IRS Announces Higher Fines for ACA Reporting Failures

10/24/22

Applicable Large Employers (ALEs) are required to file ACA informational reporting – Forms 1094-C and
1095-C – annually. In addition to penalties assessed for failing to offer affordable health care coverage to full
time employees, the IRS also penalizes employers for compliance failures related to the annual reporting
under Internal Revenue Code Sections 6721 and 6722. The current penalty is $260 per form under each
section, or $520 cumulatively.

Increased Penalties

The IRS has announced that employers that fail to file ACA Forms 1095 in 2024 (reporting for 2023) can be
subject to a $310 penalty per form. The updated penalty for failure to provide individual statements to
employees also will increase to $310 per statement. Since the penalties are cumulative, an employer that
fails to provide an employee statement and fails to file with the IRS can be penalized up to $620 for each
required form.

As we have noted previously, the IRS continues to be less lenient with late ACA report filers. As fines
continue to increase, employers with filing obligations should take great care to ensure that their reporting
processes ensure timely filing and timely distribution of individual statements.

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constant challenge. Well-versed in both federal and state legislation as well as the changes brought about by
the Affordable Care Act, our expert advisors have a deep knowledge of employee benefits and a detailed
understanding of healthcare laws, regulations, and standards.

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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.