--- title: ACA Affordability & Employer Mandate Updates for 2026 Plan Year description: Stay updated on ACA compliance for 2026. Learn about new affordability thresholds, penalties, and key employer mandates to avoid costly fines. image: https://blog.ahola.com/hubfs/aca.png --- Start typing and press Enter to search * * # ACA Affordability & Employer Mandate Updates for 2026 Plan Year [Home](https://www.ahola.com/) » [News & Events](https://blog.ahola.com/aca-affordability-employer-mandate-updates-for-2026-plan-year) » ACA Affordability & Employer Mandate Updates for 2026 Plan Year [2026-01-23%2016:47:04](2026-01-23%2016:47:04) ![](https://blog.ahola.com/hubfs/aca.png) ## ACA Affordability & Employer Mandate Updates for 2026 Plan Year By [ Ahola Corporation ](https://blog.ahola.com/author/ahola-corporation)  Posted [ January 23, 2026](2026-01-23%2016:47:04)  In  [Payroll](https://blog.ahola.com/tag/payroll), [Benefits](https://blog.ahola.com/tag/benefits), [Human Resources](https://blog.ahola.com/tag/human-resources), [Affordable Care Act](https://blog.ahola.com/tag/affordable-care-act), [Employees](https://blog.ahola.com/tag/employees), [Hiring](https://blog.ahola.com/tag/hiring) - - - - - Keeping up with ACA requirements can feel like a full-time job on its own. Stay informed so your business remains compliant and avoids unexpected penalties. On September 6, 2024, the IRS released [Revenue Procedure 2024-35](https://www.irs.gov/pub/irs-drop/rp-24-35.pdf), announcing that the [ACA affordability threshold for the 2025 plan year](https://blog.ahola.com/aca-affordability-threshold-increases-for-2025-plan-year) increased to 9.02%. For 2026, the IRS has again updated key numbers, including affordability thresholds and penalties. Here’s what you need to know for plan years beginning in 2026. ## 2026 ACA Affordability Threshold For the 2026 plan year, an employer’s health coverage will be considered affordable if the employee’s required contribution does not exceed 9.96% of household income. This is an increase from 9.02% in 2025. Employers can use one of the IRS “safe harbor” methods to measure affordability: - **W-2 wages** - **Rate of pay** - **Federal Poverty Line (FPL)** Using a safe harbor protects your business from penalties if the calculation is done correctly. ## 2026 Employer Shared Responsibility Penalties (§4980H) The IRS penalties for not complying with ACA employer mandates have also increased: | Penalty Type | 2026 Amount | Notes | | --- | --- | --- | | **4980H(a)** – No coverage / fail to offer to ≥95% of full-time employees | $3,340 per full-time employee (minus first 30) | Applies if at least one employee receives a Marketplace subsidy | | --- | --- | --- | | **4980H(b)** – Coverage offered but unaffordable or not minimum value | $5,010 per full-time employee receiving Marketplace subsidy | Applies if coverage fails affordability or minimum value tests | | --- | --- | --- | ## Reporting & Compliance Reminders - **Forms 1094-C / 1095-C**: Required for ALEs (50+ FTEs) - **Deadline to employees**: January 31, 2027 - **Deadline to IRS**: February 28, 2027 (paper) / March 31, 2027 (electronic) - Maintain proper documentation to prove coverage was offered and affordable. ## Minimum Value Coverage Coverage is considered minimum value if it pays at least 60% of total allowed costs for benefits. Employers should review plan designs annually to ensure compliance. ## What This Means for Employers - **Large employers (50+ FTEs)**: Double-check that your plans remain affordable under the new 9.96% threshold. - **Payroll & HR systems**: Update contribution calculations, safe harbors, and reporting tools. - **Employee communication**: Clear documentation of coverage offers helps protect against penalties. Staying ahead of ACA compliance can save your business from costly penalties and administrative headaches. For more details on last year’s updates and the 2025 plan year affordability