2024 ACA Filing Requirements and Checklist

As an employer, maintaining compliance with the Affordable Care Act (ACA) is essential to provide affordable and comprehensive healthcare coverage to your employees while avoiding substantial penalties. Navigating the complexities of the ACA can be challenging due to evolving requirements. Here’s a comprehensive ACA compliance checklist for 2024 to help you manage and fulfill your obligations.

What is Required for ACA Compliance?

ACA compliance involves several critical components that employers must adhere to:

Employer Shared Responsibility Provision (ESRP)

Also known as the ACA’s “play or pay” requirement, this provision applies to Applicable Large Employers (ALEs)—those with 50 or more full-time equivalent (FTE) employees. ALEs must offer minimum essential coverage to a specific percentage of their full-time employees and their dependents to avoid penalties.

ACA Reporting

Employers must furnish information returns (Forms 1094-C and 1095-C) to both their full-time employees and the IRS. These forms include details about the employer’s healthcare coverage offers and enrollment information.

Health Insurance Marketplace Notices

Employers are required to provide Marketplace Notices to their employees, informing them about potential eligibility for premium tax credits if they choose Marketplace coverage instead of employer-sponsored plans.

What are the ACA Requirements for Employers in 2025?

To ensure compliance with the ACA in 2025, consider the following key requirements:

Evaluate ALE Status

Determine if your organization qualifies as an ALE by calculating your average employee count during the preceding calendar year. If you have an average of 50 or more full-time equivalent employees, you fall under this category. Your payroll provider can assist with this using payroll compliance services or ACA filing and reporting services.

Offer Affordable Coverage

For 2024, ALEs must offer affordable health insurance that meets minimum essential coverage requirements to at least 95% of their full-time employees and their dependents to avoid penalties. Affordable coverage is determined by the employee’s contribution not exceeding a certain percentage of their household income.

2025 Reporting Deadlines for 2024 Information Returns

Maintaining accurate records on healthcare coverage offers and enrollments for each reporting year is crucial. Key deadlines for 2025 related to 2024 information returns are:

• Individual Statement Furnishing Deadline: March 3, 2025
  • Individual statements for the 2024 calendar year must be furnished within 30 days of January 31, 2025. Since January 31, 2025, falls on a weekend, the deadline is extended to the next business day, March 3, 2025.
• Electronic IRS Return Filing Deadline: March 31, 2025
  • Electronic IRS returns for the 2024 calendar year must be filed by March 31, 2025.

Note: Starting January 1, 2024, employers filing 10 or more returns in a calendar year must file electronically.

Helpful Hints…

• Educate Employees
  Inform your employees about the healthcare coverage offered, including benefits and costs, and provide them with a Summary of Benefits and Coverage (SBC) to enable informed decisions about their healthcare options.
• Monitor Employee Classification
  Carefully categorize your employees as full-time, part-time, or seasonal based on ACA definitions, as different rules apply to each group concerning health insurance eligibility and affordability.

What is ACA Compliance for Employers?

ACA compliance for employers refers to meeting legal obligations as outlined in the Affordable Care Act. This involves offering affordable healthcare coverage to eligible employees, providing accurate reporting to the IRS, and ensuring employees receive the necessary information regarding their healthcare options.

ACA Compliance Checklist:

Offer of Coverage

• Offer affordable health insurance that meets minimum essential coverage standards to eligible employees.
• Determine which employees are eligible for coverage based on their hours worked or employee status.

Form 1095-C – Employee Statements:

• Provide Form 1095-C to all full-time equivalent employees, including those who declined coverage.
• Report each employee’s offer of coverage on Form 1095-C using the appropriate codes.

Form 1094-C – Employer Transmittal:

• Submit Form 1094-C to the IRS along with copies of all Form 1095-C statements.
• This form serves as a summary of all employee statements and provides important information about your organization’s healthcare coverage.

Filing Deadlines:

• Furnish Form 1095-C to employees by March 3, 2025.
• File Form 1094-C, along with copies of Form 1095-C, with the IRS by March 31, 2025, if filing electronically.

Employer Shared Responsibility Payment:

• Determine if your organization is an ALE based on average employee count.
• Track employee hours meticulously to identify full-time equivalent employees and offer them affordable coverage.

Measurement Periods:

• Establish measurement periods to determine employee eligibility for coverage.
• Use a standard measurement period of at least three months to track employee hours.

Reporting Software:

• Invest in reliable and accurate payroll and HR software that includes ACA compliance features.
• Choose software that automates data collection, prepares correct forms, and keeps you informed about ACA requirements and updates.

Ongoing Monitoring:

• Regularly review your processes to ensure accuracy in tracking employee hours and coverage.
• Stay updated with any changes in ACA regulations and update your procedures accordingly.

Compliance Audits:

• Conduct internal audits periodically to ensure compliance with ACA requirements.
• Review records to confirm that all employees have been offered appropriate coverage.

Open Enrollment Periods:

• Communicate open enrollment periods to employees and provide them with enrollment options.
• Ensure employees understand their eligibility criteria, deadlines, and available coverage options.

Documentation Retention:

• Retain all necessary documentation, including employee records, offers of coverage, and Form 1095-C statements.
• Ensure all required documents are securely stored for the necessary period.

Penalties and IRS Notices:

Understanding the ramifications of non-compliance is crucial. Here are some penalties for missing ACA filing deadlines:

• 4980H(a) Penalty:
  For not offering minimum essential coverage to at least 95% of full-time employees and their dependents, the penalty is $2,970 per full-time employee, excluding the first 30 employees.
• 4980H(b) Penalty:
  For not offering coverage that is affordable and provides minimal value, the penalty is $4,460 per full-time employee who receives the tax credit and purchases Marketplace coverage.
• Late/incorrect reporting penalties:
  $310 for each Form 1095-C and 1094-C, for a total of $620 per employee; or $630 if the failure was intentional.

Staying compliant with ACA regulations can be complex, but by following this checklist, you can keep your organization on the right track. Investing in reliable payroll and HR software can automate ACA compliance tasks and streamline your overall process. Consult with a trusted payroll software provider to explore available options and select the best solution for your business.

At Tesseon, we understand that ACA compliance can be complex and time-consuming. Our comprehensive solutions handle all aspects of ACA compliance for your business. Our experts stay updated with the latest regulations, ensuring your company remains compliant with ACA requirements. From determining eligibility and tracking employee hours to managing benefit enrollment and generating necessary reports, we manage it all. By partnering with us, you can focus on other important aspects of your business, confident that your ACA compliance is in capable hands.