How to Simplify ACA Reporting and Stay Compliant in 2026 

Affordable Care Act (ACA) reporting is a yearly responsibility that can feel increasingly complex, especially as rules, thresholds, and penalties continue to change. For the 2026 ACA reporting season, which covers the 2025 calendar year, Applicable Large Employers (ALEs) must prepare for updated affordability standards, rising penalties, and new options for delivering required forms to employees. 

Understanding what is due, what has changed, and how to streamline the process can help employers stay compliant and avoid costly mistakes. 

What’s Due for the 2026 ACA Reporting Season 

Employers classified as ALEs are required to report health coverage information to both employees and the Internal Revenue Service (IRS) using Forms 1094-C and 1095-C. 

Here are the key deadlines for the 2026 reporting year: 

Form 1095-C to employees 
 
Must be furnished to full-time employees by March 2, 2026. This form outlines the health coverage that was offered during the 2025 calendar year. 

Forms 1094-C and 1095-C to the IRS 
 
Electronic filings are due by March 31, 2026. 

Electronic filing requirement 
 
Employers filing 10 or more information returns must submit forms electronically, per IRS requirements. 

Missing deadlines or filing incorrect information can result in significant penalties, making accuracy and preparation critical. 

What’s Changed for ACA Reporting in 2026 

Several notable updates will affect how employers approach ACA compliance for this reporting cycle. 

Higher affordability threshold 

The IRS has increased the ACA affordability percentage to 9.96 percent, up from 9.02 percent in 2025. This percentage determines whether an employer’s lowest-cost, self-only coverage option is considered affordable for employees. 

While the higher threshold provides more flexibility for employer contributions, it still requires careful calculations and documentation to maintain compliance. 

Increased penalties for non-compliance 

ACA penalties continue to rise. Projected Employer Shared Responsibility Payment amounts include: 

• Section 4980H(a) penalties exceeding $3,340 per employee, after the first 30 employees, for failing to offer coverage. 

• Section 4980H(b) penalties exceeding $5,010 per affected employee for offering coverage that is unaffordable or does not meet minimum value. 

These increases heighten the need for accurate tracking, reporting, and timely coverage. 

New alternative furnishing method 

For the first time, employers may use an Alternative Furnishing Method instead of mailing paper copies of Form 1095-C. Employers can post a clear and accessible notice on their website explaining how employees can obtain their form. 

The notice must be easy to find and remain available through October 15, 2026. When implemented correctly, this option can significantly reduce printing and mailing costs. 

Potential impact of expiring subsidies 

Enhanced premium subsidies are scheduled to expire, which could result in more employees seeking coverage through the Health Insurance Marketplace. This may increase the likelihood of employer penalty notices, making accurate ACA reporting and coverage offers even more important. 

How Employers Can Simplify ACA Reporting 

As requirements expand and penalties rise, simplification is key. Employers can take several steps to reduce risk and administrative burden. 

Leverage technology and automation 

ACA reporting software can help track employee hours, monitor eligibility, generate forms, and flag potential issues before deadlines arrive. Automation reduces manual errors and saves time during the reporting season. 

Use IRS safe harbors 

Applying one of the IRS affordability safe harbors can simplify calculations and provide added protection. Employers may use the Form W-2, Rate of Pay, or Federal Poverty Line safe harbor to demonstrate affordability without relying on household income data. 

Monitor eligibility throughout the year 

Waiting until the end of the year can lead to compliance gaps. Regularly reviewing employee classifications, especially for variable-hour and seasonal employees, helps ensure coverage is offered to at least 95% of full-time employees, which is critical for avoiding the most severe penalties. 

Take advantage of digital delivery options 

The new electronic furnishing method provides an opportunity to streamline distribution while remaining compliant. Employers must comply with IRS visibility and accessibility requirements, but when implemented correctly, this option can simplify administration and reduce costs. 

How GMS Helps Employers Stay ACA Compliant 

ACA reporting is just one piece of a much larger compliance puzzle. At Group Management Services (GMS), we help employers manage ACA requirements with confidence through expert guidance, technology-driven tracking, and end-to-end reporting support. 

From monitoring employee eligibility and applying affordability safe harbors to preparing and filing required forms accurately and on time, GMS helps businesses reduce risk and stay focused on growth. 

If ACA reporting feels overwhelming or if you want a more efficient approach for 2026 and beyond, GMS is here to help.