Timely ACA Reporting & Compliance Done Right
Let us take care of your ACA reporting and other compliance needs. Work with our ACA experts to ensure reporting is completed right the first time.
MEETING YOUR ACA REPORTING NEEDS
We offer a wide range of resources and services designed to provide multi-faceted ACA support.
1094-C & 1095-C FORMS
Our ACA specialists will help you determine the information you need for filing and will complete the required 1094-C and 1095-C documents. We take the guesswork out of determining the appropriate filing codes to meet ACA compliance. We will e-file with the IRS on your behalf for all ACA filing needs including forms and correspondence.
IRS Inquiry Letters
We will help complete responses if you receive inquiry letters from the IRS that are inaccurately triggered.
This can include letters 226-J, 5699, and 1865-C.
1094-B & 1095-B FORMS
Our ACA compliance services include filing 1094-B and 1095-B forms for employers who provide self-funded or level-funded coverage.
STATE ACA FORM FILING
The ACA filing service includes filing for states requiring state-level reporting. These states include Rhode Island, Washington D.C., California, and New Jersey.
DEDICATED ACA SPECIALIST
Your assigned ACA specialist will walk you through the process of gathering the required information and will complete the reporting forms based on your insurance plan information and employee data.
HELP DESK SERVICES
Our help desk is available to answer specific questions about ACA reporting. This is available to employers who do not require full reporting services but need help in certain areas of the reporting process.
*We can also take care of employee notification distribution for an additional fee.
Are You Meeting ACA Compliance?
The Affordable Care Act (ACA) changed requirements for the types of health insurance plans qualifying employers must offer to meet affordable insurance standards. This law also carries ACA reporting compliance requirements for employer-sponsored health plans.
These requirements include employee notices, IRS reporting for Applicable Large Employers (ALEs), and employer reporting for self or level-funded insurance plans, regardless of employer size.
Meeting these reporting requirements is essential to avoid costly fines and penalties. Many employers who qualify as an ALE do not realize they have to meet these requirements, so it’s important to understand your responsibility regarding ACA compliance.
HR Service, Inc. can help you review and determine your compliance needs.
ACA Services Your Way
HR Service, Inc. provides ACA reporting services to help you determine your compliance requirements and ensure forms are filed accurately and on time. Whether you need help with filing only, or you need someone to walk you through the reporting process, we have the services to reduce the hassle and we offer the support you need at every step.
Service Levels for ACA Compliance
ABUNDANT RESOURCES FOR YOUR COMPLIANCE SUCCESS
Gathering the information you need for ACA compliance can be tricky. Access our ACA Reporting Template to make sure you have all the information you need to complete your ACA requirements.
Best ACA Services
“Our experience with HR Service has been far and away the best service we’ve had in the health and welfare arena. Their detailed responses, willingness to talk through tough issues, and flexibility in responding to our needs blow away the competition.”
Meet Compliance, Reduce Risk
Meeting ACA compliance is essential as the IRS may impose penalties of up to $310 per form for failing to furnish an accurate form to employees and $310 per form for failure to file an accurate form with the IRS. These penalties can continue to increase if not addressed.
Our ACA reporting services and tools provide essential and affordable solutions for you to complete your ACA requirements. If you are unsure if you’re required to complete ACA filing, download our free ALE calculator to help determine your status.
Providing Affordable and Powerful Solutions
Contact HR Service, Inc. for a no-obligation quote, and let us help you determine and meet your ACA reporting needs.
ACA FAQ
ACA reporting is required by all organizations that meet Applicable Large Employer (ALE) requirements. The reporting must also be completed by employers who average less than 50 full-time or full-time equivalent employees but are self-insured or level-funded. The employer is considered the insurer in these instances and therefore the 1094 and 1095 B forms must be submitted each year to show employees and any dependents that were covered by health insurance.
An ALE is any employer with 50 or more full-time or full-time equivalent employees. To determine ALE status, employers must take an average of all employee hours to determine if they meet the full-time equivalent requirement. Those who meet this requirement must offer minimum essential coverage (MEC) to at least 95% of their full-time employees and the coverage must meet minimum values (MV). Download our ALE Calculator to determine your requirements.
When determining ALE status, employers must average the hours of part-time and seasonal employees against full-time hours. If these calculations provide a combination of full-time hours among non-full-time employees, those hours are considered full-time equivalent (FTE).
Employers who already qualify as an ALE are required to track hours for part-time and seasonal employees. This can be tracked in two different ways.
Monthly Tracking: Employers can track hours for variable employees monthly. If employees meet full-time hours for one month, coverage must be offered for the following month.
Look-Back Tracking: An employer can also use a look-back measurement period to track hours based on a period of anywhere from three to twelve months. If full-time hours are met during the period tracked, the employer is required to offer coverage for an equivalent period.
Those who meet ACA compliance requirements must also meet requirements to offer affordable coverage for eligible employees. Premium affordability is based on three possible Safe Harbor calculations:
- Federal Poverty Line Threshold
- Rate of Pay
- W-2 Box 1 Earnings
The calculations used to determine affordability are based on employer determinations. Each calculation has its pros and cons. Download our free Safe Harbor Calculator to determine the best calculator to ensure you meet affordability requirements.
