The Affordable Care Act (ACA) has significantly reshaped the landscape of employer-sponsored health insurance since its enactment. Therefore, ensuring compliance with ACA regulations is crucial for avoiding significant penalties and maintaining operational efficiency. In this post, we provide a comprehensive overview of ACA reporting requirements and deadlines for 2025, including key deadlines, adjusted penalties, and best practices for staying compliant.
ACA reporting overview
Definition and purpose of the ACA
The ACA, enacted in 2010, aims to increase access to affordable health insurance, improve the quality of care, and reduce healthcare costs. Notably, one of its key provisions requires employers to report health coverage information to the IRS. This reporting is essential for verifying compliance with the employer mandate and ensuring that employees receive the benefits they are entitled to.
Impact of ACA on employers, particularly Applicable Large Employers (ALEs)
For Applicable Large Employers (ALEs)—those with 50 or more full-time-equivalent employees—compliance with specific ACA reporting requirements is mandatory. These regulations are designed to confirm that ALEs offer health insurance coverage meeting the ACA’s minimum essential coverage standards. Consequently, failure to comply can result in substantial penalties.
Key aspects of ACA reporting, including the employer mandate
The employer mandate requires ALEs to offer health insurance to full-time employees or face potential penalties. As a result, ACA reporting involves submitting Forms 1095-C and 1094-C to the IRS and distributing Form 1095-C to employees. These forms provide critical information about the health coverage offered and the employees who received it.
ACA reporting deadlines for 2025
Deadline to furnish to individuals: March 3, 2025. Employers must provide Form 1095-C to their employees by this date. The form details the health coverage provided throughout the year.
Deadline to electronically file Forms 1094-C and 1095-C with the IRS: March 31, 2025.
Note: Any employer filing less than 10 returns, including Forms 1094-C and 1095-C, may file by paper. In this case, the deadline to file for all paper forms with the IRS is February 28, 2025.
Electronic filing requirement
Final regulations have eliminated paper filing options for all ALEs filing more than 10 or more returns, thus mandating electronic submission. This shift is intended to streamline the reporting process and enhance accuracy. Furthermore, electronic filing ensures timely submission and reduces the risk of errors or delays.
Adjusted penalties for 2025 reporting
General reporting penalties
Penalties for failing to file correct information returns under Sections 6055 and 6056 can be significant. These penalties apply to inaccuracies or failures to file reports altogether. However, conditions exist for penalty waivers or reductions, such as showing reasonable cause for the failure to file correctly.
Adjusted penalty amounts
- Penalties for corrections made after 30 days but before August 1, 2025: Higher penalties apply to corrections made after 30 days but before the extended deadline.
- Penalties for intentional disregard: The maximum penalties apply if there is intentional disregard of reporting requirements.
- Standard penalties for 2024 returns filed in 2025: Penalties are adjusted annually and apply to returns filed in 2025 for the previous year.
- Penalties for corrected returns/statements within 30 days: Reduced penalties are available if corrections are made within 30 days of the original deadline.
What happens if you don’t reach these deadlines?
Failing to meet ACA reporting deadlines can result in steep penalties from the IRS, especially as enforcement efforts continue to increase. Here’s what employers need to know about the consequences:
Late furnishing to employees
If you don’t furnish Forms 1095-C (or 1095-B, if applicable) to employees by the required deadline, the IRS may impose penalties of up to $310 per form for 2025. This applies per recipient, so delays can add up quickly—especially for large employers.
Late filing with the IRS
Missing the deadline to file ACA forms with the IRS can trigger similar penalties. For electronic filers, the deadline is typically in late March, while paper filers have an earlier cut-off in late February. Filing late, or not at all, can cost employers hundreds of dollars per affected form.
Incorrect or incomplete information
Inaccuracies—such as incorrect names, Social Security numbers, or coverage details—can also result in penalties, even if the forms were submitted on time. Employers must make a good-faith effort to ensure data accuracy.
Intentional disregard
The highest penalties are reserved for employers who intentionally disregard ACA reporting requirements. In these cases, the IRS can apply fines as high as $630 per form—with no cap on the total amount.
Checklist to stay on track for ACA reporting in 2025
Avoid unnecessary stress and penalties by preparing early. Use this checklist to keep your ACA reporting on track:
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Verify employee data: Ensure that all employee information—names, SSNs, addresses—is accurate and up to date.
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Select your filing method: Decide whether you’ll file electronically or by paper. Employers with 10 or more forms must file electronically.
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Monitor deadlines: Track federal and state filing deadlines closely. Consider using a calendar or task management tool.
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Test your process: Conduct a test run of your data import and form generation process ahead of time.
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Leverage technology: Use ACA compliance software to manage large data sets and automate form generation and filing.
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Train your team: Make sure your HR, payroll, or benefits teams understand what’s required and when.
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Work with experts: Partner with experienced vendors or consultants who specialize in ACA compliance.
Tips to meet those deadlines
ACA reporting doesn’t have to be overwhelming. These practical tips can help your team meet all filing deadlines:
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Start early: Begin preparing your data and reviewing employee classifications as early as Q4 of the prior year.
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Use technology: Invest in reliable software that simplifies data tracking, form generation, and e-filing.
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Stay organized: Keep a checklist and store documentation in one centralized location to streamline the process.
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Communicate with employees: Let employees know when to expect their 1095-C forms and how to review them for accuracy.
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Seek professional help: Don’t go it alone. Lean on ACA reporting experts to reduce errors and avoid penalties.
State filing deadlines
In addition to federal ACA filing requirements, some states have individual mandates that require employers to submit forms directly to the state. For 2025, be sure to check state-specific deadlines in:
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California
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Massachusetts
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New Jersey
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Rhode Island
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Vermont
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Washington D.C.
Deadlines and requirements vary by state, so it’s important to stay informed. Some states may require registration or approval before submitting forms.
Leverage ACA reporting solutions
To ease the reporting process, working with ACA reporting providers who specialize in compliance can help streamline operations, ensure accuracy, and alleviate the burden associated with reporting. With a full-service reporting solution, employers can stay compliant without the heavy lifting.
Conclusion
In summary, adhering to ACA reporting requirements for 2025 involves meeting strict deadlines and understanding adjusted penalties. Staying compliant not only helps avoid penalties but also ensures that employees receive the benefits they deserve.
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.
