Employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 or 6056 should prepare to comply with reporting deadlines in early 2025.

For the 2024 calendar year, covered employers must:

• File returns with the IRS electronically by March 31, 2025 (or by Feb. 28, 2025, if filing on paper). Employers that file at least 10 returns during the calendar year must file electronically.
• Ensure that statements are furnished to individuals upon request, by Jan. 31 of the year following the calendar year to which the return relates or 30 days after the date of the request, whichever is later. Reporting entities must give individuals timely notice of this option, in accordance with any requirements set by the IRS.

Penalties may apply if employers are subject to ACA reporting and fail to file returns by the applicable deadlines or furnish requested statements.

Covered employers

The following employers are subject to ACA reporting:

• Employers with self-insured health plans (Section 6055 reporting)
• Applicable large employers (ALEs) with either fully insured or self-insured health plans (Section 6056 reporting)

ALEs are employers with 50 or more full-time employees (including full-time equivalent employees) during the preceding calendar year. Note that ALEs with self-funded plans are required to comply with both reporting obligations. However, to simplify the reporting process, the IRS allows ALEs with self-insured plans to use a single combined form to report the information required under both Sections 6055 and 6056.

Individual statements

Upon request only

Pursuant to newly enacted legislation, reporting entities are no longer required to send Forms 1095-B and 1095-C to covered individuals unless a form is requested.

Reporting entities must give individuals timely notice of this option, in accordance with any requirements set by the IRS.

Requests must be fulfilled by Jan. 31 of the year following the calendar year to which the return relates or 30 days after the date of the request, whichever is later.

Important dates

• Feb. 28, 2025: Paper IRS returns for 2024 must be filed by this date. Reporting entities can file up to 10 returns on paper.
• March 31, 2025: Electronic IRS returns for 2024 must be filed by this date. Most employers must file electronically.

Sections 6055 and 6056 reporting

• Section 6055 applies to providers of minimum essential coverage (MEC), such as health insurance issuers and employers with self-insured health plans. These entities generally use Forms 1094-B and 1095-B to report information about the coverage they provided during the previous year.
• Section 6056 applies to ALEs—generally, those employers with 50 or more full-time employees, including full-time equivalents, in the previous year. ALEs use Forms 1094-C and 1095-C to report information relating to the health coverage that they offer (or do not offer) to their full-time employees.

Employers reporting under both Sections 6055 and 6056—specifically, ALEs with self-insured plans—use a combined reporting method by filing Forms 1094-C and 1095-C.

Annual filing deadlines

Generally, forms must be filed with the IRS annually, no later than March 31 (or Feb. 28, if filing on paper) of the year following the calendar year to which the return relates. Employers may receive an automatic 30-day extension to file with the IRS by completing and filing Form 8809 by the due date of the return. Additional extensions of time to file may also be available under certain hardship conditions.

Individual statements upon request

Under the original reporting rules, reporting entities had to furnish statements annually to each individual who was provided with MEC (under Section 6055) and each of the ALE’s full-time employees (under Section 6056). These statements were provided using Forms 1095-B and 1095-C; however, the IRS allows Forms 1095-B to be provided to individuals upon request if certain requirements are satisfied.

Under this alternative manner of furnishing Forms 1095-B, reporting entities must:

• Post a clear and conspicuous notice on its website stating that responsible individuals may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request may be sent, and a telephone number to contact the reporting entity with any questions.
• For 2024 statements, reporting entities must post the notice by March 3, 2025, and must retain the website notice through Oct. 15, 2025.

The Paperwork Burden Reduction Act codifies this alternative manner of furnishing Forms 1095-B and extends this flexibility to furnishing Forms 1095-C as well. Accordingly, reporting entities are no longer required to send Forms 1095-B and 1095-C to covered individuals unless a form is requested.

Reporting entities must give individuals timely notice of this option, in accordance with any requirements set by the IRS (while the IRS has not outlined how to timely give notice of the option to request Forms 1095-C, the requirements regarding the alternative manner of furnishing Forms 1095-B still apply). Requests must be fulfilled by Jan. 31 of the year following the calendar year to which the return relates or 30 days after the date of the request, whichever is later.

In addition, the Employer Reporting Improvement Act provides that statements can be provided electronically to individuals if they have affirmatively consented “at any prior time” (unless they have revoked such consent in writing).

Electronic filing

The electronic filing threshold for returns required to be filed on or after Jan. 1, 2024, is 10 or more returns (originally, the threshold was 250 or more returns). The instructions for 2024 returns (filed in 2025) provide the following clarifications and reminders:

• The 10-or-more requirement applies in the aggregate to certain information returns. Accordingly, a reporting entity may be required to file fewer than 10 of the applicable Form 1094 and 1095, but still have an electronic filing obligation based on other kinds of information returns filed (e.g., Forms W-2 and 1099).
• The electronic filing requirement does not apply to those reporting entities that request and receive a hardship waiver; however, the IRS encourages electronic filing even if a reporting entity is filing fewer than 10 returns.
• The formatting directions in the instructions are for the preparation of paper returns. When filing forms electronically, the formatting set forth in the “XML Schemas” and “Business Rules” published on IRS.gov must be followed rather than the formatting directions in the instructions. For more information regarding electronic filing, see IRS Publications 5164 and 5165.

Electronic filing is done using the ACA Information Returns (AIR) Program. The IRS has provided guidance on electronic reporting through its AIR Program main page, but this guidance is generally very technical and intended for software developers and other entities that plan on providing electronic reporting services. Nonetheless, it can provide useful information on standards and procedures for returns transmitted through the AIR Program.

Provided to you by Christensen Group Insurance. This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2024 Zywave, Inc. All rights reserved.