New Members
We would like to make you aware of important changes to the Affordable Care Act (ACA) Employer Shared Responsibility provisions, commonly referred to as the “Pay-or-Play” requirements, effective January 1, 2027.
These requirements generally apply to Applicable Large Employers (ALEs), defined as employers with 50 or more full-time employees, including full-time equivalents, based on the preceding calendar year.
The IRS has announced increases to the potential employer penalties for 2027:
|
ACA Employer Penalty
|
2026
|
2027
|
|---|---|---|
|
Section 4980H(a) – Failure to offer minimum essential coverage to at least 95% of full-time employees and their dependents
|
$3,340
|
$3,780
|
|
Section 4980H(b) – Offering coverage that is unaffordable or does not provide minimum value
|
$5,010
|
$5,670
|
These amounts represent annualized penalties and may apply when at least one full-time employee receives a qualifying premium tax credit through the Health Insurance Marketplace.
What Employers Should Know
Employers subject to the ACA Pay-or-Play provisions should review their health insurance offerings and employee contribution requirements to ensure continued compliance.
In particular, employers should:
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Confirm whether they qualify as an Applicable Large Employer for 2027.
-
Ensure coverage is offered to at least 95% of full-time employees and their dependents.
-
Review employee premium contributions against the applicable 2027 affordability requirements.
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Confirm that the health plan meets minimum value standards.
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Maintain accurate eligibility, enrollment, and ACA reporting records.
How Solid Benefits Group Can Help
As an employee benefits advisor, Solid Benefits Group is available to assist with reviewing plan affordability, employer contribution strategies, and ACA compliance considerations as you prepare for 2027.
For additional information regarding the 2027 ACA Pay-or-Play requirements, including the updated penalty amounts and affordability guidelines, please refer to our attached Compliance Bulletin.
We encourage you to contact our office with any questions or concerns regarding how these changes may affect your organization.
{CLICK HERE FOR PDF }
{CLICK HERE FOR PDF }
