ACA Compliance Checklist for Auto Dealerships in 2026
Running a dealership is already complex. Between sales, service, and staffing, ACA compliance might not always be top of mind. But in 2026, the rules have shifted, and dealerships with multiple rooftops or high turnover face real exposure if they are not prepared.
Here is a practical checklist to help auto dealers stay compliant and avoid costly penalties.
- Know the 2026 ACA Affordability Threshold
The IRS has set the ACA affordability percentage at 9.96% for 2026, up from 9.02% in 2025 and the highest it has ever been. This means the employee’s share of the premium for self-only coverage cannot exceed 9.96% of their household income. Review your plan contributions now to confirm they meet this threshold, and pay close attention to commission-heavy roles where variable pay can make affordability calculations more complex.
- Understand the Employer Mandate Rules
Applicable large employers, meaning those that averaged at least 50 full-time and full-time equivalent employees during the previous calendar year, must offer minimum essential coverage to at least 95% of full-time employees and ensure that coverage is affordable at the lowest-cost, employee-only level. Failing either requirement can trigger Employer Shared Responsibility Penalties (ESRPs).
- Track Full-Time Employees Accurately
Dealerships often struggle here because of variable schedules. Use the IRS look-back measurement method to track average hours for sales and service staff, and make sure all entities under common ownership are counted together. This is a common trap for multi-rooftop and PE-backed dealership groups.
- File the Right Forms On Time
In 2026, dealerships must continue filing two key forms:
- Form 1094-C (transmittal form)
- Form 1095-C (employee-level coverage reporting)
Late or inaccurate filings lead to steep fines, so make sure your data is clean and complete, especially for terminated employees.
- Do Not Overlook COBRA and State Mandates
ACA compliance does not exist in a vacuum. Ensure COBRA notices are delivered on time for terminated employees and stay current on state-specific requirements. Some states have individual mandate rules that carry employer implications as well.
- Document Everything
When the IRS asks for proof, you need records ready. At a minimum, keep the following organized and accessible:
- Payroll and benefits contribution data
- Plan documents, communications, and broker or carrier correspondence
- Employee elections and waivers
- Train Your HR and Management Staff
With high turnover at dealerships, HR teams get stretched thin quickly. Provide ACA compliance training for HR and benefits staff, and make sure managers understand how scheduling and classification decisions affect compliance status.
- Audit Your Compliance Annually
The best defense against penalties is a proactive audit. Benchmark your benefits against industry standards, review contribution structures before renewals, and use third-party support to ensure accuracy in reporting and documentation.
Why This Matters for Auto Dealerships
Auto dealerships face a distinct set of compliance challenges. Multiple rooftops under shared ownership, variable-hour and commission-based employees, and frequent turnover all create constant pressure on eligibility tracking and reporting accuracy. Without a system in place, it is easy to miss ACA requirements, and even small mistakes can add up to six-figure penalties.
How Parker Insurance Helps
At Parker Insurance, we work with dealerships across the country to simplify ACA compliance. From benchmarking contributions to preparing reporting, we keep your business compliant so you can focus on selling cars, not sorting through IRS notices.
Want to see where your dealership stands? Contact us today for an ACA compliance review.
