ACA Employer Reporting Requirements 2024

As we approach 2024, understanding the ACA employer reporting requirements is more crucial than ever for employers. The Affordable Care Act (ACA) mandates specific reporting obligations that ensure compliance and provide essential information to both the IRS and employees regarding health coverage. Employers must prepare to navigate these regulations effectively to avoid potential penalties and ensure that they are meeting their obligations. This article delves deep into the 2024 requirements, providing a comprehensive guide that outlines the necessary steps, forms, and key dates that employers need to be aware of.
We'll start by breaking down the reporting process itself. The main forms involved are Forms 1094-C and 1095-C, which serve as the foundation for reporting health coverage information. Form 1094-C is the transmittal form that provides summary information to the IRS, while Form 1095-C is given to each employee, detailing the health coverage offered. In 2024, employers need to pay attention to new regulations that may impact how they report health coverage, including updates to safe harbors and the coverage affordability threshold.
Next, understanding who qualifies as an applicable large employer (ALE) is vital. An ALE is defined as an employer that employs 50 or more full-time employees (including full-time equivalent employees) on average during the previous calendar year. For ALEs, the reporting requirements can be quite extensive, including the need to track employee health coverage offers accurately. This tracking is not only about compliance; it plays a crucial role in determining whether employees can access subsidies through health insurance exchanges.
One notable change for 2024 involves the affordability threshold. For the upcoming year, the percentage for determining affordability under the ACA has been updated. In 2023, the threshold was 9.12% of an employee's household income; for 2024, it is anticipated to rise slightly. This adjustment means employers must revisit their health insurance plans to ensure they remain compliant while providing affordable options to their employees.
The IRS also emphasizes the importance of correctly filing the required forms. Failure to file accurate information can lead to penalties, so employers should double-check the data before submission. Employers must also retain copies of these forms for at least three years for reference in case of audits or inquiries from the IRS.
As for deadlines, the key dates for 2024 include:

• January 31, 2024: Deadline for providing Form 1095-C to employees.
• February 29, 2024: Deadline for submitting Forms 1094-C and 1095-C to the IRS if filing on paper.
• March 31, 2024: Deadline for submitting Forms 1094-C and 1095-C to the IRS if filing electronically.
  Employers should also be aware of the penalties for non-compliance. The IRS has the authority to impose penalties for failures to file correct information returns and failures to furnish correct statements to employees. In 2024, the penalties may increase, making it even more essential for employers to stay informed and compliant.
  Moreover, there's a growing trend of using technology to streamline the reporting process. Many organizations are leveraging software solutions that can automate data collection, generate required forms, and ensure timely submissions. This technology not only saves time but also reduces the likelihood of errors, enhancing overall compliance.
  Employers should also engage in employee education regarding their health coverage options. It’s essential for employees to understand their benefits and the implications of their health coverage, especially in relation to their potential eligibility for tax credits. Employers can facilitate this education through workshops, informational sessions, or digital resources.
  To further enhance understanding, let’s examine a sample case study of an applicable large employer navigating the reporting process:

Case Study: ABC Corporation

Background: ABC Corporation has 75 full-time employees and offers a health plan to all eligible employees.
Reporting Process: ABC Corporation ensures that they accurately track which employees are offered coverage, the months during which coverage was available, and the type of coverage provided. They utilize an HR information system (HRIS) to maintain records and generate the necessary forms.
Challenges: In 2023, they faced challenges with employees opting out of coverage, impacting their reporting accuracy. To combat this, they held informational sessions to educate employees about the importance of maintaining coverage.
Outcome: As a result, ABC Corporation improved their reporting accuracy and avoided potential penalties. They found that proactive employee engagement significantly improved compliance.
The takeaway from ABC Corporation’s experience is that proactive measures—both in technology and employee education—can lead to a smoother reporting process. As the landscape of employer obligations continues to evolve, staying ahead of the curve is crucial for all employers.
In summary, the ACA employer reporting requirements for 2024 are complex but manageable with the right approach. By understanding the nuances of Forms 1094-C and 1095-C, being aware of deadlines, and utilizing technology, employers can streamline their reporting processes while ensuring compliance. It's not just about meeting legal obligations; it's about fostering a culture of health and awareness within your organization. As we look ahead, let's embrace these requirements as an opportunity to enhance our workplace health initiatives and support our employees better.