ACA Reporting Failures Can Lead to Stiff Penalties

The Affordable Care Act, enacted in March 2010, was intended to make affordable health insurance possible for millions of Americans. However, with that expanded access came the need for new and complicated reporting by employers. As with many government programs, ACA reporting failures happen, bringing with them stiff penalties for violators.  




The number and type of employees determines the employer’s reporting requirements.

  • Employers with 50 or more full-time employees (and full-time equivalents) are called applicable large employers (ALEs). An ALE typically is required to prepare Forms 1094-C and 1095-C.
  • An aggregated ALE Group is a group of related employers. ALE members are held to the reporting requirements under Section 6056 of the Internal Revenue Code.
  • Special rules may apply for certain employers, including new employers and those who hire seasonal workers or workers with veteran or TRICARE coverage.

Employer shared responsibility provisions appear at sections 4980H and 6056 of the Internal Revenue Code. Some employers are required to offer either affordable coverage to full-time employees or a payment to the IRS if at least one full-time employee receives a premium tax credit for buying individual health insurance coverage on the marketplace. Employers may be required to file the following information with the IRS:

  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. ALEs with self-insured health plans file this form with the IRS reporting whether they offered coverage to their employees and what type of coverage was offered.
  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. Self-insured health plans send this form to each employee.
  • Form 1094B, Transmittal of Health Coverage Information Returns. Fully-insured health plans file this form with the IRS.
  • Form 1095B, Health Coverage. An employer with a fully-insured health plan sends this to individual employees and transmits a copy to the IRS.

Employers must send forms to their employees by January 31, 2019. If filing paper forms with the IRS, those are due on February 28, 2019. However, employers who choose to e-file have until April 1, 2019 to file with the IRS.

But what happens if you miss these deadlines?


The IRS assesses the following penalties for 2018 ACA reporting failures:

  • $2,320 per employee for violations of Employer Shared Responsibility Payment for Failure to Offer Minimum Essential Coverage mandated in Section 4980H(a).
  • $3,480 per employee – violations of Employer Shared Responsibility Payment for Failure to Offer Coverage that Meets Affordability and Minimum Value mandated in Section 4980H(a).
  • $260 per return – failure to file correct information returns in 2018. This penalty may double if the employer intentionally did not file returns.
  • $270 per return – for failing to send correct 1095-C statements to employees.

Employers can make the whole reporting process a little easier by having a good health care plan in place. Keep reporting deadlines in line the entire year by having policies in place to gather data needed for reporting instead of waiting until the last minute.

Meeting ACA Reporting Deadlines Doesn’t Have to Be Difficult.

Of course, there’s more to ACA Reporting than we can cover in a simple article. For example, not all employees may be counted as full-time employees under IRS guidelines.

At Hall Benefits Law, we work extensively with employees to adhere to applicable ACA reporting requirements and avoid costly penalties that can result in substantial harm to your business.  Please call 678-439-6236 to discuss your concerns with an experienced attorney. Our website contains more information about our firm, a Contact Form, and free resources for your review. From our home office in Georgia, we assist clients throughout the United States, from New York to California.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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