5 Critical ACA Updates Every Affected Employer Should Know
Applicable Large Employers (or ALEs) with 50 or more full-time or full-time equivalent employees must provide access to qualifying health coverage.
Just as important as providing proper coverage, employers must file 1095-C annual information returns with the IRS. Non-compliance can result in steep penalties, something every employer should be mindful of under current IRS laws.
Here’s a closer look at five critical factors regarding ACA compliance as we head into the upcoming tax-filing season:
An ALE may be penalized if it doesn’t offer minimum essential coverage (MEC) to at least 95% of its full-time employees and their dependents.
For calendar year 2025, the per-employee penalty for not offering MEC to eligible employees decreased to $2,900 annually per full-time employee (minus the first 30 full-time employees).
A second type of penalty may be imposed if you offer coverage, but it isn’t affordable or doesn’t provide the ACA standard for minimum value. This penalty has decreased to $4,350 annually per full-time employee who receives a premium tax credit for calendar year 2025.
In addition to satisfying the health coverage requirements, ALEs must report information to the IRS and send summary statements to employees upon request via the 1095-C form (and 1094-C transmittal). Late filing can result in a $340-$680 penalty (depending on the delay), per form.
Penalties are incurred per form, which includes the IRS information return and the recipient/employee statement. Therefore, if you fail to file a correct 1095-C with the IRS and don’t provide a correct statement to the recipient/employee, you may be subject to two penalties. And depending on the oversight, the maximum amount for the calendar year can reach into the millions.
During the initial years the ACA was enacted, the IRS withheld enforcement of ACA coverage and reporting requirements to give businesses time to adjust and prepare. Not anymore. The IRS is now sending out Letter 226J to notify employers of any penalty assessments. Fines have been substantial.
Although the employee mandate to have health insurance has been discontinued, the employer responsibility for ACA reporting is still required. The deadlines for filing are:
| Tax Forms | Recipient Deadline | Paper Filing Deadline | E-file Deadline |
| 1095-B, 1095-C | By request** | 3/2/2026 | 3/31/2026 |
| 1094-C | N/A | 3/2/2026 | 3/31/2026 |
** Issuers are no longer automatically required to furnish copies to recipients. However, if recipients request copies the issuer must comply. If requested prior to January 1, the issuer must furnish by January 31 (or next business day when January 31 falls on the weekend). If the request is made after January 1, the issuer must furnish by 30 days after requested. https://www.congress.gov/bill/118th-congress/house-bill/3797
Under the Taxpayer First Act, many businesses will no longer be able to submit paper forms and will have to file electronically instead. The current electronic filing threshold is more than 10 returns. If you need to submit more than 10 returns to the IRS of any type including ACA forms, 1098s, 1099s, W2s and Form 1042-S, then electronic filing is required.
You can ease your tax-filing burden by working with an online e-filing service such as efile4Biz. With this affordable and efficient service, you simply upload ACA form data (or complete the forms online) and we can do the rest — including e-filing the 1094 Authoritative Transmittal form and any 1095 forms with the IRS and, upon request, printing and mailing copies to employees.
Updated: 11/20/2025
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