2024 ACA Reporting Deadlines and ICHRA
Overview As the year draws to a close, it is imperative to address your Affordable Care Act (ACA) reporting obligations.
The deadlines for 2024 ACA reporting are rapidly approaching, and non-compliance can lead to substantial penalties, ranging from hundreds to millions of dollars, depending on the severity of the infractions.
Below, we outline the essential information needed to ensure compliance and avoid costly errors.
ACA Reporting Penalties
The Internal Revenue Service (IRS) imposes significant penalties for late or inaccurate filings under Sections 6721 and 6722 of the Internal Revenue Code.
For instance: Failing to timely file ACA forms can result in penalties of up to $330 per return for large employers and $110 per return for small employers.
If filings are submitted more than 30 days late, penalties increase to as much as $660 per return for large businesses and $220 per return for small businesses, depending on the duration of the delay. Intentionally neglecting to file incurs penalties of $660 per return, with no maximum limit. Providing incorrect or incomplete information may also result in similar fines, which can escalate if corrections are not made promptly.
These penalties can accumulate swiftly, especially for employers filing numerous forms.
To avoid incurring unnecessary expenses, it is vital to ensure accurate reporting from the outset.
2024 ACA Reporting Deadlines
Understanding and adhering to ACA deadlines is critical to preventing penalties.
Key dates to note include:
- Employee Statements (Forms 1095-B/1095-C):
- Employers are required to distribute these forms to employees by January 31, 2025, ensuring employees have the necessary information for their tax filings. (Refer to recent amendments related to the Paper Reduction Act, which allow employers to post information on their intranet. For further details, please contact us.)
- IRS Filing Deadlines: Electronic Filing (required for 10 or more total forms):
- Due by March 31, 2025.
- Paper Filings (for fewer than 10 forms):Due by February 28, 2025.
Missing these deadlines or submitting incomplete filings can result in significant fines, but with effective planning and support, compliance is achievable.
- ACA Reporting Forms
- The forms required for ACA reporting depend on the size of your business and the benefits offered.
Small Employers Offering Self-Funded Plans:
Applicable Large Employers (ALEs): Employers with 50 or more full-time and full-time equivalent employees in the previous calendar year must: Provide affordable, minimum essential coverage to full-time employees and their dependents. File Forms 1095-C (Employee Statements) and 1094-C (Transmittal) with the IRS.
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- Penalties for ALEs failing to comply with the coverage mandate (under Section 4980H) can be substantial:
- **4980H(a):** $2,970 per full-time employee if coverage is not offered.
- **4980H(b):** $4,460 per employee if the coverage is deemed unaffordable or does not meet minimum value.
Employers Offering ICHRAs Regardless of company size, offering Individual Coverage HRA (ICHRA) activates ACA reporting requirements.
ICHRAs are classified as self-funded group health plans, and employers must: Provide details regarding affordability and eligibility for individual market coverage.
We offer tailored ACA compliance solutions designed to protect your business and streamline reporting processes.
Expertise in ensuring compliance for ICHRAs, regardless of company size.