Weekly Health Compliance Briefing

May 13, 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 Notes

 

ACA Employer Shared Responsibility Penalty Adjustments for 2027 Announced by IRS
The Internal Revenue Service (IRS) recently released Revenue Procedure 2026-22 which announced the 2027 indexing adjustments to the applicable dollar amounts used to calculate employer shared responsibility (ESR) payments under the Affordable Care Act (ACA). 

As background, applicable large employers (ALEs) may be liable for an ESR penalty under Internal Revenue Code Section 4980H(a) if they fail to offer minimum essential coverage (MEC) to 95 percent of full-time employees (and their dependents, excluding spouses), if the employee receives subsidized coverage through an ACA Exchange.

Alternatively, ALEs may be subject to a Code Section 4980H(b) penalty if they offer MEC to full-time employees (and their dependents, excluding spouses) who receive subsidized coverage through an ACA Exchange, but the offered coverage is not affordable and minimum value.

The adjusted penalty amount for the 2027 calendar year will be:

• $3,780 under Code Section 4980H(a) per full-time employee (less the 30-employee reduction) (an increase of $440 from 2026); and
• $5,670 under Code Section 4980H(b) per full-time employee that receives subsidized coverage through an ACA Exchange (an increase of $660 from 2026).

To avoid ACA ESR penalties, employers should regularly confirm that full-time employees are properly identified and then offered MEC that is both minimum value and affordable.