The Washington Report

January 28, 2026

While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.

Health

DOL Expands DFVC Program to Include Form M-1 Filings
The U.S. Department of Labor (DOL) has expanded the Delinquent Filer Voluntary Compliance (DFVC) Program to cover Multiple Employer Welfare Arrangements (MEWAs) that have missed their Form M-1 filing requirements.

As background, the DFVC Program was designed by the DOL to encourage voluntary compliance with the annual reporting requirements under ERISA. The DFVC Program gives delinquent plan administrators a way to avoid potentially higher civil penalty assessments by satisfying the program’s requirements and voluntarily paying a reduced penalty amount. Previously, the DFVC Program applied to plan administrators filing overdue Forms 5500. Under the program, the maximum penalty amount for a delinquent Form 5500 for a given plan year is $750 for small plans (i.e., a plan with fewer than 100 participants at the beginning of the plan year) and $2,000 for large plans (i.e., a plan with 100 or more participants at the beginning of the plan year). If submitting more than one delinquent Form 5500 filing for the same large plan, the maximum penalty amount is $2,000 for each Form 5500, not to exceed $4,000 per plan. The relief under the DFVC Program is not available if the DOL has already notified the plan of its failure to file.

Effective December 31, 2025, the DOL announced that the DFVC Program has been expanded to include delinquent Form M-1 filings. Note that it is not uncommon for a group health plan to be (or become) an “inadvertent MEWA,” either because the various employers involved were related but not in the same controlled group or because of a change in their controlled group status, e.g. in a Mergers & Acquisitions (M&A) transaction (although there are Form M-1 filing exceptions for certain M&A transactions that result in a MEWA but are temporary in nature). Now, administrators subject to the requirement who have missed the Form M-1 filing will be permitted to file delinquent Form M-1 filings through the expanded program and voluntarily pay a maximum penalty of $750. Without participating in the DFVC Program, the statutory penalty for failure to file Form M-1 is up to $1,992 per day (for 2025). Aon recommends that administrators of MEWAs speak with their legal counsel to determine whether they have been compliant with Form M-1 filing requirements and consider utilizing the expanded DFVC Program if missed filings are discovered.

2026 Federal Poverty Levels Announced; Monitor Impact on ACA Affordability
The Department of Health and Human Services updated guidelines, effective January 13, 2026, that set the 2026 federal poverty level (FPL) at $15,960 (up from $15,650 in 2025) for a person working in the mainland United States, but $19,950 (up from $19,550 in 2025) for a person working in Alaska and $18,360 (up from $17,990 in 2025) for a person working in Hawaii. Under the Affordable Care Act (ACA), the FPL can affect employer mandate assessments. This is because employers can use the FPL as an affordability safe harbor to test whether their lowest-cost, self-only minimum essential coverage with minimum value is affordable to full-time ACA employees. When conducting this test, an employer may use the FPL in effect within six months before the start of the plan year. For this affordability testing, employers use the FPL for the state in which the employee is employed. As announced in July 2025, the ACA benchmark percentage for determining the affordability of employer-sponsored health coverage increased significantly (to 9.96 percent of an employee's household income for the 2026 plan year, up from the 2025 plan year level of 9.02 percent).