As employers continue to field questions about rising ACA Marketplace premiums, there is a new development worth watching closely. On January 8, 2026, a bill was introduced in Congress aimed at addressing the expiration of enhanced ACA subsidies. If the House and Senate agree and pass this legislation, it could significantly change the landscape for individuals enrolled in Marketplace coverage.

While details are still emerging, here’s what employers should know—and why this remains an evolving situation.

A Brief Look Back: ACA Subsidies Before and After 2021

Prior to 2021, ACA premium subsidies were available only to individuals with household incomes between 100% and 400% of the federal poverty level (FPL). Many individuals above that threshold paid the full cost of Marketplace coverage, which often made premiums feel unaffordable.

The American Rescue Plan Act (ARPA), passed in 2021, temporarily expanded these subsidies by:

• Increasing subsidy amounts for those already eligible

• Extended eligibility beyond the 400% FPL cap

• Capping the percentage of income individuals would pay toward Marketplace premiums

When those enhanced subsidies expired, many individuals saw significant premium increases or lost eligibility for assistance altogether.

What the Newly Introduced Bill Could Change

If Congress passes the bill introduced on January 8, 2026, enhanced ACA subsidies could be reinstated or modified in a way that reduces premium costs for individuals enrolled in Marketplace plans.

While the intent of the bill is to improve affordability, the final impact will depend on how the legislation is passed and implemented. Until the law is finalized and guidance is issued, many key questions remain unanswered.

Key Unknowns Employers Should Be Aware Of

Even if the bill passes, there are several areas of uncertainty that employers and employees should keep in mind, including:

• Timing: When would subsidy changes take effect, and would they approve retroactively?

• Eligibility Rules: Will subsidy income thresholds mirror prior ARPA rules, or will new limits be introduced?

• Duration: Are the subsidies temporary again, or intended to be extended longer-term?

• Employee Action Required: Will current Marketplace enrollees need to reapply or update their information to access enhanced subsidies?

• Interaction With Employer Coverage: Will any guidance be issued affecting affordability determinations or employer reporting obligations?

Until regulatory agencies release formal guidance, these questions remain open.

What This Means for Employers Right Now

Until regulatory agencies release formal guidance, these questions remain open.

At this stage, employers are not requires to take any immediate action. However, proactive communication can help manage employee expectations:

• Reinforce that Marketplace premium increases alone are not a qualifying life event for employer plan enrollment

• Acknowledge that legislative changes may be forthcoming, but details are still evolving

• Encourage employees enrolled in individual coverage to stay informed and monitor official Marketplace communications

Employers should avoid making assumptions or promises until legislation is finalized and guidance is issued.

Our Team Is Monitoring Developments Closely

We understand that uncertainty around ACA subsidies can create confusion for both employers and employees. Our team is actively tracking this legislation and related regulatory guidance. As more information becomes available, we will provide timely updates and practical insights to help employers navigate the changes.

If you have questions or would like to discuss how potential ACA subsidy changes could impact your workforce, please reach out to our team. We're here to help you stay informed and prepared.

Justine Dickens

EMPLOYEE BENEFITS ADVISOR

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Understanding Full-Time Equivalents (FTEs) Under the Affordable Care Act (ACA): A Guide for Employers

What is a Full-Time Equivalent (FTE)?

A Full-Time Equivalent (FTE) is a unit of measurement that represents the workload of an employee in a way that makes workloads comparable across various employment structures.

Who Needs to Calculate FTEs?

Employers across various industries use FTE calculations for multiple purposes. The purpose focus here today is companies subject to the Affordable Care Act (ACA): To determine if they qualify as an applicable large employer (ALE), requiring them to offer health insurance to full-time employees.

FTEs and the Affordable Care Act (ACA)

Under the ACA, employers must determine if they qualify as an Applicable Large Employer (ALE). This includes assessing common ownership across multiple employers. An ALE is an employer with an average of 50 or more FTEs in the previous calendar year. ALEs are required to offer affordable health coverage to full-time employees or face potential penalties.

How Does the ACA Define Full-Time and FTE Employees?

• Full-time employee: Works at least 30 hours per week or 130 hours per month.

• Part-time employee: Their hours are combined to determine the number of FTEs.

How to Calculate FTEs for ACA Compliance

To calculate FTEs for ACA compliance, follow these steps:

Step 1. Define Full-Time Hours: The ACA defines full-time employees as those working at least 30 hours per week or 130 hours per month.

Step 2. Identify Employee Hours Worked: Collect the total number of hours worked by all employees, including full-time, part-time, and seasonal employees.

Step 3. Apply the ACA FTE formula: FTE is calculated as FTE= Total Hours worked by part time employes divided by 30; plus total number of full time employees.

