Employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 or 6056 should prepare to comply with reporting deadlines in early 2024. For the 2023 calendar year, covered employers must:
- Furnish statements to individuals by March 1, 2024 (an alternative method of furnishing statements to covered individuals is available in certain situations); and
- File returns with the IRS by Feb. 28, 2024, or April 1, 2024, if filing electronically. Beginning in 2024, employers that file at least 10 returns during the calendar year must file electronically.
Penalties may apply if employers are subject to ACA reporting and fail to file returns and furnish statements by the applicable deadlines.
Individual statements for 2023 must be furnished within 30 days of January 31, 2024. Because 2024 is a leap year, the deadline for individual statements is March 1, 2024. In addition, electronic IRS returns for 2023 must be filed by March 31, 2024. However, since this is a Sunday, electronic returns must be filed by the next business day, which is April 1, 2024.
What Employers Are Covered Under ACA Sections 6055 and 6056
The following employers are subject to ACA reporting under Sections 6055 and 6056:
- Employers with self-insured health plans (Section 6055 reporting)
- Applicable large employers (ALEs) with either fully insured or self-insured health plans (Section 6056 reporting)
ALEs are employers with 50 or more full-time employees (including full-time equivalent employees) during the preceding calendar year. Note that ALEs with self-funded plans are required to comply with both reporting obligations. However, to simplify the reporting process, the IRS allows ALEs with self-insured plans to use a single combined form to report the information required under both Sections 6055 and 6056.
Section 6055 and 6056 Reporting
Section 6055 applies to providers of minimum essential coverage (MEC), such as health insurance issuers and employers with self-insured health plans. These entities generally use Forms 1094-B and 1095-B to report information about the coverage they provided during the previous year.
Section 6056 applies to ALEs—generally, those employers with 50 or more full-time employees, including full-time equivalents, in the previous year. ALEs use Forms 1094-C and 1095-C to report information relating to the health coverage that they offer (or do not offer) to their full-time employees.
Employers reporting under both Sections 6055 and 6056—specifically, ALEs with self-insured plans—use a combined reporting method by filing Forms 1094-C and 1095-C.
New Electronic Filing Threshold
There is a new electronic filing threshold for information returns required to be filed on or after January 1, 2024, which has been decreased to 10 or more returns (originally, the threshold was 250 or more returns). Specifically, the instructions for 2023 returns (filed in 2024) provide the following clarifications and reminders:
- The 10-or-more requirement applies in the aggregate to certain information returns. Accordingly, a reporting entity may be required to file fewer than 10 of the applicable Form 1094 and 1095, but still have an electronic filing obligation based on other kinds of information returns filed (e.g., Forms W-2 and 1099).
- The electronic filing requirement does not apply to those reporting entities that request and receive a hardship waiver; however, the IRS encourages electronic filing even if a reporting entity is filing fewer than 10 returns.
- The formatting directions in the instructions are for the preparation of paper returns. When filing forms electronically, the formatting set forth in the “XML Schemas” and “Business Rules” published on IRS.gov must be followed rather than the formatting directions in the instructions. For more information regarding electronic filing, see IRS Publications 5164 and 5165.
Connect with a UNICO Employee Benefits Advisor for more information.
This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2022-2023 Zywave, Inc. All rights reserved.
