results: $196K Saved "I am not sure exactly what to say other than 'Thank You' many times. Cottingham & Butler was persistent through all of this. We were able to turn to you, and your team always found another way of looking at things. We are very grateful. It now opens the door for us to go back to [our customer] and collect our money without having to go through the lawsuit route. I am never going to forget this!" Discover more client stories at the link below!

Written by: Catherine Gebhardt, Sales Executive - Employee Benefits Minnesota Paid Family Medical Leave (MN PFML) is a game-changer  for employee benefits and workplace culture. With thoughtful planning and proactive communication, HR teams can turn this mandate into an opportunity to support employee well-being and strengthen organizational trust. Start Date : January 1, 2026, This ambitious initiative, designed to provide up to 20 weeks of paid, job-protected leave for eligible employees. For HR professionals, this marks a significant shift in how leave is managed, tracked, and communicated. Internal management, communication and continuing education are key to stay up to date on the latest changes. Here’s what you need to know to prepare your organization for Minnesota PFML: PFML benefits are designed to replace a higher percentage of income for lower-wage workers, with up to 90% wage replacement for the lowest earners. Wage replacement tapers down as annual wages increase.   Maximum weekly wage for 2026 = $1372   Weekly wage repayments cannot  exceed the state average weekly wage of $1,372. Meaning, no matter your pre-leave earnings, the maximum weekly wage replacement amount cannot exceed the state's average weekly wage. Average weekly wage calculations will be recalculated by the State of Minnesota on an annual basis and applied for the upcoming calendar year. Premiums and Contributions Starting January 1 st , 2026, employers and employees will share the cost of the program: Total premium rate: 0.88% of employee wages Employer minimum contribution: 50% (0.44%) Employers may choose to cover the full amount or a custom percentage as long as the minimum contribution of 50% is met.   Employer FML Contributions, under IRS Revenue Ruling 2025-04, are federally tax deductible as an ordinary and necessary business expense under excise taxes or wages, depending on the accounting classification of the employer. Plan Options for Employers Employers have three options to comply: State Plan  – Ideal for small businesses (2–20 Minnesota employees) with limited HR resources. Private Plan :  Insurance Carrier   Partner – Suitable for small to mid-sized companies (20–500 Minnesota employees) seeking additional administrative support, integrated leave management programs, and additional non-medical benefits. Private Plan : Self-Funded, Vendor Managed, Self-Managed – Available for larger employers (500+ Minnesota employees) with robust HR and legal teams. Larger employers are also choosing private plans through an insurance carrier partner due to the unpredictability, complexity and volume of claims, plan administration assistance, along with the ability to have an outsourced partner for their HR team. ** Each plan option must meet or exceed the benefits offered by the state plan. Private insurance carrier plans are responsible for plan filing, annual reporting, and compliance. Private plans also manage regulatory updates to ensure plan guidelines concur with the state plan. **   Small and mid-sized employers are leaning towards either the State Plan or Private Insurance Plan strategy. This will help to alleviate administration, leave management and legal compliance, with regards to issues which may arise when creating plan documents from scratch. HR’s Role in PFML Administration HR teams will be at the center of PFML implementation. Key responsibilities include: Tracking leave  (continuous, intermittent, or reduced/nonconforming schedule accommodations) including leave taken + remaining available balance Verify employee eligibility , including employee type (fulltime, part time, seasonal)  - Coordinating  with insurance carriers or the state plan Maintaining  employee benefits during leave Communication  of benefits eligibility and/or benefits termination timeline should the employee not return to work. Educating  employees on their rights and responsibilities. Newly hired employees must receive notice of MN PFML within 30 days of hire date Retain  documents including any notes regarding insufficient notice of initial leave request or extension of leave requests  Communicate  leave notice violations or issues to the Commissioner/State of MN PFML department   Whether working through the MN State Plan, a Private Insurance Carrier, or Self-Funding, communication with the MN State Insurance Commissioner and/or the State of MN PFML department will be required. Interested in learning more? Contact Us! Catherine Gebhardt CGebhardt@cottinghambutler.com (608) 467-5021 ext 2351