threshold, visit our [Payroll and Tax Year-End Resources](https://info.ahola.com/payroll-year-end-resources). ### Reply a Comment ## RELATED POSTS [![](https://blog.ahola.com/hubfs/Imported_Blog_Media/law-image-1.jpg) ](https://blog.ahola.com/irs-lowers-2020-aca-affordability-threshold) [IRS Lowers 2020 ACA Affordability Threshold](https://blog.ahola.com/irs-lowers-2020-aca-affordability-threshold) [![](https://blog.ahola.com/hubfs/ACA.jpg) ](https://blog.ahola.com/aca-affordability-threshold-increases-for-2025-plan-year) [ACA Affordability Threshold Increases for 2025 Plan Year](https://blog.ahola.com/aca-affordability-threshold-increases-for-2025-plan-year) [![](https://blog.ahola.com/hubfs/Imported_Blog_Media/sharon-mccutcheon-8lnbxtxfgzw-unsplash.jpg) ](https://blog.ahola.com/dol-issues-new-overtime-ruling) [DOL Issues New Overtime Ruling, With Large Raise to Overtime Floor](https://blog.ahola.com/dol-issues-new-overtime-ruling) ## SUBSCRIBE ### Recent posts - [Professionalizing HR Without Losing Your Family Culture ](https://blog.ahola.com/professionalizing-hr-without-losing-your-family-culture) - [Why Encouraging Employees to Take Summer Vacation Benefits Your Workplace ](https://blog.ahola.com/why-encouraging-employees-to-take-summer-vacation-benefits-your-workplace) - [Ahola Named a 2026 Top Workplace — Six Years Running! ](https://blog.ahola.com/ahola-named-a-2026-top-workplace) - ### Topics - [Affordable Care Act (13)](https://blog.ahola.com/tag/affordable-care-act) - [Benefits (223)](https://blog.ahola.com/tag/benefits) - [Cybersecurity (1)](https://blog.ahola.com/tag/cybersecurity) - [Employee Engagement (255)](https://blog.ahola.com/tag/employee-engagement) - [Employees (603)](https://blog.ahola.com/tag/employees) - [Family Business Insights (10)](https://blog.ahola.com/tag/family-business-insights) - [Hiring (282)](https://blog.ahola.com/tag/hiring) - [Human Resources (645)](https://blog.ahola.com/tag/human-resources) - [Laws/Policies (26)](https://blog.ahola.com/tag/laws-policies) - [Managing COVID-19 (153)](https://blog.ahola.com/tag/managing-covid-19) - [News Release (56)](https://blog.ahola.com/tag/news-release) - [Offboarding (3)](https://blog.ahola.com/tag/offboarding) - [onboarding (7)](https://blog.ahola.com/tag/onboarding) - [Payroll (428)](https://blog.ahola.com/tag/payroll) - [Recruiting (142)](https://blog.ahola.com/tag/recruiting) - [Safety (121)](https://blog.ahola.com/tag/safety) - [Tax Compliance (230)](https://blog.ahola.com/tag/tax-compliance) - [Time & Attendance (124)](https://blog.ahola.com/tag/time-attendance) - [Training & Development (214)](https://blog.ahola.com/tag/training-development) - [Trending Topic (75)](https://blog.ahola.com/tag/trending-topic) - [Uncategorized (1)](https://blog.ahola.com/tag/uncategorized) - [Webinars (69)](https://blog.ahola.com/tag/webinars) - [Workers Comp (1)](https://blog.ahola.com/tag/workers-comp) [see all topics](https://blog.ahola.com/aca-affordability-employer-mandate-updates-for-2026-plan-year#) ### GENERAL DISCLAIMER This blog is for informational and educational purposes only. It does not constitute legal advice, and cannot constitute legal advice, because the authors are not licensed attorneys. Readers should not rely or act upon any information presented on this blog without seeking professional legal counsel. The views expressed in each post are those of the author, and the author alone; they are not the views of Ahola. The information provided in this blog is general, and based on information available as of the date of publishing. Information herein is provided on an “as is” or “as available” basis; we make no warranty of any kind to you regarding the information provided and disclaim any liability for damages from use of the blog or its content. Please consult an attorney to obtain advice with respect to any particular question or issue. 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