ACA Reporting Update: Federal Changes for 1095 Forms

Under the Affordable Care Act (ACA), employers and insurers must file information returns with the IRS and provide employees with copies. This requirement includes:

• Form 1095-C – Used by applicable large employers (ALEs) with 50 or more full-time employees to report health coverage.

• Form 1095-B – Used by small employers with self-insured plans or insurers reporting minimum essential coverage (MEC).

Both forms must be transmitted with Form 1094-B or Form 1094-C when filed with the IRS. To learn more, visit our ACA 1095-C software page.

What’s New Federally?

1. 10-Form E-Filing Threshold
As of tax year 2023 (filed in 2024), the IRS requires electronic filing if you submit 10 or more information returns in total. This rule applies to all filers, including those submitting Forms 1099, W-2, and ACA forms. Because paper filing is now rare, electronic filing has become the standard. See our 1099 e-file guide for more details.

2. Elimination of Good-Faith Relief
Previously, filers could avoid penalties for incorrect or incomplete ACA forms if they showed good-faith efforts. However, this relief ended in tax year 2021. As a result, accuracy is now more important than ever, since even small mistakes can result in IRS penalties. To avoid errors, review our Form 1095-C coding guide.

3. Form 1095-B Relief for Insurers
Insurers and small self-insured employers can post a notice on their website instead of mailing individual 1095-B forms. However, if a recipient requests a form, you must provide it within 30 days. This rule helps reduce mailing costs but still ensures individuals can access their forms.

Why Compliance Matters

The IRS enforces strict penalties for late or incorrect ACA filings. By adopting electronic filing, employers can:

• Stay compliant with the latest ACA reporting rules.

• Reduce the risk of penalties.

• Simplify the entire submission process.

👉 Learn how 1095 FIRE software can help you e-file quickly, accurately, and securely.