Applicable large employers face a familiar but unforgiving task each winter: reporting their group health coverage details to the IRS. With key ACA Affordable Care Act filing deadlines falling in early 2026, employers with 50 or more full-time equivalent employees should already be reviewing records, reconciling data and preparing required forms to avoid penalties.
ACA reporting is largely about accuracy and timing, and problems often stem from waiting too long to pull information together. Here’s how to get it right and avoid penalties.
Who must report and why
An applicable large employer, or ALE, is generally an employer that averaged at least 50 full-time employees, including full-time equivalents, during the prior calendar year. Employers that met that threshold in 2025 must comply with ACA employer shared responsibility reporting in 2026.
ALEs must report whether they offered minimum essential coverage to full-time employees and whether that coverage met affordability and minimum value standards. The IRS uses this information to determine whether an employer must pay a penalty for failing to meet these requirements and to verify employees’ eligibility for premium tax credits if they purchase their own health insurance on the ACA marketplace.
The required forms
ACA reporting for ALEs revolves around two forms:
1. Form 1095-C — This form must be furnished to each full-time employee, regardless of whether the employee enrolled in coverage. The form reports the health coverage offered, if any, for each month of the year.
2. Form 1094-C — This form is filed with the IRS and serves as a summary transmittal of all 1095-C forms. Form 1094-C aggregates employer-level data, including employee counts and whether the employer is part of an aggregated group.
Due date: Employers must file paper Forms 1094-C and 1095-C with the IRS on or before March 2 for firms eligible to file on paper and electronically on or before March 31, and no additional extensions are available. Employers that file a combined total of 10 or more information returns must file electronically.
Prepare
The most common ACA reporting issues trace back to incomplete or inconsistent data. Employers can reduce risk by preparing well in advance:
Confirm 2025 full-time and full-time equivalent counts to ensure ALE status was correctly determined.
Review payroll, time-tracking and benefits systems to ensure hours worked, eligibility and coverage offers align.
Verify employee names and Social Security numbers.
Confirm monthly employee contributions for the lowest-cost, self-only plan that provides minimum value.
Review affordability calculations using the 2026 affordability threshold of 9.96%.
Be aware that hybrid and remote work arrangements can complicate efforts to track employee hours and determine eligibility. Make sure your system accurately captures hours worked regardless of the employee’s location.
Potential penalties for noncompliance
Late, incomplete or incorrect filings can trigger penalties under Internal Revenue Code Sections 6721 and 6722 for failure to file correct information returns and failure to furnish correct payee statements. Penalties generally apply per form and can add up quickly.
Separately, inaccurate reporting can expose employers to employer shared responsibility assessments if at least one full-time employee receives a premium tax credit through a marketplace. For 2026:
The penalty is $3,340 per full-time employee, excluding the first 30 employees, if coverage was not offered to at least 95% of full-time employees and dependents.
The penalty is $5,010 per affected employee if coverage was offered but was unaffordable or failed to meet minimum value, and the employee received a premium tax credit.
Bottom line
ACA reporting is not just a new year task. Employers that reconcile data throughout the year, confirm affordability calculations and review forms before deadlines are far less likely to face penalties or IRS follow-up.
Preparation should be well underway in January. Waiting until February often leaves too little time to fix errors before the March filing deadlines arrive.
The expiration of enhanced premium subsidies that have helped millions of Americans afford individual health insurance through the Affordable Care Act exchanges at the end of 2025 will be felt by employers offering group health plans.
As exchange coverage becomes less affordable for many households, more workers may look to employer-sponsored plans for stability, while employers that fund Individual Coverage Health Reimbursement Arrangements (ICHRA) to help employees buy coverage may need to revisit affordability and contribution strategies because the same employer funds may cover a smaller share of premiums than before when purchasing health insurance on Healthcare.gov and other state-run exchanges.
The temporary subsidy enhancements enacted during the COVID-19 pandemic removed the 400% federal poverty level income cap and increased the value of premium tax credits across income brackets. As a result, subsidized exchange enrollment nearly doubled between 2020 and 2024. If the enhanced subsidies expire, higher-income households will lose eligibility altogether while those who remain eligible will receive smaller credits and pay more for their share of the premium.
Increasing enrollment pressure
For employers offering traditional group health coverage, one likely consequence is increased enrollment pressure. As individual premiums rise, employees who previously declined employer coverage may opt in during open enrollment.
