ACA Compliance Checklist for Auto Dealerships

Running a dealership is already complex. Between sales, service, and staffing, compliance with the Affordable Care Act (ACA) might not always be top of mind, but ignoring it can cost you. In 2026, the ACA affordability threshold is shifting again, and dealerships with multiple rooftops or high turnover face even higher risk of penalties.

Here’s a practical checklist to help auto dealers stay compliant and avoid surprises.

1. Know the 2026 ACA Affordability Threshold

For 2026, employer-sponsored health coverage must be considered “affordable” if the employee’s share of the premium for self-only coverage doesn’t exceed 9.96% of household income.

  • Review your plan contributions now to confirm they meet this threshold.
  • Watch out for dealerships with varying pay structures. Commission-heavy roles can make affordability harder to calculate.

2. Understand the Employer Mandate Rules

If your dealership (or dealership group) has 50 or more full-time equivalent employees, you must:

  • Offer health insurance to at least 95% of full-time employees.
  • Provide coverage that is both affordable and meets minimum value standards. Failing either requirement can trigger Employer Shared Responsibility Penalties (ESRPs).

3. 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.
  • Count all entities under common ownership together (a common trap for multi-rooftop and PE-backed dealerships).

4. File the Right Forms—On Time

In 2026, dealerships must continue filing:

  • Form 1094-C (transmittal form)
  • Form 1095-C (employee-level coverage reporting)

Late or inaccurate filings lead to steep fines. Make sure data is clean, especially for terminated employees.

5. Don’t Forget COBRA and State Mandates

ACA compliance doesn’t exist in a vacuum.

  • Ensure COBRA notices are delivered on time for terminated employees.
  • Stay updated on state-specific requirements. Some states have their own individual mandate rules that apply to employers, too.

6. Document Everything

When the IRS asks, “Prove it,” you need records.

  • Keep payroll and benefits contribution data organized.
  • Save plan documents, communications, and broker or carrier correspondence.
  • Document employee elections and waivers.

7. Train Your HR and Management Staff

With high turnover at dealerships, HR teams often get stretched thin.

  • Provide ACA compliance training for HR and benefits staff.
  • Make sure managers understand how scheduling and classification decisions affect compliance.

8. Audit Your Compliance Annually

The best defense against penalties is a proactive audit.

  • Benchmark your benefits against industry standards.
  • Review contribution structures before renewals.
  • Use third-party support to ensure accuracy in reporting and documentation.

Why This Matters for Dealerships

Auto dealerships face unique compliance challenges:

  • Multiple rooftops under shared ownership
  • Variable-hour and commission-based employees
  • Frequent turnover requiring constant updates

Without a system, it’s easy to miss ACA rules, 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.