The IRS has released Rev. Proc. 2025-26, which provides updates to the Affordable Care Act’s “pay or play” penalty amounts:

- The “A” penalty has been adjusted to $3,340. The “A” penalty is triggered when an Applicable Large Employer does not offer “substantially” all of its full-time employees Minimum Essential Coverage AND at least one employee receives a government subsidy to purchase health insurance on the individual exchange. This penalty is multiplied by the number of full-time employees an employer has (minus the first 30).

- The “B” penalty has been adjusted to $5,010. The “B” penalty is triggered when an Applicable Large Employer offers Minimum Essential Coverage to substantially all full-time employees, but that coverage is either unaffordable (exceeds 9.96% of employees’ wages) or does not provide a minimum value (60%), and one employee receives a subsidy in the Exchange. This penalty is multiplied by the number of employees who receive a subsidy to purchase health insurance on the individual exchange.

You can read the entire Rev. Proc. HERE.