Employee Benefits News
Complying with the ACA's Pay-or-Play Rules for 2027
The Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum-value health coverage to their full-time employees (and dependents) or potentially pay a penalty to the IRS. This employer mandate is also known as the “pay-or-play” rules. Small employers who are not ALEs are not subject to the ACA’s pay-or-play rules.
An ALE may be subject to a pay-or-play penalty if at least one full-time employee receives a premium tax credit for purchasing individual health coverage through an Exchange and the ALE:
- Did not offer health plan coverage to at least 95% of full-time employees and their dependents;
- Offered health plan coverage to at least 95% of full-time employees but not to the specific full-time employee receiving the credit; or
- Offered health plan coverage to full-time employees that was unaffordable or did not provide minimum value.
Depending on the circumstances, one of two penalties may apply under the pay-or-play rules: the 4980H(a) penalty or the 4980H(b) penalty.
This checklist outlines key steps for employers to comply with the ACA’s pay-or-play rules for 2027.
Preparing for Medicare Part D Creditable Coverage Changes in 2027
The Inflation Reduction Act (IRA) of 2022 continues to reshape the Medicare Part D program, which will affect the creditable coverage status of employer-sponsored prescription drug coverage for 2027. As a result, this may make it harder for certain plans to qualify as creditable coverage. To navigate these changes and ensure compliance, employers must proactively review their health plans’ prescription drug coverage status.
The checklist linked below is designed to help employers understand the implications of the revised creditable coverage methodologies, assess their current plan’s creditable coverage status, and identify necessary adjustments to comply with federal requirements and support their Part D-eligible participants.
Use this checklist as a guide when reviewing your company’s compliance with Medicare Part D’s disclosure requirements for 2027.
2027 Medicare Part D Creditable Coverage Changes
FAQ: 2026 Sentara/Anthem Contract Dispute
Health insurance companies (Anthem) and healthcare companies (Sentara) contract with each other to agree on covered medical services and the amount the insurance company will reimburse participating providers for those services. These contracts are periodically renegotiated, and in this case, after several months of negotiations, Anthem and Sentara are unable to reach an agreement on the 2027 reimbursement rates.
What Happens Next?
On July 31, 2026, Sentara notified Anthem that, unless an agreement is reached, the current contract will expire on December 31, 2026, affecting nearly 380,000 Anthem members across Virginia. Negotiations between the two companies are continuing.
What Does That Mean to Those Anthem Members?
Since the current contract is in effect until December 31, there is no immediate impact on Anthem members; however, if the negotiation impasse continues beyond December 31, Anthem members may lose in-network access starting January 1, 2027.
Is There Anything That Anthem Members Should Do at This Time?
Anthem members do not need to take any action right now. They can continue to access their healthcare services as usual through December 31.
Does this Affect Anthem Members Who Live in North Carolina?
Sentara’s North Carolina providers and facilities are not affected by the negotiations. However, any Anthem member who accesses a Sentara provider in Virginia, no matter where they live, will be affected if an agreement is not reached.
What If an Anthem Member Is Pregnant or Has an Emergency?
Emergency services will continue to be covered at in-network levels. Some members in active treatment, including pregnancy and cancer care, may qualify for temporary continuity-of-care coverage.
Here at Towne Benefits, we will continue to monitor the progress of the Anthem/Sentara negotiations. In the meantime, please reach out to your Towne Benefits Consultant if you have any questions.
Upcoming Webinar - Coming Soon to Virginia: New Paid Leave Laws
Two new laws - Paid Sick Leave and Paid Family and Medical Leave Insurance - are on the horizon for Virginia employers and employees. Join Barbara Jennings at Towne Benefits for an informative webinar to learn what these changes mean for your organization and how to prepare.
We look forward to helping you stay informed and stay compliant as these laws are phased in - and hope you can join us.
Note: This is a second presentation of the webinar from July 22, 2026.
New Episode! - HR on Mic Podcast
Snow Days, Holidays, and FMLA: What Counts?
What happens when an employee's FMLA leave overlaps with a holiday, weather-related shutdown, or unexpected business closure?
In this episode of HR on Mic, Corbin and Barbara break down how employers should handle FMLA leave during business closures, explore common scenarios, and share practical guidance to help organizations stay compliant and accurately account for FMLA leave.
Our HR on Mic podcast is your source for thoughtful discussions about HR, compliance, benefits, and treating people right.