Written by Josh Surber, Sales Executive - Employee Benefits Healthcare costs are spiraling out of control, and traditional employer health plans are failing the very people they're meant to protect. With 55% of Americans relying on employer-sponsored health insurance ¹, we're facing a crisis that demands immediate attention and innovative solutions. The Problem: When Benefits Become Barriers Recent Kaiser reports project a 7% increase in employer-sponsored health insurance premiums - yet another painful reminder that our current system is unsustainable. But the real shock comes when you look at what employees are paying and what they can afford. ² According to the 25th Employer Health Benefits Survey ² : Here's where it gets worse. The average deductibles employees face is $1,735 for individual coverage and $3,900 for family coverage. Now consider this sobering reality ³ : We've created a system where employees pay thousands for insurance they literally cannot afford to use. The Devastating Consequences When employees do need care - and they must use it - the results are catastrophic: ⁴ ⁵ As an employee benefits broker working across industries, I witness this disconnect daily. Every employer I meet takes pride in their benefits package and genuinely cares about their employees' wellbeing. Yet we've collectively designed a system that's increasingly expensive to obtain and statistically impossible to afford when used. This backward approach demands a fundamental rethink. Strategic Solutions That Actually Work Fortunately, there are proven ways to restructure health benefits that incentivize healthy choices while making coverage truly affordable when needed. Focus on Chronic Condition Management While biometric screenings remain important, managing existing conditions delivers far greater impact. With 60% of American adults living with at least one chronic disease and 40% managing multiple conditions ⁶, targeted support programs show measurable results. The statistics are compelling: 80% of healthcare spend comes from members with chronic conditions ⁷. HealthCheck 360 shows that clients with an incentivized condition management program spend $2,500 less per member per year than clients that do not. Consider implementing: Condition-specific compliance programs Medication assistance programs Educational resources that help employees manage ongoing health rather than just detecting new problems Price Transparency with Shared Savings New programs incentivize employees to shop for planned procedures by sharing the savings when they choose cost-effective providers. Here's how it works: Sarah needs a knee replacement and discovers three options through her employer's price transparency program with her $3,000 deductible and 20% coinsurance. Result:  Sarah gets the same quality care while coming out $6,000 ahead. The plan saves money, and the employee wins big. Copay-Only Health Plans These streamlined plans eliminate the complexity of deductibles and coinsurance, replacing them with straightforward copayments. Coverage extends beyond basic preventive care to include generic medications, primary care visits, and essential services. Most importantly, variable copay tiers reward cost-effective healthcare decisions with lower out-of-pocket costs. This approach reduces financial complexity while aligning employee incentives with smart healthcare spending. A Call to Action We can no longer treat health insurance as just another expense to negotiate down by a few percentage points each year. It's time to view employee health benefits as a strategic program that requires careful consideration of structure, function, and cost-sharing. The current system is broken. Employees are paying more for coverage they can't afford to use, leading to financial ruin when they need care most. As employers, we have both the opportunity and the responsibility to do better. I challenge every employer reading this: if you won't restructure your health benefits for your business's bottom line, do it for your employees who simply can't afford the status quo anymore. The solutions exist. The question is whether we'll have the courage to implement them. Interested in learning more? Contact Us! Josh Surber JSurber@cottinghambutler.com 847.447.7010 ext 2104 References: Health Insurance Statistics & Facts 2025 - Forbes Advisor https://www.forbes.com/advisor/health-insurance/health-insurance-statistics-and-facts/ 25th Employer Health Benefits Survey - KFF https://www.kff.org/report-section/ehbs-2023-summary-of-findings/ Most Americans can't afford a $1,000 emergency expense - CBS News https://www.cbsnews.com/news/saving-money-emergency-expenses-2025/ The burden of medical debt in the United States - Peterson-KFF Health System Tracker https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/#Share%20and%20estimated%20number%20of%20adults%20with%20medical%20debt,%20by%20the%20amount%20of%20debt%20they%20owe,%202021 Medical Bankruptcies by Country 2025 - World Population Review https://worldpopulationreview.com/country-rankings/medical-bankruptcies-by-country Chronic Disease Prevalence in the US - CDC.gov https://www.cdc.gov/pcd/issues/2024/23_0267.htm

On July 4, 2025, President Donald Trump signed a major tax and spending bill, commonly referred to as th e One Big Beautiful Bill Act  (OBBB Act), into law. The OBBB Act includes changes for employers, including provisions that: Increase the maximum annual limit for dependent care flexible spending accounts (FSAs); Permanently extend the telehealth exception for high deductible health plans (HDHPs); Allow employee access to Direct Primary Care arrangements without causing a loss of HSA eligibility; Permanently allows employers to take a credit for their paid family and medical leave (PFML) expenditures; Allow employers to help pay employees’ student loans beyond 2025 and make cost-of-living adjustments to the tax exclusion for educational assistance programs; Allow employers to contribute up to $2,500 per year to a new type of tax-advantaged account for children, called Trump Accounts; and Allow certain workers an above-the-line deduction for “qualified overtime compensation.” The following provides a broad overview of employment-related provisions from the OBBB Act and corresponding action items for employers to review. These items are not meant to be comprehensive and cannot account for the entirety of the legislation.   