Staying compliant with federal regulations is crucial for businesses, particularly as the year...
As the new year approaches, employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 and 6056 must prepare for important deadlines in early 2025. Proper compliance is essential to avoid penalties and ensure smooth reporting processes. Here’s everything you need to know about upcoming ACA reporting deadlines and requirements for the 2024 calendar year.
Key ACA Reporting Deadlines for 2025
March 3, 2025 – Furnishing Individual Statements
Covered employers must furnish statements to individuals by March 3, 2025. This date, which accounts for the weekend extension, applies to Forms 1095-B and 1095-C. In specific scenarios, an alternative method for furnishing these forms is available.
February 28, 2025 – Filing Paper Returns
For employers filing fewer than 10 returns, paper filings with the IRS are due by February 28, 2025.
March 31, 2025 – Electronic Filing Deadline
Employers filing 10 or more returns must file electronically by March 31, 2025. The electronic filing requirement now applies to entities filing as few as 10 combined returns, including other forms like W-2 and 1099.
ACA Reporting Requirements: Who Must Comply?
ACA reporting is mandatory for the following entities:
- Employers with Self-Insured Health Plans: These employers must report under Section 6055.
- Applicable Large Employers (ALEs): ALEs with 50 or more full-time employees (including equivalents) during the preceding calendar year are subject to Section 6056 reporting. ALEs offering self-insured plans must comply with Section 6055 and Section 6056 requirements. The IRS permits ALEs with self-insured plans to use a single combined form for efficiency.
Understanding Section 6055 and Section 6056 Reporting
Section 6055 Reporting
This applies to entities providing Minimum Essential Coverage (MEC), including employers with self-insured plans. These entities must use Forms 1094-B and 1095-B to report the coverage offered in the previous year.
Section 6056 Reporting
- Section 6056 pertains to ALEs, who must report information about the health coverage they provide (or fail to provide) to full-time employees. These entities use Forms 1094-C and 1095-C for compliance.
Combined Reporting for Self-Insured ALEs
Employers offering self-insured plans and falling under ALE status can simplify compliance using Forms 1094-C and 1095-C to meet Sections 6055 and 6056 requirements.
Annual Filing and Extension Options
- Filing Deadlines: Annual forms must be filed with the IRS by March 31 (or February 28 for paper submissions) of the year following the reporting calendar year.
- Automatic 30-Day Extension: Employers can request an automatic 30-day extension by filing Form 8809 before the original due date. Additional extensions may be available for employers facing specific hardships.
Furnishing Statements to Individuals
The IRS has permanently extended the deadline for providing individual statements by 30 days. Statements are now due by March 3 for 2024 reporting. If the due date falls on a weekend or holiday, employers have until the next business day.
Alternative Furnishing Method for Section 6055
With the individual mandate penalty reduced to zero, the IRS allows an alternative furnishing method for Section 6055. Reporting entities can post a notice on their website stating that individuals may request a copy of their statement. This notice must:
- Include an email address, physical mailing address, and contact phone number.
- Be posted by March 3, 2025, and remain available through October 15, 2025.
Electronic Filing Requirements
Electronic filing is mandatory for entities submitting 10 or more returns. Here are key points to consider:
- Aggregation Rule: The threshold applies across all forms filed (e.g., W-2, 1099), not just ACA forms.
- Hardship Waiver: Entities can apply for a hardship waiver if electronic filing poses undue challenges. Despite this, the IRS encourages electronic filing wherever possible.
- AIR Program: Employers must use the ACA Information Returns (AIR) Program for electronic submissions, adhering to the technical standards outlined in IRS Publications 5164 and 5165.
- Best Practices for ACA Reporting Compliance
- Review Filing Requirements: Determine whether you’re filing under Sections 6055, 6056, or both.
- Ensure Accurate Recordkeeping: Maintain detailed records of employee health coverage to avoid discrepancies during reporting.
- Utilize Extensions Wisely: File Form 8809 if you need additional time, but aim to complete reports before deadlines to prevent penalties.
- Seek Professional Assistance: Consider consulting with a tax advisor or HR professional to ensure accurate compliance with IRS regulations.
Consequences of Non-Compliance
Failure to meet ACA reporting deadlines can result in significant penalties. These include fines for late filing, incomplete forms, or failing to provide required statements to employees. Ensuring timely and accurate reporting is crucial for avoiding these penalties and maintaining compliance.
Conclusion
Staying ahead of ACA reporting deadlines is essential for covered employers. By understanding key dates, requirements, and best practices, you can ensure a seamless reporting process for the 2024 calendar year. Start preparing today to avoid last-minute hurdles and secure compliance with IRS regulations.
Learn more about the upcoming HR compliance important dates for next year by contacting one of our TPG Payroll & HR experts; Just call 909.466.7876!
Also, learn more about Year-End HR Activities for Success in 2025 and, do you know: What is Quiet Vacationing and How Can Employers Address it?
