In today’s complex regulatory environment, compliance with the Affordable Care Act (ACA) remains a crucial aspect for employers, especially as it pertains to providing healthcare coverage and reporting obligations. The ACA, often referred to as Obamacare, has established a framework that requires meticulous adherence to its provisions to avoid substantial penalties. This guide aims to demystify the ACA filing process for employers, offering clarity and insights into the key components and deadlines.

1. Who Needs to File?

ACA compliance primarily concerns Applicable Large Employers (ALEs). An ALE is defined as an employer with 50 or more full-time employees, including full-time equivalent employees, on average during the previous calendar year. These employers must report to the IRS information about the health care coverage, if any, they offered to full-time employees.

2. The Reporting Requirements

The ACA mandates that ALEs report whether they offered minimum essential coverage (MEC) that was affordable and provided minimum value to their full-time employees. This is done through Form 1095-C for each employee and a transmittal Form 1094-C to the IRS.

3. Key Deadlines for ACA Filing

For the 2024 filing year, ALEs should be aware of the following deadlines:

• February 28, 2024: Deadline for paper filing with the IRS.
• March 1, 2024: Deadline to furnish Form 1095-C to individuals.
• April 1, 2024: Deadline for electronic filing with the IRS.

4. Electronic Filing Requirement

Starting January 1, 2024, employers filing 10 or more returns (including ACA forms and other tax documents) in a calendar year must file electronically. This means employers with 10 or more 1095-C forms are mandated to file these forms electronically.

5. The Penalties for Non-Compliance

Failure to comply with ACA filing requirements can lead to significant penalties:

• 4980H(a) Penalty: $2,970 per full-time employee in 2024, excluding the first 30, for not offering MEC to at least 95% of full-time employees.
• 4980H(b) Penalty: $4,460 in 2024 for each full-time employee receiving a tax credit for Marketplace coverage, if the employer’s coverage isn’t affordable or doesn’t provide minimal value.
• Late/Incorrect Reporting Penalties: Up to $620 per employee for Forms 1095-C and 1094-C (or $630 if intentional).

6. State-Specific Penalties

Some states, like California, have implemented their own health care mandates and associated penalties, further emphasizing the need for diligent compliance.

7. The Role of Cosmo Insurance in ACA Compliance

Navigating ACA compliance can be daunting, but it doesn’t have to be a solo journey. Cosmo Insurance offers expert guidance and support to ensure that your business remains compliant while minimizing administrative burdens. Our team can help automate and streamline the filing process, provide insights on penalty avoidance, and offer strategies to ensure that your business is not only compliant but also optimally positioned in terms of employee healthcare benefits.

Conclusion: Staying Ahead in Compliance

Staying abreast of ACA compliance requirements is crucial for avoiding penalties and ensuring that your employees receive the benefits they deserve. By partnering with knowledgeable experts like Cosmo Insurance, you can simplify this complex process and focus on what you do best – running your business. For more information on how we can assist with your ACA filing needs, contact us today.