ACA Reporting

1. What is the ACA Employer Mandate?

The ACA employer mandate requires businesses with 50 or more full-time employees (or full-time equivalent employees) to offer affordable, minimum essential coverage (MEC) to at least 95% of full-time employees or face penalties.

Who Must Comply?

✔️ Employers with 50+ full-time employees (FTEs)
✔️ Applicable Large Employers (ALEs)

Who is Exempt?

❌ Small businesses with fewer than 50 full-time employees are not required to offer health insurance. However, they can still provide coverage and may qualify for tax credits.

2. What Counts as a Full-Time Employee?

✔️ Employees working 30+ hours per week or 130+ hours per month are considered full-time under the ACA.
✔️ Full-time equivalents (FTEs) count toward the 50-employee threshold for determining ALE status.

3. What is Minimum Essential Coverage (MEC)?

✔️ MEC refers to health insurance that meets ACA standards, including:

• Employer-sponsored health plans
• Government programs (Medicare, Medicaid, CHIP, TRICARE)
• Individual health plans through the Marketplace

4. What is Minimum Value (MV)?

✔️ A health plan meets minimum value (MV) if it covers at least 60% of total expected costs for standard healthcare expenses.

5. What is Considered Affordable Coverage in 2025?

✔️ A plan is affordable if an employee’s required contribution for self-only coverage does not exceed 9.02% of household income.

6. What Are the 2025 ACA Employer Penalties?

🚨 Penalty A – Failure to Offer MEC
✔️ If an ALE does not offer MEC to at least 95% of full-time employees and at least one employee receives a premium tax credit on the Marketplace:

• 💰 $2,900 per full-time employee, excluding the first 30 employees.

🚨 Penalty B – Offering Unaffordable or Non-MV Coverage
✔️ If an ALE offers coverage, but it is unaffordable or does not provide minimum value, and at least one employee receives a premium tax credit on the Marketplace:

• 💰 $4,350 per affected employee (capped at the total amount for Penalty A).

7. What Are the 2025 ACA Reporting Requirements?

📄 Form 1095-C – Employers must provide this to full-time employees outlining their health coverage.
📄 Form 1094-C – Employers must submit this to the IRS, along with copies of all 1095-C forms.

📆 Deadlines:
✔️ To Employees: March 3, 2025
✔️ To IRS (Electronic Filing): March 31, 2025

8. Where to E-File ACA Forms with the IRS

Employers required to submit Forms 1094-C and 1095-C must file electronically if they have 10 or more returns. E-filing can be done through the Affordable Care Act Information Returns (AIR) System on the IRS website.

📌 How to E-File:
✔️ Register for an account with the Filing Information Returns Electronically (FIRE) System or use an IRS-approved ACA software provider.
✔️ Submit forms through the Affordable Care Act Information Returns (AIR) portal: IRS AIR System
✔️ Use an authorized e-file provider or payroll service for compliance assistance.

9. How Employers Can Stay ACA Compliant

✅ Step 1: Determine ALE Status
✔️ Calculate full-time employees and full-time equivalents (FTEs) annually.

✅ Step 2: Offer Affordable, Minimum Essential Coverage
✔️ Ensure at least 95% of full-time employees have access to MEC and MV-compliant plans.

✅ Step 3: Monitor ACA Reporting Requirements
✔️ File Forms 1094-C and 1095-C with the IRS by the required deadlines.

✅ Step 4: Keep Records & Stay Updated on ACA Changes
✔️ Track employee eligibility, affordability calculations, and coverage offerings.

✅ Step 5: Consider Alternative Coverage Options
✔️ If offering traditional group health insurance is challenging, explore:

• ICHRA (Individual Coverage HRA)
• QSEHRA (Qualified Small Employer HRA)
• Level-funded health plans