One Big Beautiful Bill Act Increases Dependent Care FSA Limit Currently, the annual contribution limit for dependent care FSAs is $5,000 for single individuals and married couples filing jointly and $2,500 for married individuals filing separately. This limit has been in place since 1986 (except for a temporary increase during the COVID-19 pandemic). Effective Jan. 1, 2026, the OBBB Act increases the Dependent Care FSA limit to $7,500 for single individuals and married couples filing jointly and $3,750 for married individuals filing separately. This increase is optional for plans to adopt. Dependent Care FSA Limit Increase Action Items ✓ Assess how the increased limit may impact the plan’s annual nondiscrimination testing results, particularly the 55% average benefits test. ✓ Review the written plan document to determine if updates are necessary due to the increased limit. ✓ Communicate the new limit to employees as part of the open enrollment process. One Big Beautiful Bill Act Permanently Extended Pre-deductible Telehealth Coverage for HDHPs/HSAs The OBBB Act includes measures to expand the use of health savings accounts (HSAs). One of the new measures permanently extends the ability of HDHPs to provide benefits for telehealth and other remote care services before plan deductibles have been met without jeopardizing HSA eligibility. To be eligible for HSA contributions, individuals cannot be covered by a health plan that provides benefits, except preventive care benefits, before the minimum HDHP deductible is satisfied for the year. Historically, individuals who were covered by telehealth programs that provided free or reduced-cost medical benefits were not eligible for HSA contributions. However, in response to the COVID-19 pandemic, the U.S. Congress enacted legislation that temporarily allowed HDHPs to provide benefits for telehealth or other remote care services before plan deductibles were met. This exception for first-dollar telehealth services expired at the end of the 2024 plan year (i.e., Dec. 31, 2024, for calendar-year HDHPs). However, the   OBBB Act permanently extends this relief, retroactively effective for plan years beginning on or after Jan. 1, 2025. Due to the permanent extension, HDHPs may waive the deductible for any telehealth or other remote care services for plan years beginning in 2025 and beyond without causing participants to lose HSA eligibility. This provision is optional; HDHPs may still apply any telehealth services, other than preventive care, toward the deductible. First Dollar Telehealth Coverage Action Items ✓ Employers with HDHPs should review their health plan’s coverage of telehealth services to determine if changes should be made. ✓ Determine whether to make changes effective in 2025 or beginning in 2026. ✓ For changes made in 2025, communicate any changes to telehealth coverage to plan participants through updated plan materials or a Summary of Material Modifications. One Big Beautiful Bill Act Allows for Direct Primary Care Participation without a Loss of HSA Eligibility Direct Primary Care (DPC) arrangements are subscription-based health care models for delivering primary care to patients. Each patient pays a membership fee and may utilize various primary care services from a DPC provider.  Historically, it has been unclear how access to DPC services impacted an individual’s eligibility to contribute to an HSA.  In fact, most assumed that accessing DPC before meeting an insurance plan deductible rendered an individual ineligible to make HSA contributions.  Beginning in 2026, participation in DPC arrangements that meet the following criteria will not cause a loss of HSA eligibility: The DPC must be subject solely to a fixed monthly fee of no more than $150 for an individual and $300 for more than one individual (these amounts may increase annually for inflation); and The DPC must involve medical care provided by a primary care practitioner.  Procedures that require the use of general anesthesia, prescription drugs (other than vaccines) and lab services not typically provided in a primary care setting do not qualify as primary care. In addition, fees paid for such DPC arrangements will be treated as eligible medical expenses for purposes of HSA reimbursement. DPC Participation Action Items ✓ Employers who have encouraged DPC participation in the past will now be able to do so with confidence if also offering a High Deductible Health Plan with HSAs.   ✓ Employers should work with their benefits advisors to determine if the DPC arrangements meet the criteria and communicate accordingly to employees. One Big Beautiful Bill Act Expands and Makes Permanent Employer Tax Credit for PFML The OBBB Act affected a tax code provision that allows employers to take a credit for their paid family medical leave (PFML) expenditures. In brief, the OBBB Act makes the tax credit permanent and broadens its coverage to PFML insurance premiums and leave taken by newer employees than previously allowed, among other changes. The amendments apply to taxable years beginning after Dec. 31, 2025. The tax credit is only available to employers voluntarily providing at least two weeks of PFML at a rate that is at least 50% of the employee’s normal pay rate. The credit does not apply to PFML required by law, nor does it apply to vacation leave, personal leave or sick leave. PFML Tax Credit Action Items Employers that voluntarily provide PFML should review their leave policies and