The IRS has released Revenue Procedure 2026-22, which includes the employer shared responsibility mandate penalty amounts for calendar year 2027.
As background, under section 4980H of the Internal Revenue Code (IRC), certain large employers may incur penalties if they fail to offer health coverage to their full-time employees. In general, an applicable large employer is liable for an assessable payment if:
- The employer fails to offer to substantially all of its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage (MEC) under an eligible employer-sponsored plan, and a full-time employee is certified to receive a premium tax credit or cost-sharing reduction for health coverage purchased through the public exchange
- The employer offers its full-time employees (and their dependents) the opportunity to enroll in MEC under an eligible employer-sponsored plan that either is unaffordable or does not provide minimum value, for a full-time employee who has been certified for a premium tax credit or cost-sharing reduction for health coverage purchased through the public exchange
The annual assessable payment under section 4980H(a) is based on all full-time employees (except the first 30), while the annual assessable payment under section 4980H(b) is based on the number of full-time employees who purchase health coverage on a public exchange and are certified to receive a premium tax credit or cost-sharing reduction in connection with the exchange-based coverage.
The applicable per-employee annual dollar amounts of $2,000 under IRC section 4980H(a) and $3,000 under IRC section 4980H(b) are increased annually based on the premium adjustment percentage.
The 2027 penalty amounts are:
- $3,780 under IRC section 4980H(a) — up from $3,340 in 2026
- $5,670 under IRC section 4980H(b) — up from $5,010 in 2026
The guidance is effective for taxable and plan years beginning after December 31, 2026.