There’s good news for Applicable Large Employers (ALEs) in 2024 when it comes to filing their state ACA reports. Because the filing date falls on a Sunday, they’ll have an extra day to meet filing deadlines. Typically, the filing deadline falls on the last day of March, but March 31 is on a Sunday this year, so the deadline is April 1.
This blog will examine tax year 2023 ACA filing requirements, and what employers need to know to ensure compliance and avoid fines and penalties.
Are You an ALE?
ALEs are employers with an average of 50 or more full-time equivalent employees during the prior calendar year — in this case 2023. These employers must file Forms 1094-C and 1095-C to the IRS providing information about the healthcare coverage they offered to employees. The forms also serve as a means of determining whether ALEs owe any payments based on that coverage.
- Feb. 28, 2024—paper filing.
- March 1, 2024—provide Form 1095-C to employees.
- April 1, 2024—electronic filing.
A new requirement for 2024 is that employers with more than 10 returns in a calendar year are no longer able to file paper copies and must file electronically.
In addition to meeting federal filing deadline requirements, ALEs must also meet state-specific ACA deadlines, which can vary state to state.
Variations in State Reporting Requirements
Accurate recordkeeping and reporting can be a challenge for employers, especially in situations where they employ part-time or seasonal staff whose hours might fluctuate moving them in and out of the classification of full-time employee.
In addition, employers with employees in multiple states need to be aware of, and adhere to, individual state reporting requirements. These requirements apply to the states where employees live and not, necessarily, the states where employers have business locations. With the increase in remote and hybrid work since the pandemic, this adds in another layer of reporting complexity for employers.
And, because these laws and requirements change regularly, and as new jurisdictions are added, employers must take steps to ensure they are aware of the changes affecting them. These requirements and related deadlines can vary significantly from one state to another. For instance, California’s state filing deadline is April 1—the District of Columbia’s is April 30.
Another challenge: avoiding the potential periods of overreporting.
Be Wary of Overreporting
In most cases, when it comes to reporting on business activities, more is better. Providing more detailed information seems like a good way to ensure compliance and avoid being at risk of not sharing enough information. However, with ACA state reporting requirements, that’s not the case.
In fact, there are risks related to overreporting.
Specifically, employers need to ensure that they report only on their full-time equivalent employees, and not on part-time employees unless they’re self-insured.
Implications of Non-Compliance
The intent behind the ACA was to ensure that employees have access to affordable healthcare. It’s something the government, and the IRS, take very seriously. Employers that fail to offer employees affordable healthcare coverage, and effectively track and report on these activities, are subject to fines.
ALEs not adhering to the requirements of federal and state ACA filing face penalties that have increased in 2024 from $50/return or statement, to $60. In addition, companies that fail to meet their Employer Mandate compliance requirements — even if they have just one employee who obtained a Premium Tax Credit from a state or federal health exchange, could be at additional risk.
The exact amount of the penalties depends on various factors, including the number of full-time employees and the extent of non-compliance. In some cases, the penalties can be substantial, potentially running into thousands of dollars per affected employee.
Navigating the Tricky Terrain of State ACA Filing in 2024
Adhering to ACA federal and state reporting requirements can be tricky, labor-intensive and prone to errors related to data collection, retention, and updating. Employers must maintain accurate records not only on employee work hours, but also where they live (and where they, consequently, file taxes). Again, in an increasingly remote work world, the chances of employees moving from one location to another have increased.
Employers must not only comply with constantly changing requirements, but must also ensure they have clean, up-to-date, and accurate data to drive their reporting.
State ACA filing deadlines are upon us. Make sure that you’re up-to-date and compliant with these regulations to avoid fines. Trusaic can help.
Missing an ACA filing or furnishing deadline could land your organization a significant penalty from the IRS. To ensure you never miss one, download the ACA 101 Toolkit, which documents the various federal and state reporting deadlines.