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October, 2019

Preparing for ACA Reporting

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Preparing for ACA Reporting

Year-end processing is upon us, and with this time of year comes Affordable Care Act (ACA) reporting. How prepared is your company for upcoming ACA reporting? Let’s take a look at the employer requirements for ACA reporting so you can be better prepared.

What is ACA Reporting?

ACA reporting refers to the information and forms employers have to gather and file with the IRS in relation to health coverage they offered their employees during the calendar year. Employers who are applicable large employers (ALEs) are subject to ACA reporting under the Employer Mandate.

ACA reporting deadlines for 2020:

Due DateDeadline
January 31, 2020Supply Forms 1095-C to employees.
February 28, 2020File paper Forms 1095-C with transmittal Form 1094-C.
March 31, 2020e-File Forms 1095-C with transmittal Form 1094-C.

Preparing Forms 1095-C

Form 1095-C is the employer-provided health insurance offer and coverage form. It consists of two parts:

  • Part I Employee and Applicable Large Employer Member (Employer): Provide general employee and employer information such as names and addresses.
  • Part II Employee Offer of Coverage: Indicate the type of coverage offered if any using the provided IRS codes, the lowest cost monthly premium for the employee, and the applicable safe harbor codes.
W-2 Vs. Final Pay Stub

ACA Reporting Tip

Employers are required to furnish Form 1095-C to the employee only. Employees should provide a copy of this form to any family members covered under the self-insured, employer-sponsored plan listed in Part lll.

Preparing Forms 1094-C

Form 1094-C is the transmittal of employer-provided health insurance offer and coverage information returns. It consists of four parts:

  • Part I Applicable Large Employer Member (ALE Member): Provide general employer data such as name, address, the total number of Forms 1095-C submitted, and if it is an authoritative transmittal.
  • Part II ALE Member Information: Enter the total number of forms filed on behalf of the ALE Member, if the ALE Member is a member of an Aggregated ALE Group, and any certifications of eligibility that apply (i.e. Qualifying Offer Method).
  • Part III ALE Member Information (Monthly): Indicate if minimum essential coverage was offered, the full-time employee count for the ALE Member, the total employee count, the months the ALE was a member of an aggregated ALE group, and the code indicator for Section 4980H Transition Relief (if applicable).
  • Part IV Other ALE Members of Aggregated ALE Group: Enter the names and EINs of other ALE Members of the Aggregated ALE Group (if applicable).


Let’s face it, it’s impossible to manage ACA compliance and reporting when you’re using manual processes and multiple point systems. When your data lives in a unified database, ACA compliance and reporting is easy.

Tips for ACA Reporting

Tips for ACA Reporting

Perform an ACA Audit

To be prepared for the overwhelming year-end reporting season, run an audit on your past 1094-C and 1095-C filings during the summer. Performing an audit can catch any errors on past filings and ensure that your organization won’t be duplicating last year’s mistakes before ACA reporting officially begins. Not only can auditing save your organization time and stress this fall, but you’ll be able to fix any mistakes on your previous years’ filings before any penalties are assessed.
Watch for IRS Penalties

Watch for IRS Penalties

The penalties for failure to file complete and accurate Forms 1095-C and related forms by the March 31st deadline are up to $270 per return. If the IRS determines that failure was intentional, the penalty is $550 per return.

Tips for ACA Reporting

Proactively Check for Errors

The IRS requires that employee Forms W-2 and Form 1095-C must match what is printed on their social security cards. For example, if an employee has a hyphenated last name on their social security card but it is not hyphenated on their Form W-2 or Form 1095-C, this will be viewed as an error.

Make the effort now to solicit Taxpayer Identification Numbers (TIN) and correct any other information by checking your employee records or use a provider that offers an error-checking algorithm to automate the process.

Be Aware of ACA Reporting Extensions

Be Aware of ACA Reporting Extensions

If you plan to file for an ACA reporting extension, make sure you set a deadline that gives you ample time to apply. Form 8809 must be filed on or before the due date of the return for an extension.

Review Your ACA Strategy

Now is the time to review your current ACA strategy and determine what method of reporting you plan to use if you’re subject to the Employer Mandate. It’s important to approach ACA reporting with a team effort, aligning HR, Finance, and your company’s accountant or tax advisor.

It is crucial to use a system that accurately tracks and records coverage provided for each full-time employee on a monthly basis so you are better prepared at the end of the year.

When reviewing your current ACA strategy, consider the following:

Employer Mandate
Does your organization qualify as an ALE according to the guidelines of the Employer Mandate?
ACA compliance
Do you have the right systems in place to properly track and manage ACA compliance, including employee statuses, benefits administration, and variable hour employee tracking?
ACA reporting
What reporting method works best for your organization?
ACA reporting
Have you recently reviewed the IRS page on ACA reporting to ensure you’re up to date on reporting guidelines?

Prepare with a Partner

If your company is looking to partner with a trustworthy provider who offers Affordable Care Act compliance and reporting solutions, or if you’re looking to find a better fit for your needs, it’s important to look at what services are offered. When vetting providers, take a look at the features and benefits their solutions offer and how they will work with your compliance strategy. Find out if the vendor provides the following ACA services:

Form W-2
Automatic reporting of employer-sponsored coverage amounts on Form W-2s.
applicable large employer
A full-time equivalent calculation to determine if your organization is an applicable large employer.
partner marketplace
Management of coverage option notices to employees.
overtime tracking
Management of part-time employees’ hours with alerts for anyone who has exceeded their allowed hours of service for the week.
Benefit enrollment tracking
Benefit enrollment tracking to ensure applicable employees are covered.
Benefit enrollment tracking
Reporting to determine which employees are eligible for health coverage.
ACA alerts
Dashboard views to manage measurement periods and receive ACA alerts.
annual ACA reporting
Annual reporting with pre-populated 1094-C and 1095-C forms and e-filing on your company’s behalf.

State Unemployment wage bases

For more updates on state unemployment wage base changes, visit our SUTA Wage Bases page.

FUTA Credit Reductions

For more updates on state eligibility, visit our FUTA Credit Reductions page.

Payroll Tax Rates and Changes

Visit our Payroll Taxes: Rates and Changes page to make sure you stay compliant.



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