Employee Benefits News
ACA Pay-or-Play Changes May Impact Employers in 2026
The Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum-value (MV) health coverage to their full-time employees (FTEs) or risk paying a penalty. An applicable large employer is a business or a controlled group that averaged at least 50 full-time employees, including full-time equivalents, in the preceding calendar year. This employer mandate provision is known as the“employer shared responsibility” or “pay-or-play” rules. An ALE is only liable for a penalty if one or more of its FTEs receive a premium tax credit (PTC) to pay for health insurance through an ACA Exchange (or Marketplace).
Employers should be aware of the following changes related to the ACA’s pay-or-play rules for 2026:
- An ALE’s health coverage is considered affordable for FTEs if their required contribution for self-only coverage does not exceed 9.96% of their household income for the year (up from 9.02% for 2025);
- Pay-or-play penalty amounts significantly increase. For example, ALEs assessed with penalties because their coverage is unaffordable may be charged a monthly penalty of $417.50 for each FTE who receives a PTC (up from $362.50 for 2025);and
- The enhanced PTC expires at the end of 2025 (unless extended by Congress), which means that fewer individuals will qualify for the PTC and subsidy amounts will be smaller.
3 Ways to Build an Effective Employee Benefits Package
The rising cost of healthcare, a lack of transparency around services and pricing, evolving workforce expectations, and the complexity of the benefits ecosystem have made it increasingly difficult to offer elective benefits that employees consistencly use and value.
Updated Administrative Service Agreement and Business Associate Agreement Documents from Towne Benefits
To provide the range of services we offer, Towne Benefits has Administrative Service Agreements and Business Associate Agreements with every client. As rules and regulations evolve, we periodically update these agreements to ensure compliance with all applicable laws. In the coming weeks, you will receive a request to sign an updated Administrative Service Agreement (ASA) and Business Associate Agreement (BAA). These agreements are designed to safeguard your information in full compliance with applicable laws.
These agreements will be sent from your Towne Benefits professional via DocuSign for your electronic signature. We want to assure you that this is a legitimate request from Towne Benefits.
Please let us know if you have any questions or concerns.
Medicare Part D Notices Are Due Before October 15
Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable.
Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before October 15, 2025—the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices for employers to use.
Click here for more information and action steps employers should take.
Sentara Health Plans Gag Clause Prohibition Compliance Attestation Due October 15
Sentara Health Plans is gathering information to meet the timelines for the required Gag Clause Prohibition Compliance Attestation (GCPCA), due no later than December 31, 2025.
The Gag Clause provision prohibits group health plans and health insurance issuers from entering into agreements with providers that prevent enrollees, plan sponsors, or referring providers from seeing provider-specific cost and quality data.
As a courtesy, Sentara Health Plans will attest on behalf of BusinessEDGE® and Self-funded groups. A representative from your group will need to complete an electronic form to supply additional information so that Sentara Health Plans can submit on your behalf.
What You Need to Do:
Please complete the Gag Attestation Form no later than October 15, 2025.
HR on Mic - Improving a Toxic Workplace Culture
Company cultures can go bad over time. Join HR on Mic hosts Corbin and Barbara as they discuss how to recognize a toxic culture and practical steps you can take to turn things around.