Why the ACA Employer Mandate Matters in 2026
Applicable Large Employers (ALEs) with 50 or more full-time equivalent employees must continue to offer affordable, minimum essential coverage in 2026. The IRS increased penalty thresholds again, so even a few months of non-compliance can add up quickly. Employers need documented processes to track eligibility, monitor waiting periods, and ensure contributions meet the affordability safe harbors.
Key Compliance Tasks
- Eligibility tracking: Update payroll and HR systems to identify employees averaging 30+ hours per week during the measurement period.
- Plan affordability: Review 2026 premium contributions against the federal poverty line, rate of pay, or W-2 safe harbors.
- Reporting deadlines: File Forms 1094-C/1095-C on time and deliver employee copies by the IRS due dates.
Penalty Avoidance Checklist
- Audit plan documents and summary plan descriptions so coverage terms match what employees receive.
- Document offers of coverage and waivers for every eligible employee.
- Coordinate with brokers and administrators to reconcile enrollment, payroll deductions, and ACA reporting data each month.
By treating ACA compliance as an ongoing operational process, employers avoid last-minute scrambles and dramatically reduce the risk of ESRP penalties. For help with benefits design and Section 125 plans that work with ACA coverage, see our Section 125 guide or contact us.