What is ACA Reporting?

Affordable Care Act (ACA) reporting is a crucial compliance obligation employers face each year. A missed form, incorrect code, or filing error can create unnecessary compliance risk and result in potentially significant penalties. Yet many HR and benefits teams are still piecing together the process from scattered resources. 

ACA reporting is the annual process employers use to report information about health coverage offers to the IRS and provide required information to employees. This guide covers the fundamentals every employer needs to understand, regardless of the current reporting year: who must report, which forms are required, key filing deadlines, how the process works, common mistakes, and what can happen when requirements aren't met. 

2027 Quick Reference 

Expected 2027 federal ACA reporting deadlines for 2026 coverage, subject to confirmation in the final IRS instructions: 

• Forms 1095-C furnished under the standard furnishing method: March 2, 2027 
• Paper Forms 1094-C and 1095-C, for filers permitted to file on paper: March 1, 2027 
• Electronic Forms 1094-C and 1095-C: March 31, 2027 

ACA affordability percentage for 2027 plan years: 10.22% 

Section 4980H(a) employer shared responsibility payment: $3,780 

Section 4980H(b) employer shared responsibility payment: $5,670 

Sections 6721 and 6722 information-reporting penalties: Adjusted annually for inflation and potentially applicable separately to filing and furnishing failures; confirm the applicable amounts for returns and statements due in 2027 when the IRS publishes the relevant guidance. 

Important: Employers using the standard federal furnishing method must furnish Forms 1095-C by March 2, 2027. An employer using the alternative furnishing method may satisfy the federal requirement by posting the required website notice and furnishing a requested statement by the later of January 31, 2027, or 30 days after the request, provided all applicable IRS requirements are met. Separate state reporting and statement-delivery requirements may still apply. The particulars of the website notice should be confirmed against the final 2026 IRS instructions. The paper filing deadline applies only to filers permitted to file on paper. The 10.22% affordability percentage and Section 4980H amounts apply to plan or calendar years beginning in 2027, as applicable. 

Deadlines, affordability percentages, and penalty amounts can change from year to year. Always confirm current requirements with the IRS. 

• IRS Section 6056 reporting deadlines 
• IRS Revenue Procedure 2026-26: 2027 affordability percentage 
• IRS Revenue Procedure 2026-22: 2027 employer shared responsibility payment amounts 

What Is ACA Reporting? 

Sections 6055 and 6056 of the Affordable Care Act require annual reporting. Employers use these reports to provide the IRS with information about employees and the health coverage offered to them. 

The reporting helps the IRS administer the employer shared responsibility provisions and premium tax credit rules, including determining whether full-time employees were offered minimum essential coverage that was affordable and provided minimum value. 

For employers, ACA reporting generally means collecting information about employee status and health coverage, determining the appropriate reporting codes, generating required forms, furnishing employee statements, and filing information with the IRS. 

It is important to distinguish federal ACA reporting from other employer compliance obligations. Federal ACA reporting is separate from routine payroll tax filings. In addition, some states and the District of Columbia impose their own health coverage reporting or statement requirements, which may impose different deadlines and may overlap with other HR, payroll, and benefits processes. 

State mandate callout: California, the District of Columbia, Massachusetts, New Jersey, Rhode Island and Vermont have enacted individual health coverage mandates, but their employer reporting requirements are not uniform. Depending on the jurisdiction, an employer’s obligations may be based on employee residency, the type of coverage offered, whether the plan is fully insured or self-insured, the accepted form and file format and state-specific filing or statement-delivery deadlines. Some jurisdictions accept federal Form 1095 data, while Massachusetts uses a different reporting framework and Vermont does not impose the same employer 1095 filing obligation. Employers should identify where covered individuals reside, confirm responsibilities with their carrier or reporting vendor, and review current state guidance before filing. 

