2025 ACA Compliance Update for Brokers

What’s Changing, What to Watch For, and How to Help Your Clients Stay Ahead

As we head into the rest of 2025 and into 2026, the IRS is signaling a clear message to brokers and employers alike: ACA compliance is not optional—and enforcement is ramping up.

Whether you're supporting clients in staffing, food service, healthcare, or another high-turnover industry, it's more important than ever to ensure the benefits you recommend meet ACA standards. Here's what’s changing this year, and how you can stay ahead of costly penalties (and keep your clients happy).

1. Penalties Are Increasing Again

Each year, ACA employer mandate penalties are adjusted for inflation. For 2025, brokers should prepare clients for even steeper fines:

  • Part A Penalty (Failure to offer MEC to at least 95% of full-time employees):
    Projected to exceed $3,000 per employee annually

  • Part B Penalty (Coverage offered but not affordable or not of minimum value):
    Expected to surpass $4,500 per employee annually

Why it matters: Even small oversights—like missing an offer for a handful of full-time staff—can trigger six and seven-figure IRS letters.

2. 226J Letters Are Becoming More Common

The IRS is aggressively sending 226J letters—notices of employer shared responsibility payment (ESRP) assessments. These letters often cover prior tax years, but enforcement efforts are widening.

As a broker, you can help clients by:

  • Reviewing their ACA reporting history

  • Verifying whether MEC or MVP plans were in place for applicable years

  • Flagging any offer-of-coverage gaps or affordability errors

3. Affordability Threshold Has Dropped (Again)

For 2025, the IRS affordability threshold is expected to stay below 9% of household income (adjusted each year). This continues a downward trend from previous years.

If you're helping clients offer Minimum Value Plans (MVPs), now’s the time to re-check whether their premium contributions still qualify under IRS affordability rules using the:

  • W-2 Safe Harbor

  • Federal Poverty Line Safe Harbor

  • Rate of Pay Safe Harbor

If affordability is no longer achievable, a MEC plan may be a smarter compliance-first option.

4. Expect Stricter Data Audits and Reporting Requirements

The IRS is putting more pressure on employers to submit clean, complete, and timely 1094-C/1095-C forms. Data mismatches, incorrect FT status coding, or late submissions can trigger automatic ESRP assessments—even for compliant employers.

Pro tip for brokers: Ask clients how they’re handling ACA tracking. If they don’t have a process—or if they're managing it manually—you may want to bring in a partner (like EBA) who can help simplify compliance.

5. MEC Plans Remain a Safe and Strategic Option for Many Groups

For employers who:

  • Have hourly or part-time workers

  • Operate with thin margins

  • Need fast, compliant coverage

  • Want to avoid both fines and overextended budgets

👉 A Minimum Essential Coverage (MEC) plan can be the perfect fit.

At Essential Benefit Administrators, we offer plug-and-play MEC plans designed for quick implementation, full ACA compliance, and bilingual support. That means your clients can stay protected—without dealing with the complexity of traditional major medical.

🛡️ Need Help Navigating ACA in 2025?

We're here to help. If you’d like to review a client's compliance risk or explore whether MEC is a good fit, we’re happy to hop on a quick call.

Get in touch with our team today.

Ryan Brown