That could affect plan participation, contribution levels and claims experience particularly if workers with higher health care needs are more motivated to seek employer coverage.
Labor dynamics could also shift. Workers without access to affordable employer-sponsored coverage may be more inclined to change jobs to secure benefits, potentially influencing recruitment and retention in competitive labor markets. At the same time, fewer employees qualifying for exchange subsidies could slightly reduce applicable large employers’ exposure to costly ACA “pay or play” penalties, which are triggered when full-time employees receive premium tax credits.
ICHRA effects
The impact may be more immediate for employers offering ICHRAs, which reimburse employees for individual market coverage rather than providing a group plan.
If subsidies shrink and marketplace premiums rise, some ICHRA allowances that were previously affordable may no longer meet regulatory affordability thresholds. Employers may need to increase contribution levels or adjust benchmark assumptions to remain compliant.
Industry experts have also warned that abrupt shifts in individual market enrollment could create volatility. A contraction in exchange enrollment — particularly if healthier individuals drop coverage — could put upward pressure on premiums, further complicating affordability for both employees and employers relying on individual-market plans.
At the same time, the uncertainty may accelerate interest in alternative benefit strategies. Employers facing steep group plan renewals may explore ICHRAs to shift risk to the broader individual market, though that strategy becomes more complex if exchange affordability deteriorates.
What employers should consider now
Now that the enhanced subsidies have expired, employers may want to:
Review group health plan affordability and employee contribution structures.
Reassess ICHRA allowance levels and benchmark plans if applicable.
Evaluate workforce demographics and possible enrollment shifts for 2026.
Prepare employee communications that explain coverage options and tradeoffs.
Employers are heading into what may be one of the most challenging years for managing group health costs.
The new “Trends to Watch in 2026” report by Business Group on Health (BGH) outlines developments that will shape next year’s benefits environment. Rising medical and pharmacy spending, a rapidly changing policy landscape and increased pressure for innovation may pressure employers to revisit long-standing strategies and consider new ones.
Below are six trends the report predicts will affect health plans.
1. Affordability pressures intensify
Employers project a median 9% increase in health care costs for 2026, dropping to 7.6% after plan design adjustments. These increases follow two years of costs that ran higher than expected, signaling that inflationary pressure has become a persistent challenge.
Chronic conditions, an aging workforce, higher medical and pharmacy prices and ongoing system fragmentation all contribute to the strain. As a result, employers may need to weigh short-term mitigation tactics against longer-term structural changes, including program reductions or redesigned plan approaches.
2. Emphasis on preventive care and primary care
With chronic disease remaining the top cost driver, employers are expected to “get back to basics.” That means increasing the focus on preventive care, evidence-based screenings and stronger primary care engagement.
Many organizations will also reassess well-being and chronic-condition programs to ensure they produce measurable results. Incentives or alternative plan designs that encourage screenings, primary care use or condition management may become more common as employers push to improve long-term health trends.
3. Pharmacy costs will continue to weigh
Drug spending is one of the fastest-growing costs, driven by GLP-1 drugs, gene and cell therapies and broader price inflation. Existing mitigation strategies are losing effectiveness, prompting employers to re-examine pharmacy benefit manager (PBM) relationships, transparency, contracting terms and utilization controls.
The rise of direct-to-consumer cash prices adds another layer of complexity, as employees may seek lower-cost options outside the plan. Employers will need a clear stance on whether to support or discourage such use.
4. Streamlining and tightening vendor partnerships
As a result of years of adding new programs, many employers now face fragmented, duplicative services and inconsistent data integration. In 2026, the report predicts that employers will place vendors under greater scrutiny and focus on measurable outcomes. Vendors will be expected to improve data sharing, coordinate care with other partners and demonstrate value.
5. Faster adoption of alternative plan models
To manage rising costs, employers will continue to explore new plan structures. Options such as copay-based designs, virtual-first plans, primary care-centered models and network-less structures are gaining traction.
We can help you compare these models with traditional preferred provider organization, health maintenance organization and high-deductible health plan options.
6. Shifting policy landscape adds uncertainty
PBM reforms, updated preventive care guidelines and new chronic-disease coverage policies may influence employer plan design. Potential ACA subsidy expirations and ongoing Medicaid eligibility changes could increase reliance on employer coverage.
With the 2026 midterm elections approaching, legislative action may slow while regulatory activity increases. Employers will need to monitor these developments closely to anticipate compliance obligations and communicate changes to employees.
