Feb 01, 2024
ACA Employer Reporting Summary
January 2024
Certain employers, plan sponsors, and insurers are required to report health plan information and participant coverage data to the IRS each year. The IRS uses this information to administer and regulate various aspects of the Affordable Care Act (ACA), including an individual’s eligibility for a premium tax credit when purchasing health insurance through a public Marketplace and the §4980H employer shared responsibility rules. Failure to report complete, accurate, timely information can result in significant reporting penalties up to $310/form.
Employer Reporting Responsibilities
Applicable Large Employers (ALEs) – All ALEs (generally those with at least 50 full-time equivalents (FTEs)) are required to comply with some portion of the reporting requirements. ALE status is determined by averaging FTEs for the previous calendar year. For example, if an employer averaged 50 or more FTEs during 2022 (alone or as part of a larger controlled group or affiliated service group), the employer is an ALE for 2023 and required to report offer of coverage information early in 2024 (for the 2023 calendar year). ALEs report offer of coverage information using Forms 1094-C and 1095-C. NOTE: Offer of coverage reporting on the “C” forms will never be handled by the carrier, but instead must be done by the employer.
Employers Offering Self-Funded (or Level-Funded) Group Health Plan Coverage – Any size employer who provided level-funded or self-funded coverage during 2023 must report coverage information for all individuals covered under the plan, including employees, non-employees (e.g., owners, retirees, COBRA participants), and their spouses and dependents. Small employers (<50 FTEs, non-ALEs) report this coverage information using Forms 1094-B and Form 1095-B. ALEs generally report this coverage information using the same “C” forms used for offer of coverage reporting; the coverage information is reported in Part III of the Form 1095-C.
Timing of Reporting
Employer reporting is required annually and is done early in the year for the previous calendar year. Reporting is always based on calendar year data (even for employers with a non-calendar year medical plan).
- Copies of Form 1095s to full-time employees and covered individuals - Due March 1, 2024
- Submission of Form 1094 and all Form 1095s to the IRS - Due April 1, 2024
Copies of 1095s to individuals can be provided by hand delivery, mail, or electronically if consent is obtained from the individual to receive the 1095 electronically. In addition, solely for the 1095-B, there is an option to simply post availability of the form upon request on the employer’s website if certain requirements are met.
For almost all employers, Form 1094 and all Form 1095s must be submitted to the IRS electronically.
Electronic Filing Requirements (New for 2023 Reporting)
Beginning with the 2023 reporting, employers who file 10 or more tax forms must file the returns electronically (previously only those filing 250 or more forms were required to file electronically). The count includes not only Form 1094 and Form 1095s, but also any other information tax returns the employer may file during the year (e.g., W-2s, 1099s), and therefore, almost all employers will be required to file the returns electronically. This is also true for any corrections that may need to be filed. Most employers do not directly file electronically with the IRS themselves; most use the services of a vendor or use payroll or reporting software that handles the electronic transmittal to the IRS on their behalf.
State Coverage Reporting
A handful of states (CA, MA, NJ and RI) and D.C. have individual coverage mandates requiring residents to have minimum essential coverage or to pay a state tax penalty. To enforce these mandates, these states require group health plans, both fully-insured and self-funded, to report coverage information to the states. Employers offering group health plans with covered individuals residing in these states may be required to send in reporting to the state tax department in addition to the coverage information submitted to the IRS.
Resources
IRS forms and instructions can be found on the IRS website.
Our Amwins Connect ACA Employer Reporting and State Individual Mandate Employer Reporting guides are available on our website.
Benefit Comply offers an Employer Reporting Review service that can assist your clients and prevent IRS penalties because of incorrect 1094/1095 forms.
While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.
