ACA Reporting Changes 2026 for Employers

For many employers, March 2, 2026 is the first ACA reporting date that matters. That is the deadline to furnish 2025 Forms 1095-C or 1095-B to applicable individuals. But the ACA reporting changes 2026 involve more than getting forms out the door. They also affect how statements may be delivered, how employers prepare for electronic filing, and how benefits teams should approach 2026 affordability decisions.

The practical challenge is that ACA reporting is built from payroll, eligibility, enrollment, and coverage data that often live in different systems. A filing can look straightforward until a terminated employee, a midyear eligibility change, or an incorrect employee contribution amount creates a mismatch. Employers that begin reconciliation early have more time to correct the underlying record rather than rushing to explain it after a filing is rejected or an employee receives an unexpected notice.

ACA reporting changes 2026: Separate this year’s filing from next year’s coverage

There are two calendars employers need to keep straight. In early 2026, applicable large employers and other reporting entities are reporting information about health coverage offered or provided during calendar year 2025. The affordability percentage and benefit decisions for the 2026 plan year will generally affect forms furnished in early 2027.

That distinction matters. A company should not assume that a compliant 2025 filing proves its 2026 offer strategy is compliant. Each calendar year needs its own review of employee classifications, hours of service, coverage eligibility, contribution levels, and the codes used on Forms 1095-C.

Applicable large employers, generally those with an average of at least 50 full-time employees and full-time equivalent employees in the prior year, have employer shared responsibility reporting obligations under Section 6056. Employers with self-funded plans may also have Section 6055 reporting responsibilities for individuals enrolled in coverage. The correct form and filing approach depend on the employer’s size and funding arrangement, so a fully insured small employer should not simply copy the process used by a self-funded applicable large employer.

The key 2026 deadlines for 2025 coverage

For calendar-year 2025 reporting, covered individuals must generally receive their Form 1095-C or Form 1095-B by March 2, 2026. The usual January 31 furnishing deadline receives an automatic 30-day extension under the current rules, which is why the date falls in early March.

Electronic filing with the IRS is generally due by March 31, 2026. This deadline applies to Forms 1094-C and 1095-C, and to applicable 1094-B and 1095-B filings. Most employers should expect to file electronically. The IRS electronic filing threshold is based on an aggregate count of information returns, and organizations required to file 10 or more returns in total generally must use electronic filing rather than paper.

That aggregate threshold is easy to overlook. An employer may have fewer than 10 ACA statements but still exceed the threshold once W-2s, 1099s, and other information returns are counted. Payroll providers and reporting vendors can help transmit a file, but the employer remains responsible for validating the information supplied.

A late or inaccurate filing can create exposure to information-return penalties and can complicate an employer shared responsibility assessment. The better approach is to treat the IRS deadlines as the end of a controlled process, not the start of one.

Electronic delivery is easier, but it still requires a process

One of the most meaningful administrative changes is the expanded ability to furnish ACA statements electronically. Reporting entities can generally use an alternative electronic delivery method without obtaining affirmative consent from each recipient, provided they meet the applicable notice and paper-request requirements.

For employers, this can reduce printing, mailing, returned mail, and last-minute address challenges. It can be especially useful for organizations with remote workers, seasonal employees, or a high volume of former employees who need a statement for their tax records.

Electronic delivery is not a reason to eliminate employee choice. Individuals who request a paper statement must receive one. Employers using electronic delivery should confirm that their process provides the required notice, clearly explains how to request paper delivery, protects access to the statement, and retains evidence that the statement was made available. A portal that works well for active employees may not work for a former employee whose system credentials have been deactivated.

Whether electronic delivery is a good fit depends on the workforce. A digital-first employer may see meaningful administrative savings. A workforce with limited computer access, frequent address changes, or a high percentage of retirees may need a more deliberate paper-and-electronic communication plan.

Affordability moves again for 2026 plan years

For plan years beginning in 2026, the ACA affordability percentage is 9.96%. In practical terms, an employee’s required contribution for the lowest-cost self-only minimum essential coverage that provides minimum value must not exceed 9.96% of the applicable household-income measure.

Employers do not usually know an employee’s household income, which is why the federal affordability safe harbors remain central to plan design and compliance. Depending on the employer’s circumstances, the W-2 wages safe harbor, rate of pay safe harbor, or federal poverty line safe harbor may be used to evaluate affordability.

The percentage is higher than it was for 2025, but that does not automatically mean an employer should raise employee contributions. Contribution strategy involves more than avoiding a potential penalty. Employers also need to consider recruitment, retention, participation levels, collective bargaining obligations where applicable, and the impact of higher employee costs on lower-wage workers.

A practical review compares the planned 2026 employee-only contribution against the safe harbor the employer intends to use. It should also account for employees whose hourly rate changes, employees with reduced schedules, and employee groups with different medical plan options. The lowest-cost qualifying self-only option is the critical benchmark, not necessarily the plan most employees select.

Build the reporting file before February

ACA reporting quality is determined long before forms are generated. Employers should begin with a year-end census and eligibility review, then compare the data to payroll and enrollment records. The goal is to identify inconsistencies while corrections are still manageable.

Review full-time employee determinations under the employer’s measurement method, including new hires, rehires, leaves of absence, and employees who changed from variable-hour to full-time status. Confirm that each month of the year has the correct offer-of-coverage code and, where applicable, the correct affordability safe harbor or other Section 4980H code.

It is equally important to check employee names, Social Security numbers, mailing addresses, dates of birth where required, and covered dependent information for self-funded plans. A clean eligibility file can still produce errors if identifying information from payroll does not match the reporting vendor’s file.

Before submission, review any error reports from the reporting platform and retain the final filed forms, transmittal confirmation, and documentation supporting the codes used. If the IRS later sends an employer shared responsibility payment notice, those records are essential to evaluating the notice and responding within the stated timeframe.

Coordinate HR, payroll, benefits, and vendors

ACA reporting is often assigned to one person, but no single department typically owns all the needed data. HR may know when an employee became benefit eligible. Payroll has wage and hours information. The benefits administrator has enrollment data. A third-party reporting vendor may build and submit the forms.

Assigning clear ownership reduces the risk that everyone assumes someone else reviewed a problem. Set internal deadlines for data delivery, reconciliation, draft-form review, employee statement delivery, and IRS transmission. Ask the reporting vendor when it needs final eligibility and payroll data, how it handles corrections, and whether it provides proof of employee furnishing as well as IRS acceptance.

Employers should also review their procedures after filing season. A recurring mismatch between payroll deductions and reported affordability codes is not just a reporting issue. It may signal that enrollment, payroll, and benefits administration processes need to be better aligned.

A thoughtful 2026 strategy protects more than a filing deadline. It gives leadership a clearer view of whether the health plan remains affordable, competitive, and administratively manageable for the people it is designed to support. Franklin Benefits Group can help employers bring those compliance and benefits decisions into one practical conversation before reporting season becomes urgent.