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August 6, 2026

News to Know

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August 6, 2026

Compliance Deadlines

  • July 31, 2026 – File Form 5500 via DOL’s eFAST2 portal (plans of 100+ participants at beginning of plan year)
  • July 31, 2026 – Pay PCORI fee for using IRS Form 720 (self-insured plans)
  • September 30, 2026 - properly disburse any Medical Loss Ratio (MLR) Rebate , as applicable
  • September 20,2026 -Disburse the Summary Annual Report (SAR) to participants (for calendar year plans)

2027 Health Plan Affordability Percentage

On July 21, 2026, the IRS released the 2027 contribution percentage to determine affordability of an employer’s group health plan under the Affordable Care Act (ACA). For plan years beginning 2027, an Applicable Large Employer’s (ALE’s) group health plan coverage is “affordable” under the ACA’s “pay or play” rules IF the required contribution for a full-time employee’s (FTEs) self-only coverage does not exceed 10.22% of an employee’s household income. Practically speaking, this means employers may increase employee’s health coverage contributions for 2027 while meeting the required ACA affordability guidelines.

  • Are you an ALE under ACA regulations? Visit IRS.gov for criteria.
  • “Affordability” & “Minimum Value” are key terms in determining how the ALE designs plans. Learn what each means at this IRS resource.
  • Do you know your employer-shared responsibility terms & rules? Find resources & Q&A at IRS.gov .

Q&A: Dependents Approaching Age 26

Question: We are an ALE under the ACA; how long must we offer coverage to a dependent child approaching age 26 so we avoid the ACA’s Employer Shared Responsibility (ESR) Penalties?

Answer: Under ACA rules, an ALE must offer coverage to an employee’s dependent child (including a child who has been legally adopted or placed for adoption) through the last day of the month in which the child turns 26, not merely through the day before the child’s birthday.

Analysis:

  1. Whois a dependent under ACA rules? “Dependents” do not include stepchildren, foster children, or children who do not reside in the U.S. or country contiguous to the U.S. & who are not U.S.citizens or nationals. Spouses are not dependents.
  2. What do the ESR rules say? A “child” reaches age 26 on the 26th anniversary of the date of their birth AND is treated as a dependent for the entire calendar month they reach age 26.For example, if a child is born August 2nd, the child is treated as a dependent for ESR purposes through August 31st of the year the child reaches age 26. Coverage for such child must be offered through the last day of August to avoid potential penalties.
  3. General ACA Mandate. The general ACA dependent coverage mandate (applicable to all plans, not just ALE’s) only requires coverage through the day before the 26th birthday (in the example above, this would be August 1st).

Source: Contributing Editors: EBIA Staff. ©2026 Thomson Reuters/EBIA. All rights reserved

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About Olivia ‘Liv’ Ash

Olivia “Liv” Ash, Esq., MS, an ERISA attorney, currently serves as AVP, Sr. Benefits Counsel for Patriot Growth Insurance Services, LLC. She holds degrees in Exercise Science, Education, & Law, with Indiana licenses in law & well-being education. Liv supports Patriot’s national suite of advisors regarding federal regulatory compliance as applied to welfare plans. Liv creates content, provides guidance to staff, presents webinars on welfare topics & often speaks at conferences, workshops, & seminars. Liv is a galleried artist; published researcher; & bestselling author in the field of emotional health.

Disclaimer: Content presented is not, nor is it intended to be legal advice; it is for general education purposes. Please consult local legal & tax counsel for specific guidance regarding any one welfare benefits plan. Content is the sole property of Patriot Growth Insurance Services, LLC, and is not to be modified in any way or used for any other purpose. © 2026 Patriot Growth Insurance Services, LLC.