Overview of ACA Reporting Requirements:
As part of the Affordable Care Act (ACA), Applicable Large Employers (ALEs) are required to report the availability of minimum essential coverage (MEC) that provides minimum value to all full-time employees. ACA reporting for ALEs is done using IRS Forms 1094-C and 1095-C forms, while non-ALEs with a self-insured plan use Forms 1094-B and 1095-B. More recently, many small employers obtaining health insurance through a MEWA (multi-employer welfare association) have also been responsible for filing Forms 1094-C and 1095-C with the assistance of their insurance carrier.
Changes to the Electronic Filing Threshold for ACA Reporting:
The IRS has announced a significant change to the electronic filing requirements for ACA reporting obligations starting in 2024. Previously, employers could file their ACA reporting forms by paper if they filed fewer than 250 returns. However, beginning in 2024 (for 2023 forms), employers filing ten or more returns must electronically file their Forms 1094-C and 1095-C. This change eliminates the option to file by paper for most employers, which is how most employers in a MEWA were filing in prior years.
Engaging with an ACA Reporting Vendor:
Electronically filing ACA reporting forms requires technical expertise and the use of the IRS AIR system. Employers will need to engage with an ACA reporting vendor or a third-party provider that specializes in ACA reporting requirements to complete the filing on their behalf. ALEs and non-ALEs sponsoring a self-insured plan will need to ensure they have engaged with a vendor to meet the new filing requirements.
Electronic Filing Hardship Waivers:
The IRS allows for exceptions to the electronic filing requirements in cases of undue hardship. Employers can apply for an electronic filing hardship waiver by submitting IRS Form 8508. However, the waiver is valid only for the specific year and requires employers to provide cost estimates from third-party vendors to demonstrate financial hardship.
2024 ACA Filing Deadline:
For the filing deadlines in 2024, ACA reporting requirements dictate that ALEs must furnish Forms 1095-C to employees by March 2, 2024. The Form 1094-C, along with copies of the Form 1095-C, must be filed with the IRS by March 31, 2024 for electronic filing. Employers who are filing by paper, which is only allowed for those filing fewer than ten returns, must file by February 28, 2024. These deadlines apply to all ALEs regardless of their plan year.
The IRS's reporting requirements for filing ACA forms from 2024 onward will impact most employers. Engaging with an ACA reporting vendor is essential to meet the new filing requirements. Employers should be aware of potential penalties for failure to file electronically and ensure compliance with their specific ACA reporting obligations based on their size and funding arrangement.