ACA Reporting-What Employers Need to Know for the 2024 Tax Year
For Applicable Large Employers (ALEs), ACA reporting is required annually to ensure compliance and avoid costly penalties. Here’s what you need to know for the 2024 tax season.
Who Needs to File?
If you averaged 50 or more full-time employees (including full-time equivalents) in 2023, you’re considered an ALE for 2024. ALEs are required to:
Offer Minimum Essential Coverage (MEC) to at least 95% of full-time employees and their dependents.
Ensure the coverage meets affordability and minimum value standards.
Important Deadlines
Mark your calendars with these critical ACA filing deadlines:
January 31, 2025: Deadline to provide Form 1095-C to employees.
March 31, 2025: Deadline to electronically file Forms 1094-C and 1095-C with the IRS (February 28, 2025, if filing by paper).
The Forms You’ll Need
Form 1095-C: This form is provided to full-time employees, detailing the health insurance coverage offered to them.
Form 1094-C: This transmittal form summarizes the information provided in the 1095-C forms and is submitted to the IRS.
Avoiding Penalties
Failing to comply with ACA requirements can result in significant penalties. For the 2024 tax year, penalties include:
Failure to Furnish 1095-C to Employees: Penalties of $310 per form not provided by the deadline.
Failure to File Forms with the IRS: Penalties of $310 per form, with a maximum annual penalty of $4,727,000 for large employers.
Intentional Disregard: Higher penalties may apply if non-compliance is deemed intentional, with no cap on the maximum penalty.
But don’t worry—proactive compliance can help you avoid these costly fines.
How to Stay ACA-Compliant
Track Employee Hours: Ensure accurate classification of full-time employees (30+ hours per week or 130+ hours per month).
Offer Coverage: Verify that your health plans meet MEC, affordability, and minimum value standards.
Maintain Records: Keep detailed documentation of employee classifications, coverage offers, and communications for at least three years.
Use Software Tools: Automate tracking and reporting to reduce errors.
Resources and Support
Navigating ACA compliance doesn’t have to be overwhelming. Here are some helpful resources:
IRS ACA Information Center: Visit here.
Compliance Check-Ups: We can connect you with trusted experts to review your filings and ensure accuracy.
SBIS Support Services: Our team is here to answer your questions and guide you, let’s connect.
By staying ahead of deadlines and leveraging the right tools and resources, you can approach ACA filing with confidence.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Employers should consult with qualified professionals or legal advisors regarding their specific circumstances and ACA compliance requirements. While we strive to provide accurate and up-to-date information, regulations and guidelines may change over time. SBIS is not responsible for any errors or omissions in this content.