ACA Forms Essential Information for Employers about ACA Penalties 2024

Image of Form 1094-B Header Section
Image of Form 1094-C Header Section

The Affordable Care Act (ACA) mandates that all employers and insurance providers meet annual ACA reporting obligations. Thus, any entity offering Minimum Essential Coverage (MEC) to an individual must report this information.

A Quick Rundown on Penalties Related to ACA Form 1095

What are the types of Form 1095 Penalties?

ACA penalties are typically split into two categories:

  1. Employer Shared Responsibility Payment (ESRP): This penalty applies to large employers who do not offer minimum essential coverage to at least 95% of their full-time employees (and their dependents), and at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the health insurance marketplaces. The ESRP is also known as the "employer mandate" or "play or pay" penalty.

  2. Reporting and Disclosure Penalties: These penalties are assessed for failing to file required information returns with the IRS or to provide required statements to individuals. These information returns include Form 1094-C and Form 1095-C, which large employers must file under the ACA's reporting requirements.

Please click here to learn more about the various types of IRS ACA penalties and their corresponding fines.

What is Form 1095-B?

Form 1095-B is an information return filed by health insurance providers or employers offering self-funded coverage with fewer than 50 full-time + full-time equivalent employees.

Insurance Providers
OR
Self-Funded Small Employers

less than 50 full-time + full-time equivalent employees

For more info on Tax Year 2023 Form 1095-B, click here.

What is Form 1095-C?

Form 1095-C is an information return filed by employers with at least 50 full-time + full-time equivalent employees. These employers are known as 'Applicable Large Employers' or ALEs by the IRS. This form tells the IRS if the employer met ACA guidelines for the healthcare coverage they offer, and it requires that employees receive a recipient copy.

Applicable Large Employers

at least 50 full-time + full-time equivalent employees for all EINs added together that share a common owner

For more info on Tax Year 2023 Form 1095-C, click here

We also recommend checking out the IRS.gov ACA FAQ, which contains many common 1095-C questions in an easy-to-understand format.

All Features Included

Purchasing any BoomTax package will give you everything you need to complete your filing.

This includes:

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Causes for IRS Penalties on Employers

Employers can incur ACA penalties and receive letter 226J from the IRS due to the following circumstances:

  • Non-compliance to IRS reporting requirements (Sections 6055 and 6056)
    • Late filing of ACA forms
    • Late distribution of ACA forms
    • Filing incorrect or errored forms
  • Non-compliance with the ACA Employer Mandate (Section 4980H (a) and (b))
    • Failure to provide MEC to 95% of full-time employees
    • Failure to provide affordable coverage to full-time employees

What are the penalties for not submitting ACA Forms 1095-B & 1095-C?

The IRS determines ACA penalties based on various factors, including missing the deadline, providing incorrect information, or using paper forms when electronic filing is required.

The IRS has increased the penalty amounts for the 2024 filing year.

Failure to file ACA 1095 Forms 2024

$310 per form

up to

$1,261,000 per year (smaller businesses)

$3,783,000 per year

Failure to furnish ACA 1095 Forms 2024

$310 per form

up to

$1,261,000 per year (smaller businesses)

$3,783,000 per year

Intentionally not filing for 2024

$630 per form

no maximum penalty

To prevent unnecessary penalties from the IRS, now and electronically file your Form 1095-C and 1095-B. BoomTax will automatically generate your 1094-C or 1095-B if you e-file form 1095-B or 1095-C with us.

How to Avoid IRS Penalties?

Receiving penalties from the IRS can be daunting. Here’s how you can protect yourself from such risks:

  • Submit your ACA forms to the IRS punctually.
  • File Form 1095-C with accurate information like TIN, Codes, etc.
  • Ensure correct filing type (paper filing vs e-filing). You may incur a penalty if you paper file when you're required to file electronically.
  • Offer appropriate health insurance coverage that is affordable and provides minimum value to full-time employees.

How Do You File ACA Forms Online?

Generally, ACA filing is handled by self-filing or by using an ACA Software provider:

small boomtax logo

  • Simple format for data import (like Excel)
  • Can often use your payroll files directly
  • No testing, TCC, or IRS account required
  • Can help with questions/coding

Self-Filing

  • Format requires custom software development
  • Filing system can be slow and unreliable
  • Requires testing, TCC, and personal info
  • Errors and issues reported can be cryptic

Learn more about filing ACA Forms online.

How can I Request an Extension for Filing ACA Form 1095-B or 1095-C?

If you can't file ACA Form 1095-B or 1095-C on time, you can request an automatic, 30-day extension by filing Form 8809 OR by requesting a time extension directly from BoomTax.
Learn to request an ACA Form extension or check out our extensive deadlines.

Can I submit ACA 1095 Forms with BoomTax?

BoomTax will streamline your ACA filing process in 3 simple steps!

Import Your Data

You can import your data as Excel, XML, or use files from popular payroll providers like QuickBooks, UKG, ADP, and many more.

Step-By-Step Wizard

We walk you through the process with no complicated jargon. You can also live chat with a real person as you work on your filing for hands-on help.

E-File & Mail Employee Copies

Once your data is loaded, you can e-file and distribute employee copies in minutes.

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