IRS Announces Substantial Increase in 2026 ACA Employer Shared Responsibility Penalties

For 2026, the ACA affordability threshold was increased to 9.96%–meaning that many employers will be required to pay less for employee coverage in 2026 because the affordability percentage increased. Now, the IRS has announced a substantial increase in the penalties that can be assessed in 2026 if the employer fails to offer affordable coverage to at least 95% of its full-time employees (and dependents) and at least one employee receives a premium tax credit. The penalties under IRC Section 4980H(a) were increased to $3,340 (up from $2,900 for 2025, marking a $440 increase after decreasing between 2024 and 2025). The penalties under IRC Section 4980H(b) were increased to $5,010 (up from $4,350 in 2025, marking a $660 increase). For more information on the employer mandate penalties, visit Tax Facts Online. Read More: Link to Q469. Note: Q is updated.