ACA Reporting Requirements: Annual Reminders

Who Must Report

Applicable Large Employers (ALEs) - those with 50 or more full-time equivalent employees in the prior year - must comply with ACA reporting requirements under Internal Revenue Code Sections 6055 and 6056.

Required Forms

Form 1095-C

Employers must furnish Form 1095-C to each full-time employee. This form reports:

• Whether minimum essential coverage was offered
• The employee's share of the lowest-cost monthly premium
• Months of coverage

Form 1094-C

This is the transmittal form filed with the IRS along with all 1095-C forms. It includes summary information about the employer and its coverage offerings.

Key Deadlines

• Employee copies: Must be furnished by March 1 (or the next business day)
• IRS filing (paper): Due by February 28
• IRS filing (electronic): Due by March 31 (electronic filing required for 250+ forms)

Common Compliance Issues

1. Incorrect employee counts: Misidentifying full-time status by not including all hours worked
2. Incorrect coding: Using wrong indicator codes on Line 14, 15, or 16
3. Missing employees: Failing to report on all full-time employees for every month
4. Late filings: Missing deadlines triggers penalties per form
5. Inconsistent data: Information on 1095-C not matching what was reported to employees or on other tax forms

Avoiding Penalties

• Start data collection and preparation early
• Verify employee hour records and full-time status determinations
• Review forms for accuracy before distribution and filing
• File electronically when possible to reduce errors
• Maintain copies of all forms and evidence of timely distribution

Penalties

Penalties for non-compliance can be significant:

• Failure to file correct information returns with the IRS
• Failure to furnish correct payee statements to employees
• Penalty amounts are adjusted annually for inflation

The IRS has shown willingness to enforce these penalties. Take reporting obligations seriously and allocate adequate resources to ensure compliance.