Related: Sections 6055 & 6056 IRS Reporting Compliance 

Federal changes to Form 1095-C furnishing do not eliminate separate state reporting or statement-delivery requirements. Employers should review the rules that apply in each state where they have reporting obligations before relying on the federal alternative furnishing method. 

Understanding the basic reporting framework is the first step. The next question is determining whether your organization is actually required to report. 

Who Must Report? Understanding ALE Status 

One of the most important ACA reporting requirements for employers is determining whether the organization is an Applicable Large Employer (ALE). 

Generally, an employer is considered an ALE if it had an average of at least 50 full-time employees and full-time equivalent employees (FTEs) during the prior calendar year. ALE status determines whether an employer is subject to the ACA's employer shared responsibility provisions and associated reporting requirements. 

The FTE calculation includes both full-time employees and the hours of service of employees who were not full-time for the month. 

A simplified approach to determining FTEs is: 

1. For each calendar month, count employees who averaged at least 30 hours of service per week or 130 hours of service for the month. 
2. Combine the hours of service of employees who were not full-time for that month, counting no more than 120 hours for any one employee, and divide the total by 120. 
3. Add the resulting full-time-equivalent count to the number of full-time employees for the month. 
4. After completing the calculation for all 12 months, add the monthly totals, divide by 12, and apply the applicable rounding rule to determine ALE status. 
5. Employers also need to consider controlled group rules. Organizations under common ownership or control may need to be aggregated when determining ALE status, even when they operate as separate legal entities. 

Related: How Controlled Group Rules Under ACA Impact Smaller Employers 

Not sure if you're an ALE? 

Use this quick checklist: 

• Did your organization have close to 50 or more full-time employees? 
• Did you account for full-time equivalent employees when counting your workforce? 
• Did you review employee counts for the prior calendar year? 
• Does your organization have related companies or entities under common ownership? 
• Have you documented how your ALE determination was made? 

If you're near the threshold or have a complex corporate structure, consider consulting qualified legal or tax counsel to determine your obligations under the ACA. 

What Forms Are Required for ACA Reporting? 

The forms an employer needs depend in part on its size, workforce, and whether it sponsors a self-insured health plan. 

For applicable large employers, the primary forms are: 

Form 1095-C 

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is the employee statement. ALEs generally must furnish a Form 1095-C to each full-time employee for whom reporting is required. 

The form provides information about the health coverage offered to the employee, including coverage information for each month of the reporting year. 

Form 1094-C 

Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, is the employer's transmittal form. It provides the IRS with summary information about the employer's filing and accompanies the organization's Forms 1095-C. 

Together, Forms 1094-C and 1095-C give the IRS information needed to administer the ACA employer reporting requirements. 

A non-ALE sponsor of a self-insured plan that provides minimum essential coverage generally has Section 6055 reporting obligations involving Forms 1094-B and 1095-B, subject to applicable exceptions. 

The 1095-C also includes monthly codes that communicate information about an employee's offer of coverage and, where applicable, an affordability safe harbor. Correct coding is therefore a critical part of the reporting process. 

Because reporting codes can depend on an employee's circumstances and coverage status, employers should avoid treating 1095-C coding as a one-size-fits-all exercise. 

When Are ACA Reporting Deadlines? 

ACA reporting deadlines follow a recurring annual pattern, although the exact dates can shift from year to year. 

Generally: 

• Employee statements: Forms 1095-C are furnished to employees by early March. 
• Paper IRS filings: Employers filing on paper generally need to file by early March. 
• Electronic IRS filings: Electronic filings are generally due by late March. 

Employers should pay particular attention to electronic filing requirements. Electronic filing is generally required when a filer is required to file 10 or more covered information returns in the aggregate during the calendar year, subject to applicable IRS rules and available waivers. Required electronic filings are submitted through the Affordable Care Act Information Returns (AIR) system. 

