Is Your Company Ready for 2024 ACA Tax Reporting?

ACA Forms 1095-C and 1095-B Deadlines for 2024 are Coming Quickly

Employer deadlines for IRS 2024 Affordable Care Act (ACA) reporting are just around the corner and it’s time to start preparing. Although the IRS reporting regulations remain unchanged for 2024, the risk of penalties and IRS audits are higher than ever. The IRS continues to require Applicable Large Employers (ALE) and companies providing self-insured health coverage to report company-provided health insurance. Companies neglecting their reporting or failing to offer adequate or affordable coverage may face steep penalties, so staying compliant is crucial.

Does My Company Need to File?

If your company has 50 or more full-time equivalent employees (FTEE), it is considered an ALE and will need to file Forms 1094-C and 1095-C. Companies that are part of a controlled group need to look at all entities together for their ALE count.  Companies that are not an ALE but have a self-insured health plan must report coverage details on Forms 1094-B and 1095-B.

Companies often misunderstand the IRS threshold requirements for ACA filing requirements because the IRS uses 120 hours a month when looking at the equivalency testing, not 130 hours. Additionally, some companies anticipate their insurance carriers are filing their forms for them. Insurance companies have their own filing requirement for fully insured plans and typically do not assist ALEs with the 1094/1095-C forms. If you are unsure if your company has an ACA reporting responsibility, talk to a trusted tax advisor to better understand what your company needs to do.

Don't Wait Until the Last Minute!

Starting your preparations early can save you a lot of stress and ensure you don’t miss any critical deadlines:

• Employee Furnishing Deadline: March 3, 2025
• Paper Filing Deadline to the IRS: February 28, 2025
• E-Filing Deadline to the IRS: March 31, 2025

The employee furnishing deadline cannot be extended. Penalties can add up quickly so it is advisable to have all forms reviewed by an accountant or attorney who specializes in the ACA.

Significantly Lowered E-filing Threshold is the New Normal

Just like in 2023, organizations filing for 2024 with 10 or more ACA forms must file electronically with the IRS (prior to 2023 the threshold was 250 or more forms). Remember that not only Forms 1095-C and 1095-B are included in the count, but Form 1099 series, Forms W-2, and others, too. Because the e-filing process can be time consuming and complicated, companies should seek help sooner rather than later. Even if your company has a small number of forms, it’s important to confirm now to avoid unnecessary delays, missed deadlines, and penalties.  

Changes Coming for 2025

Last month President Biden signed into law two bills that will impact companies starting with 2024 forms. Both changes are aimed at easing employers’ ACA tax compliance burdens.

The first law, HR 3797, allows employers to furnish forms only to individuals who request them provided the employer provides “clear, conspicuous and accessible notice” on how individuals can request their form. Once requested the business must send the individual their form by the later of January 31^st of the year following the calendar year the form is for or 30 days after the request. Details on what constitutes sufficient notice is expected to be provided by the IRS soon. This is effective for calendar years after 2023. It is important to note that this will not change the federal filing requirements with the IRS or any state filing requirements.

The second law, HR 3801, created additional changes related to ACA reporting, which are designed to help companies facing IRS ACA penalties and various reporting challenges.  Under HR 3801:

• Employers with an employer shared responsibility penalty notice will now have 90 days to respond instead of the previous 30 days given.
• On forms due after December 31, 2024, there will be a new 6-year statute of limitations; previously there was no statute of limitations on the ACA forms. It’s important to note that this new statute of limitations is not in effect for forms due prior to January 1, 2025.
• Applicable Large Employers can now use a spouse’s or dependent’s birthdate in Part III of the Form 1095-C if they are unable to locate the individual’s correct SSN. This is effective for forms filed after December 31, 2024.
• The law also officially codifies a previous regulation that allowed ALEs to provide ACA forms to employees electronically provided employees grant consent. This is effective for forms filed after December 31, 2024.

Contact Us

Contact Tonya Rule (trule@eidebailly.com), Eide Bailly’s ACA Practice Leader, if you have questions.