The affordability threshold for affordable coverage is set by the IRS each year.
Threshold for 2024: 8.39%
Threshold for 2025: 9.02%
Form 1094-C and 1095-C are required for employers with 50+ full-time or full-time equivalent employees.
Form 1094-B and 1095-B are required for employers who provide employer-sponsored self or level-funded insurance coverage even if they have less than 50 full-time employees.
The most common penalties received are Section 4980H (a) and (b), also known as penalty A and penalty B. These penalties increase each year.
2024:
Penalty A = $2,970
Penalty B = $4,460
2025:
Penalty A = $2,900
Penalty B = $4,350
The A penalty is assessed when the employer does not offer health insurance for at least 95% of their full-time employees that meets ACA requirements of minimum essential coverage (MEC). This penalty is assessed on all full-time employees for each month the employer did not meet ACA requirements, minus the first 30 employees. If even one employee receives a premium tax credit and the employer does not correctly mark the box that states they offer MEC, they will receive this penalty.
The B penalty is assessed when an MEC plan is offered but does not meet minimum value or affordability requirements. These penalties are only assessed on the employees who did not receive a qualifying offer and who went to the Marketplace to enroll in medical coverage and received a premium tax credit.
Letter 226-J is an initial letter the IRS sends to ALEs to notify them that they may be liable for an Employer Shared Responsibility Payment (ESRP). Employers receive this letter if the IRS believes there was a failure to offer MEC or a failure to meet minimum value requirements. Employers are likely to see one of these letters if an employee files for a premium tax credit.
Letter 227 includes a series of letters based on a review of an employer’s ESRP liability. These letters are a follow-up to the 226-J letter providing an acknowledgment that a response to 226-J was received, giving an update on the ESRP status, and offering the next steps to review or contest it.
Letter 5699 gets sent if the IRS believes that an employer met the requirements as an ALE for a tax-filing year but did not file AVA reporting documents. This letter is triggered based on the number of W-2s filed for the tax year in question. If more than 50 W-2s were filed, the IRS may assume the employer is an ALE under the full-time equivalent regulations and must comply with ACA reporting requirements. The employer is required to respond to the letter, indicating whether they were an ALE or not. If the employer was an ALE, they must file the forms and a reason for filing late.
Letter 5698 gets triggered if the employer fails to respond to Letter 5699. This letter reminds the employer they have not responded, and they need to do so immediately, or risk penalties based on their W-2 filings.
Letter 5005-A is the penalty notice following Letters 5699 and 5698. This letter focuses on the failure of ALEs to distribute 1095-C forms to employees and to file 1094-C and 1095-C forms with the federal tax agency by the required deadline.
CP215 acts as the official “bill” received after 5005-A. The 5005-A is not a payment request, and the employer still has a chance to respond to the IRS before penalties are applied.
Letter 916C comes as a notice from the IRS indicating a claim or request is incomplete and cannot be processed. The letter will recommend filing the forms electronically.
Notice 972 CG is a proposed penalties notice sent when returns are filed after their due date, when returns were filed on paper, or when returns were filed with an incorrect or missing TIN.
Letter 1865C is a letter sent to inform an employer that the IRS is unable to process the 1094/95 B or C forms because the forms are incomplete or not in the required format, or the 1094 B or C was missing. The letter asks that the employer resubmit the forms by a certain date.
Note: we have found that some of our clients have received this notice 1) receiving multiple versions that say different things, 2) with the fax or phone number missing, not working, or going to a source who does not clearly identify themselves as IRS, 3) delayed to clients who filed as requested, 4) To clients we have 100% confidence that all the forms were submitted correctly and timely.
The ACA was enacted to ensure affordable health insurance is available for most people in the United States. The law provides subsidies, called Premium Tax Credits, to lower insurance costs for households with income between 100% and 400% of the federal poverty level.
Rhode Island and Washington D.C. have enacted requirements on the state level for all levels of health coverage. California and New Jersey have requirements for self-funded coverage only. Massachusetts has its own form for filing. Each of these states has enacted individual mandates. This includes employers in the state and employers with employees in the state.
Minimum Value (MV) – An employer-sponsored plan provides a minimum value if it covers at least 60% of the assumed cost for the standard population to cover the benefits provided. This is the equivalent of a bronze-level plan.
Minimum Essential Coverage (MEC) – MEC refers to types of coverage that satisfy the ACA’s individual mandate. This typically involves insurance policies that provide major health coverage. ALE-qualified employers must offer MEC to at least 95% of their full-time employees.
Affordability – Affordability deals with providing plans with premiums that are affordable based on one of three Safe Harbor calculations. Under the employer-shared responsibility affordability Safe Harbors, employers are allowed to use form W-2 wages, an employee’s rate of pay, or the federal poverty line.
Are you providing affordable coverage? Access our Safe Harbor Calculator to find out.
This easy to use calculator will help you determine and calculate your safe harbor for affordable coverage.