FTE Calculation Template

Final Thoughts

Calculating FTEs is crucial for determining ALE status under the ACA. If your company has 50 or more FTEs, you must comply with ACA employer mandate rules to provide health insurance coverage. Keeping accurate FTE records ensures compliance and helps avoid penalties.

Would you like help setting up an FTE calculator for ACA compliance? Contact your Rose Street Advisors Team today! If you are not a current client of Rose Street Advisors, please feel free to contact us at 269-552-3200 or contact@rosestreetadvisors.com to speak to someone.

Justine Dickens

EMPLOYEE BENEFITS ADVISOR

When she is not working, Justine is busy running her son and daughter to their practices and games and volunteering in the community. She enjoys playing golf, hiking and spending time with her family and friends.

Understanding the Affordable Care Act: What Employers Need to Know when Moving Above or Below 50 FTEs

The Affordable Care Act (ACA) has specific regulations that impact employers based on the size of their workforce. One of the most critical thresholds is 50 full-time equivalent (FTE) employees. Crossing this line, whether moving above or below, triggers changes in employer obligations, particularly concerning health coverage requirements, reporting duties, and compliance with additional labor laws such as the Family and Medical Leave Act (FMLA). Employers need to be proactive in understanding these obligations to avoid penalties and ensure compliance.

Understanding the 50 FTE Threshold

The ACA distinguishes between small and large employers based on whether they have 50 or more FTEs. Here's what employers should consider:

Employers with Fewer Than 50 FTEs

To qualify for an HSA, you must:

• Not Subject to the Employer Mandate: Businesses with fewer than 50 FTEs are not required to provide health insurance to their employees.

• Mental Level Tiers: Coverage is offered in canned plans rated from Platinum to Bronze.

• Pediatric Dental & Pediatric Vision: These employers are subject to specific plan details for Pediatric members and their dental and vision services.

• Exemption from ACA Reporting Requirements: Unlike larger employers, small businesses do not need to comply with the ACA’s employer mandate reporting requirements.

Employers with 50 or More FTEs

• Subject to the Employer Mandate: Large employers must offer health insurance to at least 95% of their full-time employees (and their dependents) that meets minimum value and affordability standards.

• Reporting Requirements: Employers must file Forms 1094-C and 1095-C with the IRS to report coverage information. Generally, Forms 1094-C and 1095-C must be filed by February 28^th if filing on paper (or March 31^st if filing electronically).

• Potential Penalties: Failure to offer coverage or providing coverage that does not meet affordability standards can result in significant penalties under the Employer Shared Responsibility Provisions (ESRP).

Impact on the Family and Medical Leave Act (FMLA)

• Applicability: The FMLA applies to employers with 50 or more employees within a 75-mile radius.

• Employee Eligibility: Employees must have worked at least 1,250 hours over the past 12 months.

• Requirement: Employers must provide up to 12 weeks of unpaid, job-protected leave for qualified medical and family reasons.

Steps for Employers Moving Above or Below 50 FTEs

1. Monitor Workforce Size: Use the ACA’s FTE calculation to determine whether your business is approaching the 50-employee threshold. This includes assessing Common Ownership rules.

2. Plan for Compliance: If expanding above 50 FTEs, prepare for employer mandate requirements, reporting obligations, and possible FMLA coverage.

3. Assess Health Plan Offerings: Ensure any provided insurance includes the 10 essential health benefits and meets affordability standards.

4. Stay Updated on ACA Changes: Regulations evolve, and staying informed helps avoid penalties and ensure legal compliance.

5. Consult Experts: Work with HR professionals, legal advisors, and benefits consultants to navigate ACA compliance effectively.

Conclusion

Crossing the 50 FTE threshold under the ACA is a critical transition for employers. Whether moving above or below this benchmark, businesses must understand their obligations related to health insurance, reporting requirements, and employee benefits. Staying proactive in compliance efforts can help employers avoid costly penalties while providing quality benefits to their workforce. For businesses approaching this threshold, now is the time to review policies, consult experts, and develop a strategic plan to ensure a smooth transition under ACA regulations. Contact your Rose Street Advisors team if you have additional questions. If you are not a current client of Rose Street Advisors, please feel free to contact us at 269-552-3200 or contact@rosestreetadvisors.com to speak to someone.

Justine Dickens

EMPLOYEE BENEFITS ADVISOR

Understanding PCORI Fees: What They Are and Who is Required to Pay Them

The Patient-Centered Outcomes Research Institute (PCORI) fee is a federal fee established under the Affordable Care Act (ACA) to fund research that helps patients, healthcare providers, and policymakers make informed healthcare decisions. If you are an employer or plan sponsor offering health coverage, it’s important to understand if you are responsible for paying the PCORI fee, how to calculate it, and when it is due.

Who is Required to Pay the PCORI Fee?

