Are You Ready for ACA Informational Reporting?

3-Minute Read

It’s that time of year again – Applicable Large Employers (ALEs), and small employers with self-insured plans, will soon be required to provide full time employees with Form 1095-C, and the IRS with Form 1094-C. For calendar year 2024, Forms 1094-C and 1095-C are due March 3, 2025 (if filing electronically, 1094-C is due March 31, 2025 to the IRS).

An Applicable Large Employer (ALE) is one that had an average of 50 or more full time employees in the preceding calendar year. Hours of service of full time equivalent (e.g. part time employees) are also considered for determining ALE status. Companies with multiple business units connected through common ownership must combine employee totals due to IRS controlled group rules. You can use this resource to help you determine if you qualify as an ALE.

Who is Required to File 

2024 versions of Forms 1094-C and 1095-C are currently available from the IRS and can be downloaded from the IRS website here: https://www.irs.gov/forms-instructions

Increased IRS Enforcement and Penalties 

In addition to the penalty scheme for employers subject to the pay-or-play employer mandate, there are additional penalties assessed for failure to file required returns with the IRS, and separately for failure to furnish forms to employees.

The IRS also reminded large employers in 2020 that there is no statute of limitations for the assessment of ACA penalties.

The Time to Be Prepared is Now 

Here are a few steps to take to be fully prepared for ACA reporting come March: 

1. Be prepared to prove that you offered coverage to at least 95% of your FT employees in each calendar month of the year. 
2. Be able to prove that your offer of coverage was affordable to each FT employee by one of the three (3) available affordability safe harbors. 
3. Study the Form 1095-C coding requirements to self-audit for any errors. 
4. Familiarize yourself with any special 1095-C coding conditions, such as union employees. 
5. If using technology to prepare and transmit ACA reporting, check to ensure that all HR facts are correctly inputted into the system. 
6. Audit all ACA reporting produced by technology platforms and payroll providers for accuracy before transmission to the IRS and mailing to employees. 

ACA Training with Morris & Garritano

Join us in January for our ACA Reporting 101 Webinar where we’ll cover:

• Review of Forms 1094-C and 1095-C
• Detailed coding and self-auditing process
• Q&A session

Registration will open soon with additional communications on how to sign up to attend.

This information is general and is provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.