speak with their tax advisor to determine whether they qualify for this potentially valuable tax credit. One Big Beautiful Bill Act Makes Student Loan Repayment Benefit Permanent Since 2020, employers that offer educational assistance programs have been able to use them to help pay for their employees’ student loans. While educational assistance programs have been available for many years to pay expenses such as books, equipment, supplies, fees and tuition, the option to use them to pay for student loans was set to expire on Dec. 31, 2025. However, the OBBB Act permanently extends this student loan provision. In most cases, educational benefits are excluded from federal income tax withholding, Social Security tax, Medicare tax and federal employment (or FUTA) tax. Under current law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year, and assistance provided above this level is typically taxable as wages. Effective for taxable years beginning after 2026, the OBBB Act provides for annual inflation adjustments to the $5,250 limit. Student Loan Repayment Benefit Action Items ✓ Employers may continue to use educational assistance programs to pay principal and interest on an employee’s qualified education loans.  Payments made directly to the lender, as well as those made to the employee, may qualify.  ✓ Communicate the new limit to employees as part of the open enrollment process. One Big Beautiful Bill Act Creates New Tax-favored Accounts for Children The OBBB Act creates a new type of federal tax-favored account for children, called Trump Accounts, effective for tax years beginning in 2026.   Employers that establish a Trump Account Contribution Program can contribute up to $2,500 per year on a tax-free basis to the Trump Accounts of employees’ dependents (or teenage employees).  This program must be established pursuant to a written plan document and must meet certain tax rules that apply to dependent care assistance programs. Key features of Trump Accounts include the following: Children born in 2025-28 may be eligible to receive a special $1,000 contribution from the federal government; Annual contributions are generally limited to $5,000 and may only be made beginning 12 months after the OBBB Act’s enactment (i.e., July 4, 2026) and only until the child reaches age 18; The accounts are treated similarly to traditional individual retirement accounts for tax purposes, although taxpayers’ contributions are not tax deductible; and Withdrawals are only permitted after the account beneficiary reaches age 18. Trump Account Action Items ✓ The IRS is expected to issue guidance on Trump Accounts in the future, which should address eligibility criteria, plan document requirements, implementation timelines and administration details.    ✓ Employers should consider whether implementing a Trump Account will be beneficial and cost-effective.  Those interested should watch for further guidance from the IRS. One Big Beautiful Bill Act Temporarily Eliminates Taxes on Overtime Compensation The OBBB Act will allow certain workers an above-the-line deduction for “qualified overtime compensation” for taxable years beginning after Dec. 31, 2024, and ending for taxable years beginning after Dec. 31, 2028.  Section 70202 of the OBBB Act establishes a new above-the-line tax deduction for qualified overtime compensation.   The OBBB Act defines “qualified overtime compensation” as overtime compensation paid to an individual required under Section 7 of the Fair Labor Standards Act that is in excess of the regular rate at which the individual is paid. The maximum deduction for overtime income is capped at $12,500 per year ($25,000 per year if married filing jointly). The deduction decreases for those earning over $150,000 per year. Employers must include the total amount of qualified overtime compensation as a separate line item on employees’ Form W-2. Individuals must include their Social Security number (and, if married and filing jointly, their spouse’s Social Security number) on their tax return to receive the deduction. Overtime Compensation Action Items ✓ Employers should work with their payroll provider and tax advisor to adjust their payroll systems to accurately tract and reporting overtime compensation on employees’ Forms W-2. Many of these new provisions provide additional opportunities for employers to engage their employees and provide more meaningful employee benefits. We encourage you to contact your Cottingham & Butler team member today to learn more about how these changes may affect your benefit offerings.

The Situation Midwest-based real estate company faced a massive renewal of 37% from its current medical insurance carrier. With limited alternatives initially presented to them by their benefits broker, they decided to explore the market and see their options to avoid a $200,000 increase in costs. Key Wins Why They Needed Change Substantial Premium Increase: An unanticipated 37% increase in medical premiums threatened financial stability for the organization. Limited Alternatives: Plan design alternatives and solely going to the incumbent to negotiate weren’t going to cut it for this renewal. Multiple options and a more thorough marketing process were needed. Minimize Employee Impact: The company didn’t want to pass on a significant cost burden to employees and hurt their retention efforts. Options that would keep employee benefits competitive while reducing company costs were necessary Overall, by engaging with Cottingham & Butler, the group was able to craft a more affordable, simplified, and competitive suite of benefits for all parties involved.