The obligation to pay the PCORI fee depends on the type of health plan offered:

• Self-Insured Health Plans: Employers that provide self-funded health coverage, including major medical plans, retiree-only plans, and standalone Health Reimbursement Arrangements (HRAs), are responsible for paying the PCORI fee based on the number of covered lives.

• Fully Insured Health Plans: Employers offering fully insured health coverage do not pay the PCORI fee directly. Instead, the insurance carrier is responsible for calculating and paying the fee on their behalf.

•Health Reimbursement Arrangements (HRAs) and Flexible Spending Arrangements (FSAs): If the HRA is not integrated with a fully insured medical plan, the employer must pay the PCORI fee. Most stand-alone FSAs, however, are generally exempt.

If you are unsure whether your plan requires you to pay the fee, it’s recommended to consult with a tax professional or benefits advisor.

When is the PCORI Fee due?

The PCORI fee is due annually on July 31st of the year following the end of your plan year. For example:

• If your plan year ended on December 31, 2024, your PCORI fee payment will be due by July 31, 2025.

Employers or plan sponsors must file IRS Form 720 (Quarterly Federal Excise Tax Return) to report and submit the fee. Although Form 720 is generally filed quarterly for other excise taxes, the PCORI fee is reported and paid once per year.

How is the PCORI Fee Calculated

The PCORI fee is calculated based on the number of covered lives under your plan, including employees, spouses, dependents, and other individuals receiving coverage. The IRS adjusts the fee amount annually to account for inflation. Employers must use the IRS's prescribed methods to calculate the average number of covered lives and apply the current fee rate per covered life.

Key Takeaways

• The PCORI fee helps fund research to improve healthcare decision-making.

• Employers with self-insured health plans or standalone HRAs are generally responsible for calculating and paying the fee.

• For fully insured plans, the insurance carrier handles the payment.

• The fee must be reported and paid using IRS Form 720 by July 31st each year.

• The fee amount is adjusted annually by the IRS.

Need assistance with your PCORI Fee?

Understanding and complying with the PCORI fee requirements is essential to avoid penalties and ensure smooth plan administration. If you have questions about whether your health plan is subject to the fee, how to calculate it, or how to file Form 720, we recommend speaking with Rose Street Advisors, our team is happy to assist you. If you’re not yet a client but need guidance, please don’t hesitate to contact us — we’re here to help ensure your plan remains compliant and well-managed.

Justine Dickens

EMPLOYEE BENEFITS ADVISOR

PCORI Fees - What are They and When Do I Pay Them?

One of the many requirements in the Affordable Care Act (ACA) is the Patient-Centered Outcomes Research Institute (PCORI) fee, an often overlooked but essential aspect of compliance. The PCORI fee is a charge imposed on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans. It was established to fund the Patient-Centered Outcomes Research Institute, an organization tasked with improving the quality and relevance of evidence available to help patients, caregivers, and healthcare providers make informed health decisions.

Who Needs to Pay the PCORI Fee?

The fee applies to: • Health Insurance Providers: Issuers of specified, fully insured health insurance policies. For fully insured health plans, the insurance carrier pays the PCORI fee on your behalf. No action is required of the employer. • Self-Insured Plan Sponsors: Employers or plan sponsors of applicable self-insured health plans, including Health Reimbursement Arrangements (HRAs). The employer is responsible for the PCORI fee for self-insured health plans and HRAs.

How Much is The PCORI Fee?

The PCORI fee amount is adjusted annually and is based on the average number of lives covered under the policy or plan. As of the most recent update, the fee is: • $3.00 per covered life for plan years ending on or after October 1, 2022, and before October 1, 2023. • $3.22 per covered life for plan years ending on or after October 1, 2023, and before October 1, 2024. The fee increases slightly each year based on the projected increases in national health expenditures.

Calculating the PCORI Fee

Calculating the PCORI fee involves determining the average number of lives (employee, spouse and dependents) covered under the policy or plan during the plan year. Please note that for HRA plans, an employer pays the PCORI fee only on the number of participating employees, not including covered spouses and dependents. There are several methods for this calculation: 1. Actual Count Method: Count the total number of covered lives for each day of the plan year and divide by the number of days in the year. 2. Snapshot Method: Add the total number of lives covered on one date (or more dates, if using the "more dates" variation) in each quarter of the plan year and divide by the number of dates used. 3. Form 5500 Method: Use the participant counts reported on the Form 5500 for the plan year, if filed. Plan sponsors can choose the method that best fits their reporting capabilities, but they must use the same method consistently within a given plan year.

