Affordable Care Act (ACA) compliance may be here to stay. This election cycle is the first time in more than a decade that the ACA has taken a back burner to other contentious issues, The Wall Street Journal reports. But a quick Google search reveals that this isn’t the first time this has made headlines. In 2018 the Washington Post said Republicans “surrendered” their fight to repeal and replace what they had pejoratively referred to as “Obamacare.”
The truth of the matter? It’s likely here to stay—because it’s working. The National Institutes of Health reports that: “A skimming of recent headlines suggests that the ACA is not only doing what it was intended to do—increase access to quality health care—but has surpassed expectations. Studies show that the ACA is significantly reducing the number of uninsured people across the country.”
Employers, of course, are taking primary responsibility for ensuring this happens as they continue to take steps to comply with requirements of the ACA for both offering employees affordable health care coverage and reporting on their efforts—and the number of employees receiving the coverage.
And it’s that time of year again—time to prepare for upcoming 2024 ACA reporting deadlines.
2024 Reporting Deadlines
The ACA requires Applicable Large Employers (ALEs) to report whether they offered minimal essential coverage (MEC) that was affordable and that provided minimum value to full-time employees. Employers of any size with self-insurance plans also must report months of coverage for all individuals.
The key reporting deadlines for ALEs in 2024 are:
- February 28, 2024—Paper Filing with IRS.
- March 1, 2024—Form 1095-C: Deadline to Furnish to Individuals.
- April 1, 2024—Electronic Filing with IRS.
In addition—and this is a new impact for smaller employers—beginning January 1, 2024, the IRS will require electronic filing by employers that file 10 or more returns in a calendar year. That means employers with 10 or more 1095-C forms will no longer be able to file paper copies and must file electronically.
Missing 2024 ACA filing deadlines can result in substantial penalties:
- 4980H(a) Penalty: employers that don’t offer minimum essential coverage to at least 95% of their full-time employees and their dependents. In 2024, the penalty is $2,970 per full-time employee (excluding the first 30 employees).
- 4980H(b) Penalty: employers that don’t offer coverage that is affordable and provides minimal value. The penalty in 2024 is $4,460 for each full-time employee who receives the tax credit and purchases Marketplace coverage.
- Late/incorrect reporting penalties—penalties of $310 for Forms 1095-C and $310 for Forms 1094-C, for a total of $620/employee (or $630 if the failure was intentional).
- Some states, like California, also have their own penalties.
It’s important to begin planning now to ensure that you can remain compliant for the 2024 filing year—and to stay up-to-date on reporting requirements.
To gain invaluable insights on penalty amounts, affordability percentages, filing deadlines, expert tips for responding to penalty notices, and proven strategies for minimizing IRS penalty risk, download the ACA 101 Toolkit.