Affordable Care Act Adjusted Amounts for 2026
Employers with 50 or more full-time equivalent employees are considered “applicable large employers” (ALEs) under the Affordable Care Act. ALEs must offer at least 95% of their full-time employees health insurance coverage that is both affordable and provides minimum essential coverage—or face potential penalties.
Affordability Percentage for 2026
The IRS has announced the 2026 affordability percentage at 9.96%, up from 9.02% in 2025. Coverage is considered affordable if an employee’s required contribution for self-only coverage does not exceed this percentage of their household income.
Because employers generally don’t know employees’ household incomes, the IRS provides three safe harbors:
- W-2 wages
- Rate of pay (hourly rate × 130 for hourly employees)
- Federal poverty line
If the lowest-cost, employee-only coverage meets the affordability percentage under any of these safe harbors, the plan is deemed affordable.
Employer Shared Responsibility Payments for 2026
Applicable Large Employers who do not comply may owe employer shared responsibility (ESR) payments:
- Failure to offer coverage to at least 95% of full-time employees and their dependents: $3,340 per full-time employee (minus up to 30 employees) if at least one employee receives a premium tax credit through the Exchange.
- Offering coverage that is unaffordable or does not provide minimum value: $5,010 annually per employee who receives a premium tax credit, calculated monthly.
Next Steps
If you have questions about how these ACA updates may affect your business, contact your Mize payroll processor for assistance.
