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
Form 1095-C:
- 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.
Form 1094-C:
- Deadline to electronically file with the IRS: March 31, 2025. Form 1094-C, the transmittal form for ACA reporting, must be electronically filed with the IRS by this deadline. Moreover, this form summarizes the information provided in Form 1095-C.
Electronic filing requirement
Final regulations have eliminated paper filing options for ALEs, 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
- 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.
- 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.
- Maximum penalty amounts for small and large businesses: Penalty amounts vary based on the size of the business. Small businesses may face lower penalties compared to large businesses; however, the consequences of non-compliance remain serious for all.
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.