Takeaway
If the BGH report is accurate, many employers will be looking for ways to cut costs, boost vendor accountability and explore new plan structures.
If you are interested in alternative plan models, we can help you compare them with preferred provider organization, health maintenance organization and high-deductible health plan options.
For your group health plan enrollees, finding a doctor who accepts their plan should be straightforward since each plan typically has a network of physicians available for enrollees. However, enrollees regularly learn that a doctor that is clearly listed in their health plan’s provider list is no longer in their insurance company’s network, which can result in delayed or denied care as well as higher out-of-pocket costs. Welcome to the problem of health plan “ghost networks,” or “ghost providers,” which are usually the result of outdated provider lists.
This problem can result in employee resentment about their group health plan and saddle them with higher costs if they are forced to go out of network to seek out care. Here’s what your employees need to know if they encounter a ghost provider and are unable to access a certain medical service.
What are ghost networks?
A ghost network occurs when a health plan lists health care providers in its directory who are not actually available to enrollees. These providers may have:
Retired or relocated without their listings being updated.
Stopped accepting your health plan.
Reached patient capacity and are not taking new appointments.
Outdated contact information that prevents enrollees from reaching them.
Many insurer health plan directories are outdated. A 2023 report from the Office of Inspector General found that despite a Centers for Medicare & Medicaid Services rule requiring insurers to update their directories every 90 days, errors persisted. Some incorrect listings had remained on the network list for over a year.
Health plan enrollees who rely on inaccurate provider directories may experience:
Delays in care:Finding an in-network provider can take weeks or even months, potentially delaying necessary medical treatment.
Unexpected costs: Beneficiaries who unknowingly visit an out-of-network provider may face high out-of-pocket expenses or denied claims.
Frustration and confusion: Patients may have to call multiple providers, only to be told that the doctor they are trying to see does not accept their plan.
What you can do
To help your staff avoid ghost networks, train them about the importance of veryifying information provided by their insurance company. This includes checking the provider’s acceptance of new patients, their willingness to see you and ensuring they are truly in-network for your specific plan.
They can do this by contacting the provider directly and verifying their network status and patient acceptance.
Before seeing a new doctor or specialist and to ensure that they are not charged for going out of network, health plan enrollees can start by verifying provider information by:
Accessing the provider portal: Use the insurer’s website to access their provider portal and search for specific providers you’re interested in.
Directly contact the insurer: Contact the provider directly (phone, e-mail or online contact form) to confirm their willingness to accept new patients and their in-network status for your plan.
Consult the provider directory: Double-check the accuracy of the insurer’s provider directory by verifying information like office locations, phone numbers, and acceptance of new patients.
If a health plan enrollee is confronted with an inaccurate listing, they can:
Inform the insurer and request that it be corrected.
File a grievance. If an enrollee is unable to make an appointment with a doctor listed as an in-network provider, they can ask the insurance company to help you schedule an appointment or file a grievance.
Health insurers pledged in June 2025 to overhaul their processes as part of a Trump administration initiative to reduce the volume of prior authorization requirements and modernize how requests are handled.
Many insurers targeted Jan. 1, 2026, for measurable reductions, but how far have they gotten? While carriers say they are making progress, provider groups such as the American Medical Association contend that little has changed for patients and clinicians on the ground.
This tension matters to employers and HR executives who sponsor group health plans because prior authorization rules influence employee access to care, administrative costs and satisfaction with their health benefits.
Why prior authorization became a flash point
Prior authorization — or prior approval — requires clinicians to secure insurer signoff before performing procedures, prescribing certain medications or ordering tests. Plans say it helps control unnecessary or low-value care.
Providers argue that approvals can take hours or days, even for routine services, leading to delayed diagnoses or treatment. News reports of patients waiting for life-saving care, sometimes with tragic outcomes, have intensified scrutiny.
The June 2025 pledge aimed to blunt these concerns and respond to growing state and federal pressure to simplify the process. Most major insurers pledged to:
Cut the number of medical services needing prior authorization, particularly common procedures like colonoscopies and cataract surgeries, by Jan. 1, 2026.
Honor existing prior authorizations for 90 days when a patient changes insurers mid-treatment.
Offer clearer explanations for denials and ensure all denials receive a medical review.
What the largest insurers are doing
UnitedHealthcare — The company dropped prior authorization requirements for 231 procedures in December 2025, including nuclear medicine studies, certain obstetrical ultrasounds and electrocardiography procedures. It previously reduced approval requirements for services with consistently high adherence to evidence-based guidelines.
