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Employers subject to the Affordable Care Act (ACA) should already be preparing for ACA reporting deadlines for the 2025 reporting year. Each year, organizations must prepare and file forms with the IRS to demonstrate compliance. Missing deadlines or filing incorrectly can result in costly penalties, so planning ahead is essential.
What is ACA compliance?
ACA compliance refers to the responsibility of certain employers to offer health coverage that meets minimum standards and to report on that coverage to the IRS.
This applies primarily to Applicable Large Employers (ALEs), or organizations with 50 or more full-time equivalent (FTE) employees. ALEs must:
• Offer affordable, minimum essential coverage to at least 95% of full-time employees and their dependents.
• File annual reports with the IRS to verify compliance.
ACA reporting deadlines for the 2025 reporting year
The IRS requires ALEs to file forms by specific deadlines each year. For the 2025 reporting year, employers must:
• February 28, 2026: Submit forms if filing on paper.
• March 31, 2026: Submit forms if filing electronically.
Employers are required to file Form 1094-C (transmittal form) and provide Form 1095-C (employee statements) for each full-time employee. Electronic filing is required for most organizations unless they qualify for a paper filing exception.
2026 ACA compliance changes and updates
A few important considerations for the 2025 reporting year include:
• 95% rule (“substantially all” requirement): ALEs must continue to offer coverage to at least 95% of full-time employees to avoid penalties.
• Affordability threshold adjustments: The IRS updates the affordability percentage annually. Employers should verify the official rate once published to ensure the coverage offered meets affordability standards.
Compliance threshold for the 2025 reporting year
The ACA defines an Applicable Large Employer as one with 50 or more full-time-equivalent employees. A full-time employee is generally one who works at least 30 hours per week.
To comply with ACA rules, ALEs must:
• Offer coverage to at least 95% of full-time employees and their dependents.
• Ensure coverage is both affordable and provides minimum value.
ACA penalties for the 2025 reporting year
Employers that fail to meet the requirements of ACA compliance face significant penalties.
Penalty A – failure to offer coverage
If an Applicable Large Employer (ALE) fails to offer coverage to at least 95% of its full-time employees, and at least one employee receives subsidized coverage through the Health Insurance Marketplace, the IRS may impose Penalty A.
Penalty B – failure to provide affordable, minimum value coverage
If coverage is offered but is unaffordable or does not meet minimum value, and an employee receives subsidized Marketplace coverage, the IRS may impose Penalty B.
What determines affordability?
For ACA reporting deadlines in the 2025 reporting year, affordability remains a key factor. The IRS sets an annual affordability percentage that determines whether coverage is considered affordable. Employers should confirm the official percentage for this reporting year once it is released.
To assess affordability, employers may rely on IRS safe harbors, including:
• W-2 wages
• Rate of pay
• Federal poverty line
These safe harbors provide employers with practical methods for measuring whether the coverage they offer is affordable under ACA rules.
Final takeaway
With the ACA reporting deadlines for the 2025 reporting year set for February 28, 2026 (paper filing) and March 31, 2026 (electronic filing), employers must ensure they are prepared. Failure to comply can result in significant IRS penalties.
Proactive planning, accurate tracking of employee eligibility, and timely filing will help employers stay compliant with ACA requirements.
And if you need help with reporting requirements for the 2025 reporting year, ebm has you covered. From form generation and validation to eFiling and more, our standalone reporting solution eases the burden on HR. Learn more today.
The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter. The reader should not act or refrain from acting on the basis of any content included in this article without seeking tax, legal, or other professional advice. The contents of this article contain general information and may not reflect current legal developments or address the reader’s situation. ebm disclaims all liability for actions the reader takes or fails to take based on any content within this article.
