ACA Penalties Increased for 2026: What Employers Should Know

As healthcare compliance requirements continue to evolve, employers should be aware that Affordable Care Act (ACA) employer penalties increased again for 2026. For applicable large employers (ALEs), these changes make accurate benefits administration and eligibility tracking more important than ever.

Even employers offering health coverage can face penalties if coverage does not meet affordability or minimum value requirements under ACA guidelines.

Which Employers Are Subject to ACA Requirements?

In general, ACA employer mandate requirements apply to Applicable Large Employers (ALEs), which are employers averaging 50 or more full-time and full-time equivalent employees.

ALEs are generally required to:

• Offer qualifying health coverage to eligible full-time employees
• Ensure coverage meets affordability standards
• Track employee eligibility accurately
• Complete required ACA reporting

Failure to properly manage these requirements can result in significant penalties.

ACA Penalties Increased for 2026

For 2026, the ACA affordability percentage is 9.96%, making it increasingly important for employers to review employee payroll deductions, contribution strategies, and eligibility tracking carefully.

Employer mandate penalties also increased for 2026, including penalties related to:

• Failure to offer qualifying coverage
• Offering coverage that is considered unaffordable

These penalties are assessed on a per-employee basis, which means even small administrative errors can create substantial financial exposure for employers over time.

Affordability Calculations Matter

One of the most common compliance concerns involves affordability testing.

Employers should regularly review:

• Employee payroll deductions
• Hourly wage calculations
• Salary structures
• Contribution strategies
• Benefit eligibility tracking

Changes in employee wages or payroll practices can unintentionally create affordability issues if not monitored carefully.

Accurate Eligibility Tracking Is Critical

ACA compliance involves more than simply offering a health plan. Employers must also properly track:

• Full-time employee status
• Variable hour employees
• Measurement periods
• Waiting periods
• Employee classifications
• Enrollment offers and waivers

Incorrect classifications or inconsistent administration can create reporting issues and potential penalties.

Payroll and Benefits Coordination Is Important

Many ACA issues stem from disconnects between payroll systems, enrollment platforms, and carrier records.

Employers should periodically review:

• Payroll deductions
• Benefit elections
• Eligibility dates
• Employee classifications
• Carrier billing records
• Enrollment system accuracy

Ongoing audits and reconciliation efforts can help identify issues before they become larger compliance concerns.

Documentation Still Matters

Employers should maintain organized documentation related to:

• Coverage offers
• Waivers
• Eligibility determinations
• Payroll deductions
• ACA reporting records
• Employee communications

Strong documentation can become extremely important if questions arise regarding compliance or reporting accuracy.

Proactive Reviews Can Help Reduce Risk

ACA compliance continues to be an area where small administrative issues can lead to larger financial exposure over time. Periodic reviews of payroll practices, benefit administration procedures, and eligibility tracking can help employers identify potential concerns early.

How Campbell Insurance Can Help

Campbell Insurance works with employers to support employee benefits administration, ACA compliance guidance, HR support, payroll and enrollment coordination, and broader risk management strategies.

Our team helps businesses identify potential compliance concerns, improve operational processes, and strengthen benefits administration practices designed to help protect both the organization and its employees.

If you would like assistance reviewing your current ACA processes or benefits administration practices, we would be happy to help.

Every business has unique compliance, insurance, and operational considerations. Campbell Insurance works with employers to help identify practical solutions and connect clients with appropriate resources based on their specific needs.