Cigna — Cigna has eliminated prior authorization for nearly 100 services, added real-time status tools and expanded patient support teams that help members navigate approvals.
Humana — The insurer says it eliminated about one-third of outpatient prior authorizations, including for colonoscopies and certain imaging studies. It has committed to issuing decisions within one business day for at least 95% of complete electronic requests starting Jan. 1, 2026, and is working to automate approvals for most routine requests.
Aetna — Aetna is in the process of automating one in four PA approvals for near-instant decisions and using AI tools to help members navigate the system. It has started bundling multiple prior authorization requests for cancer imaging into single submissions and has expanded bundling to musculoskeletal services, certain surgeries, medications and related care.
Blue Cross Blue Shield plans — The association says BCBS plans around the country are reducing requirements and preparing January 2026 workflow changes. More detailed reporting is expected in spring 2026 as part of an industrywide dashboard.
State policy activity accelerates
States have become increasingly aggressive in regulating prior authorization, shaping reforms employers may encounter in the coming years. Recent actions include:
Arkansas, West Virginia and others have implemented programs that exempt high-performing physicians from prior authorization requirements.
Vermont requires 24-hour urgent decisions, while Virginia mandates 72-hour expedited reviews.
Indiana, Delaware and Oklahoma have instituted professional review standards, requiring denials to be reviewed by clinical peers or physicians with specialty expertise.
Maryland and Washington have instituted electronic submission mandates.
Wyoming and other states have implemented continuity-of-care protections that require new insurers to honor existing approvals from a prior insurer for a specified period.
Maine, Colorado and Alaska have codified transparency requirements, such as public reporting of approval and appeal data, clearer notices and mandated appeal instructions.
These state reforms, coupled with new federal timelines for Medicare Advantage and Medicaid starting in 2026, signal that regulatory pressure is likely to intensify.
Takeaway
Health insurers have pledged meaningful reductions in prior authorization, and the industry is watching to see what kind of changes they implement in 2026. The result should hopefully improve the health care experience for your employees, particularly those who have ongoing health issues that are expensive to treat.
Choosing the right dental insurance plan for your employees is always filled with compromises and difficult decisions, no matter if this is the first time you offer a dental plan at your company or you are just revising the benefits currently on offer.
The process becomes even more difficult when you look into the variety of options and types of dental benefits there are today. Here’s some information to help simplify the situation:
Coverage types
There are three basic types of dental coverage employers typically offer:
Indemnity plan — These fee-for-service style plans are the most common type. They require employees to pay monthly premiums to the insurance company, which agrees to reimburse dentist offices for the costs of the services provided.
What makes these plans so popular is the freedom that covered individuals have in choosing their own dentist. Fee-for-service plans cost more than other plans, but many people are willing to pay more to retain the ability to choose their own practitioner.
Preferred provider organization — PPO dental plans are less expensive than indemnity plans, while still providing a large pool of dentists to choose from. Individuals covered under PPO plans are given the choice of receiving care from any provider within the plan’s dentist network or choosing a non-network dentist and paying a little more in out-of-pocket expenses.
Dental health maintenance organization — A DHMO is the least expensive type of plan. Covered individuals are given an even smaller pool of in-network dentists and may not receive coverage if treated at a non-network facility. DHMOs are able to cut costs by placing a strong focus on preventative care and by offering a selective number of dentists to choose from.
Services covered
Besides choosing one of the three styles of dental insurance, the employer must decide on a benefits program that covers specific services. For example, some plans are comprehensive and cover everything from preventative care to major procedures, while others only cover preventative services.
In dental terms, preventative care refers to semi-annual check-ups and cleanings, yearly x-rays, and fluoride treatments and sealants for children covered under the plan. Basic dental care would refer to basic oral surgeries and restoration procedures. Major dental care refers to root canals, extractions, crowns, prosthetics and advanced surgeries.
Dental plans can also be customized to include services like orthodontics and cosmetic dentistry procedures through the use of riders and options. For a small fee, supplemental services can be added to bulk up basic coverage plans.
The takeaway
When facing such an important decision, numerous factors play into your choice. You must juggle the wants and needs of your employees with the cost and range of each plan. Is it better to have choices or to pay less in premiums?
The more communication you have with your staff, the better you will understand how to formulate a dental insurance plan that meets their expectations.
By promoting good oral health within the workplace and through a benefits program, you will be doing a great service to your employees and your business.
