By: HUB’s EB Compliance Team

Instructions for the latest sets of Affordable Care Act (“ACA”) reporting forms have been released. They only note one change from the prior year: nearly all (if not all) employers filing these forms must file them electronically.

Instructions

When the IRS releases new instructions for annually-filed forms, the instructions usually contain a section entitled “What’s New” to highlight any changes from the prior year. This year, the instructions for both the Forms 1094/1095-C and 1094/1095-B contained the same statement:

The electronic-filing threshold for information returns required to be filed on or after January 1, 2024, has been decreased to 10 or more returns. See Electronic Filing, later.

This is a result of the change in IRS regulations that HUB discussed here. Note that the 10-return threshold can be met by a combination of various information returns, including W-2s, 1098 and 1099 series forms, and the ACA reporting forms. As a result, it is highly unlikely (if not impossible) that any employer filing Forms 1094/1095-B or C will qualify to use paper filing.

Who Must File

As a reminder the Forms 1094/1095-C forms must be filed by “applicable large employers.” These are employers that generally have more than 50 full-time and full-time equivalent employees in the prior year. For this purpose, certain related companies (called “controlled groups”) are considered together. More detail is available in HUB’s articles here.

The 1094/1095-B forms are filed by self-funded employers who are not applicable large employers, among other coverage providers. Given the risks inherent in self-funding, most smaller employers that are self-funded will still likely exceed the 10-return threshold for filing electronically.

How to File

To file electronically, employers will either need to work with their payroll providers or other vendors to file on their behalf or sign up for the IRS e-File system themselves. The electronic filing system for the IRS contains special formatting requirements that are different from the paper files. More details on electronic filing are in IRS Publications 5164 and 5165.

As a practical matter, employers that have not filed electronically previously will likely engage with their payroll providers or other vendors to do this on their behalf. The good news is that electronically filed forms are due by the end of March (April 1 next year since March 31 is a Sunday) while paper forms are due at the end of February. While this additional time is helpful, employers that have not already established how they will file the forms electronically would likely want to start soon to get that in place.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.