Reporting and Payment

To report and pay the PCORI fee, issuers and plan sponsors must file Form 720 (Quarterly Federal Excise Tax Return) annually, by July 31 of the year following the last day of the plan year. The fee is reported in Part II of the form under "Patient-Centered Outcomes Research Fee". The latest version of Form 720 can be found here: https://www.irs.gov/pub/irs-pdf/f720.pdf (see Part II, IRS No. 133). Ensuring compliance with PCORI fee requirements is critical to avoid penalties. Failure to pay the fee or report it accurately can result in interest and penalties imposed by the IRS. For more detailed information, refer to the IRS instructions for Form 720 or reach out to your Rose Street Advisors team for assistance.

Alicia Ball

STRATEGIC OPERATIONS ADVISOR

As Strategic Operations Advisor, Alicia has the opportunity to lead the Employee Benefits Department every day. The focus of her role is to ensure the Department is operating at maximum efficiency, which allows us to ensure that our client’s needs and expectations are consistently exceeded. She accomplishes this efficiency through her strong communication, ability to maximize resources and staying true to Rose Street’s core values. Alicia’s tenure with Rose Street began in 2016 as our Maxwell Health Champion. She then spent time as a Employee Benefit Advisor where she built long lasting relationships with her clients that remain in place today even with her role change. In her spare time, Alicia tries to keep up with her very busy son, volunteers as a Big Sister for the Big Brother, Big Sister organization, and makes sure to spend as much time outside as she possibly can.

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employer Guide: navigating aca compliance as an applicable large employer

In today’s dynamic employment landscape, staying compliant with healthcare regulations is crucial for employers. The Affordable Care Act (ACA), signed into law in 2010, brought significant changes to the healthcare system, including requirements for employers to offer health insurance to eligible employees. As an Applicable Large Employer (ALE) under the ACA certain responsibilities and compliance requirements now apply to your organization. Here’s what you need to know and steps you can take to navigator ACA compliance effectively: Understanding ALE Status 1. Definition of ALE: An ALE is an employer with 50 or more full-time equivalent employees (FTEs) during the previous calendar year. Full-time employees are those who work, on average, at least 30 hours per week or 130 hours per month. 2. Determining FTE Count: Calculate your FTE count by combining the total hours worked by all employees (including part-time employees) in a month and dividing by 120. This will help determine if you meet the threshold for ALE status. ACA Compliance Steps for ALEs: 1. Offering Minimum Essential Coverage (MEC): • ALEs must offer Minimum Essential Coverage to at least 95% of full-time employees and their dependents to avoid potential penalties. • The coverage offered must meet affordability and minimum value standards set by the ACA. 2. Employer Shared Responsibility (ESR) Provision: • Ensure compliance with the ESR provision, also known as the “employer mandate”, which requires ALEs to offer affordable health insurance that provides minimum value to eligible employees. • Track and monitor employee hours to determine full-time status and eligibility for coverage. 3. Reporting Requirements: • File Forms 1094-C and 1085-C annually with the IRS. • These forms provide detailed information about the health insurance coverage offered to full-time employees and are used to assess compliance with the ACA employer mandate. • Stay up to date about ACA Reporting deadlines. Typically, these occur early in the years (i.e. January 31^st for distributing Form 1095-C to employees and February 28^th/March 31^st for filing forms with the IRS) Tips for Ensuring ACA Compliance: 1. Consult With Experts: Consider seeking guidance from your RSA Team and/or legal advisors to ensure accurate interpretation and implementation of ACA regulations. 2. Invest in HR Technology: Implement robust HR and payroll systems that can accurately track employee hours, manage benefits enrollment, and generate required ACA reports. • IMPORTANT - Don't forget to ask your RSA Team how Employee Navigator can help you. 3. Educate Employees: Provide clear and transparent communication to employees about their health insurance options, enrollment process, and rights under the ACA. 4. Stay Updated: Regularly monitor updates and changes to the ACA regulations issued by the IRS and other governing bodies to stay compliant with evolving requirements. Becoming an ALE signifies growth and success for your organization but also brings added responsibilities in terms of ACA compliance. By understanding your obligations, taking proactive steps, and leveraging available resources, you can navigate ACA compliance effectively while supporting the well-being of your workforce. If you have any questions or need further assistance with ACA compliance, please contact your Relationship Manager to discuss your needs in greater detail. If your are not a current client of Rose Street Advisors, please feel free to contact us at 269-552-3200 or contact@rosestreetadvisors.com to speak with someone.

Justine Dickens

EMPLOYEE BENEFITS ADVISOR

Justine is a devoted and meticulous team member with a passion to educate and support business partners and their employees. Since 2013, Justine’s commitment to her clients has allowed her to instill confidence and stability in the benefits packages offered to their employees. Her strengths allow her to communicate efficiently, focus on customization and understand the complexities of an ever changing industry. She is a Dale Carnegie Graduate and has her NAHU Self-Funded Certification. When she is not working, Justine is busy running her son and daughter to their practices and games and volunteering in the community. She enjoys playing golf, hiking and spending time with her family and friends.

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