ACA & Health Benefits Compliance for Home Care Agencies in Texas

Exchange. Texas uses the federal marketplace, HealthCare.gov, with about 4 million enrollees - second only to Florida - so the 2026 expiration of enhanced premium tax credits hits Texas caregivers hard. Source ↗

Medicaid expansion. Texas has not expanded Medicaid and has the nation's largest coverage gap (non-disabled adults without dependent children generally cannot get Medicaid at any income). Caregivers at 100-400% FPL can claim premium tax credits, each a potential $5,010 4980H(b) trigger for non-offering ALE agencies; those under 100% FPL cannot. Source ↗

State continuation (9 months). Texas state continuation lets employees of insured groups keep coverage for up to 9 months if not COBRA-eligible, plus 6 additional months after COBRA exhaustion for COBRA-eligible employees. Source ↗

No state 1095, auto-IRA, or PFL. Texas has no state individual mandate or employer 1095 reporting, no auto-IRA mandate, and no paid family leave program - and state law preempts local predictive-scheduling and paid-leave ordinances. Source ↗

Employer strategy note. Because so many Texas caregivers earn 100-250% FPL, low-cost MEC plans priced within the $129.89/month FPL safe harbor or ICHRAs are common home care strategies to block both 4980H(a) and (b) penalties. Source ↗

ALE threshold & counting caregivers. The ACA employer mandate applies to Applicable Large Employers (ALEs) with 50+ full-time equivalent employees (30+ hrs/week or 130 hrs/month). Home care agencies with variable-hour caregivers can use the IRS look-back measurement method (3-12 month measurement period plus a stability period) to determine which caregivers must be treated as full-time and offered coverage. Source ↗

2026 employer mandate penalties. For 2026, the Section 4980H(a) penalty (no offer of minimum essential coverage to 95% of full-time staff) is $3,340 per full-time employee minus the first 30; the 4980H(b) penalty (coverage unaffordable or not minimum value) is $5,010 per full-time employee who gets subsidized exchange coverage (Rev. Proc. 2025-26). Source ↗

2026 affordability percentage. Coverage is affordable in 2026 if the employee's self-only contribution does not exceed 9.96% of household income (up from 9.02% in 2025), per Rev. Proc. 2025-25. Employers may use the W-2, rate-of-pay, or federal poverty line safe harbors in place of household income. Source ↗

2026 FPL safe harbor. A 2026 plan automatically satisfies the federal poverty line affordability safe harbor if the lowest-cost self-only contribution is no more than $129.89/month ($15,650 mainland FPL x 9.96% / 12). Alaska and Hawaii use higher FPL figures (about $162.26 and $149.31/month respectively). Source ↗

1095-C deadlines (2025 forms filed in 2026). ALEs must furnish Forms 1095-C to employees by March 2, 2026, or use the alternative method under the Paperwork Burden Reduction Act: post a clear website notice and furnish a copy within 30 days of request. E-filing of Forms 1094-C/1095-C with the IRS is due March 31, 2026, and e-filing is mandatory for employers filing 10 or more returns. Source ↗

ICHRA as a compliance option. An Individual Coverage HRA (ICHRA) lets agencies reimburse caregivers' individual-market premiums tax-free and counts as an offer of coverage under 4980H. An ICHRA is affordable if the employee's cost for the lowest-cost self-only silver plan, minus the HRA allowance, stays within the 9.96% affordability threshold; employee classes (e.g., field caregivers vs. office staff) can receive different allowances. Source ↗

Enhanced premium tax credits expired 12/31/2025. The ARPA/IRA enhanced premium tax credits expired December 31, 2025, restoring the 400% FPL subsidy cliff. KFF estimates average subsidized marketplace premium payments more than doubled (about +114%) for 2026, making employer-sponsored coverage and ICHRAs more attractive to caregivers - and increasing the chance that full-time employees seek subsidized exchange coverage that triggers 4980H penalties for non-offering agencies. Source ↗