The Affordable Care Act (ACA) reporting requirements primarily apply to larger companies with 50 or more full-time equivalent (FTE) employees. However, some insurance carriers may require reporting regardless of size. As an Advanced Benefit Solutions client, it’s important to understand these requirements to ensure compliance and avoid penalties.
One significant update is the IRS’s new 10-Return Threshold: Starting in 2024, mandatory electronic filing (e-filing) is required for employers filing ten (10) or more returns of different types. This aggregate rule includes Forms W-2, 1099, 1094-B, 1094-C, 1095-B, and 1095-C.
Example:
- 6 W-2 employees
- 5 Medical Insurance Enrollees
- Total: 11 Forms (Employer must e-file)
What Is ACA Reporting?
If you’ve been offering benefits to your employees for any amount of time, you’re likely familiar with required ACA reporting and other required reporting. ACA reporting is the process by which employers verify that their offered health coverage meets government standards for affordability and minimum essential coverage (MEC).
Employers must submit specific forms to the IRS and provide copies to employees:
- Form 1095-C – Employers offering health coverage must report coverage details to employees and the IRS.
- Form 1095-B – Used by insurers and self-insured small businesses to report coverage.
Under the ACA, applicable large employers (ALEs) that offer Minimum Essential Coverage (MEC) must report specific information to both the IRS and covered employees.
Small Businesses & ACA Reporting
If your business has fewer than 50 employees, ACA reporting requirements vary based on the type of health coverage provided:
- Fully Insured (Under 50 Employees): The insurance carrier furnishes Form 1095-B to employees.
- Level-Funded (Under 50 Employees): If you offer medical insurance (level-funded/self-insured employer) The employer must furnish Form 1095-B to employees and file Form 1094-B with the IRS.
ACA Reporting Deadlines and Best Practices for Small Businesses
| Requirement | Deadline (Paper Filing) | Deadline (E-FIling) | Recipient Deadline |
|---|---|---|---|
| Forms 1095-C or 1095-B (Employee Copy) | N/A | N/A | March 1, 2025 |
| Forms 1094-C & 1095-C (IRS Submission) | February 28, 2024 | March 31, 2025 | N/A |
Note: If you have 250+ forms, you must e-file with the IRS. The aggregate rule includes Forms W-2, 1099, 1094-B, 1094-C, 1095-B, and 1095-C as part of the 10-return threshold. This is new as of 2024 for employers of all sizes.
Best Practices for ACA Compliance & Reporting
1. Determine If You Are an Applicable Large Employer (ALE)
- If you have 50 or more full-time equivalent (FTE) employees, you must comply with ACA employer mandate rules.
- Full-time employees = Work 30+ hours per week or 130+ hours per month.
- Use IRS FTE calculations to ensure accurate employee count.
2. Accurately Track Employee Hours & Benefits
- Maintain accurate records of hours worked, benefits offered, and employee classifications.
- Use payroll software or HR systems to automate tracking.
3. Choose the Right Forms & File Correctly
- Form 1095-C → Required for ALEs to report employee health coverage.
- Form 1094-C → Transmittal form summarizing 1095-C submissions.
- Form 1095-B → Used by self-insured small businesses.
4. Verify Coverage Affordability & Compliance
- The IRS defines “affordable” coverage as 9.02% or less of an employee’s household income for 2024.
- Coverage must meet Minimum Essential Coverage (MEC) and Minimum Value (MV) standards.
5. Avoid Costly Mistakes & Penalties
- Missing deadlines → Penalties start at $310 per form, up to $3.7M max.
- Incorrect or incomplete forms → Additional fines may apply.
- Failing to offer coverage as an ALE → Penalty A (no coverage) = $2,880 per employee (minus first 30 employees). Penalty B (unaffordable/inadequate coverage) = $4,320 per affected employee.
6. Utilize IRS Tools & Seek Professional Help
- IRS ACA Information Center provides updated compliance resources.
- Consider hiring a payroll provider, benefits consultant, or CPA for guidance.
How Advanced Benefit Solutions Helps with ACA Reporting
At Advanced Benefit Solutions, we simplify ACA reporting for small businesses. Our services help employers:
- Save time by automating compliance and filing processes.
- Ensure efficiency in meeting all reporting requirements.
- Stay compliant with constantly changing regulations.
What We Offer:
✅ Deadline Monitoring: We track all ACA reporting deadlines and remind our clients of upcoming actions.
✅ Reporting Assistance: We explain filing requirements and help prepare necessary forms.
✅ Regulatory Compliance Support: We keep our clients up to date with IRS changes to ensure full compliance.
✅ Guided Submission Process: We offer step-by-step guidance for electronic or paper filing.
Tracking and filing ACA reports can be overwhelming for business owners who are already managing daily operations. Keeping up with ever-changing IRS regulations, ensuring timely submissions, and avoiding costly penalties requires constant attention.
A dedicated benefits partner like Advanced Benefit Solutions takes the burden off employers by handling compliance, monitoring deadlines, and providing expert guidance. With our support, business owners can focus on growth while ensuring their ACA obligations are met efficiently and accurately.
Has managing your benefits been a headache? Is your current provider handling all aspects of compliance and reporting (not just payroll?) If you’re spending hours on paperwork instead of managing your business, let’s schedule a time to talk.
