What Are the Latest ACA Reporting Changes and Deadlines?

Last Updated on October 17, 2023 / HR Compliance

HR Question:

I know it’s almost time for the next ACA reporting period. What changes do I need to be aware of for the 2023 tax year?

HR Answer:

You’re right – the ACA (or Affordable Care Act) reporting season is right around the corner! While there are no major changes to the ACA forms and codes for the 2023 tax year, there are some items or updates to be aware of as we head into 2023. If you’re unsure whether you need to report, check out our article on ACA reporting requirements.

Paper Filing Deadlines

The employee distribution deadline for the 1095-C forms is March 4, 2024. In previous years, employers could file their 1095-C and 1094-C forms in paper format to the IRS by mail as long as they did not exceed 250 forms in total. Moving forward to this coming reporting year, the IRS is requiring all employers with more than 10 forms to report through electronic methods. This could be either directly through the IRS’s system or through a third-party provider set up to send to the IRS’s system (such as many HRIS providers). Any corrected forms would also be required to be submitted electronically. If there are less than 10 forms, the paper filing deadline will be on February 28, 2024.

If the employer’s coverage is not affordable under one of the safe harbors and a full-time employee is approved for a premium tax credit for marketplace coverage, the employer may be subject to an employer shared responsibility payment under Section 4980H(a) or Section 4980H(b).

E-Filing Deadlines

The deadline for e-Filing 1095-C and 1094-C forms to the IRS is April 1, 2024 (since March 31st falls on a Sunday). Keep in mind that there could be additional ACA state reporting requirements for your organization with differing deadlines. The states to pay special attention to are California, New Jersey, Massachusetts, Rhode Island, and the District of Columbia.

Be aware of the full list of form types that are required to be sent to the IRS electronically based on the total number of forms submitted.

• Forms 1042–S
• 1094-series
• 1095–B and 1095–C
• 1097-BTC
• 1098, 1098-C, 1098–E, 1098-Q, and 1098–T
• All 1099 series
• Forms 3921 and 3922
• 5498-series
• 8027
• W–2G
• Forms W–2 (Wage and Tax Statement)
• U.S. Territory Forms 499R–2/W–2PR (Withholding Statement (Puerto Rico)
• U.S. Territory Form W–2VI (Virgin Islands Wage and Tax Statement)

There have always been fines attached to late filing with all of these forms. However, the amount has increased to $290 per W-2 from $250 (even if they are mailed in paper format and should have been sent electronically).

Updated Affordability Percentage and Penalties

For the 2023 tax year, the affordability percentage – the maximum amount of an employee’s pay that can be spent on “Employee Only” coverage in order to be considered “affordable” by ACA – decreased from 9.61% to 9.12%. Although there are no major changes to the ACA forms and codes for the 2023 tax year, the IRS has updated the ACA affordability percentage to 9.12%.

Additionally, the IRS has declared that the penalty under Section 4980H(a) will increase to $2,880 or $240 per month, and the penalty under Section 4980H(b) will increase to $4,320 or $360 per month. With these increasing costs associated with noncompliance, it’s important for employers to carefully assess their group health plan offerings to make sure they’re aligning with ACA best practices. It is also essential to ensure that these plans provide comprehensive coverage to full-time employees, including at least one affordable self-only option that meets minimum value benefit requirements.

Thank you to Mary Mitchell, MBA, SPHR, SHRM-SCP, Certified Healthcare Reform Specialist, for contributing to this week’s HR Question of the Week.

Whether you’re new or experienced when it comes to ACA reporting, it can be a confusing process. Clark Schaefer Strategic HR are here to help! If you are unsure if your company should be reporting for ACA, we can help assess your employee calculations to determine if it is needed. We also have the ability to check your employee data for compliance and electronically file your company’s ACA forms with the IRS on your behalf. Contact us for your ACA reporting needs.