2027 ACA Reporting Deadlines 

Expected 2027 federal ACA reporting deadlines for 2026 coverage, subject to confirmation in the final IRS instructions: 

• Forms 1095-C furnished under the standard furnishing method: March 2, 2027 
• Paper Forms 1094-C and 1095-C, for filers permitted to file on paper: March 1, 2027 
• Electronic Forms 1094-C and 1095-C: March 31, 2027 

Always confirm current requirements with the IRS. 

• IRS Section 6056 reporting deadlines 
• IRS Revenue Procedure 2026-26: 2027 affordability percentage 
• IRS Revenue Procedure 2026-22: 2027 employer shared responsibility payment amounts 

How to File ACA Reports: A Step-by-Step Process 

Although ACA reporting can become complex, the basic workflow is relatively consistent. 

1. Gather employee and coverage data. Start by collecting the information needed to complete the applicable forms. This may include employee status, hours, coverage offers, enrollment information, and other data from HRIS, payroll, and benefits systems. 
2. Determine reporting requirements. Confirm which employees require reporting and which forms apply to your organization. This step should account for ALE status, employee classifications, coverage arrangements, and other relevant circumstances. 
3. Assign monthly 1095-C codes. Determine the appropriate codes for each applicable employee and month, including the offer of coverage and applicable affordability safe harbor information. 
4. Generate employee statements and transmittal forms. Use ACA reporting software, an HR/payroll platform, or a managed compliance service to generate the required forms. 
5. Furnish statements to employees. Under the standard federal furnishing method, affirmatively furnish required employee statements by the applicable deadline and retain documentation of furnishing. If using the federal alternative furnishing method, post the required website notice and furnish requested statements within the applicable timeframe, while separately addressing any state reporting or statement-delivery requirements. 

6. File with the IRS and applicable states. Submit the applicable forms to the IRS and, where required, to applicable state agencies using the required filing methods and state-specific deadlines. Employers subject to federal electronic filing requirements should use the IRS Affordable Care Act Information Returns (AIR) system. 

   The key is to treat ACA reporting as an ongoing data and compliance process rather than a once-a-year paperwork exercise. The more consistently employee and benefits data is reviewed, the easier it becomes to identify discrepancies before forms are generated. 

Common ACA Reporting Errors 

ACA reporting errors are often preventable when employers build review steps into the process. 

Missing or incorrect 1095-C codes 

Incorrect Line 14 or Line 16 codes can create reporting discrepancies. 

Prevention tip: Review monthly offers and safe harbor coding against employee status and coverage data before forms are finalized. 

Failing to report for all eligible employees 

Overlooking an employee who should receive a form can create a compliance issue. 

Prevention tip: Reconcile the reporting population against HRIS and payroll records before filing. 

Late filing or furnishing 

Missing an IRS or employee deadline can expose an employer to penalties. 

Prevention tip: Establish an internal deadline well ahead of the applicable IRS and employee deadlines. 

Misclassifying full-time and part-time employees 

An incorrect employee classification can affect both ALE determinations and individual reporting requirements. 

Prevention tip: Review hours and employee classifications using a consistent methodology. 

Ignoring controlled group aggregation 

Related companies may need to be considered together when determining ALE status. 

Prevention tip: Review corporate ownership and control relationships as part of the annual ALE determination. 

The common thread is data accuracy. ACA reporting depends on information coming together from multiple systems and teams, so reconciliation is an important part of the process. 

ACA Penalties: What's at Stake? 

ACA compliance failures can have financial consequences, but the applicable penalty depends on the type of requirement that was not met. 

Under Section 4980H(a), an employer shared responsibility payment may apply when an applicable large employer fails to offer minimum essential coverage to at least 95% of its full-time employees and their dependents, subject to applicable special rules. 

Under Section 4980H(b), a different penalty structure can apply when an employer offers coverage but the coverage does not meet applicable requirements for affordability or minimum value for an employee who receives a premium tax credit. 

The ACA also establishes reporting penalties under Sections 6055 and 6056. These are generally per-return penalties that are adjusted periodically for inflation, so employers should consult the IRS for current amounts rather than relying on figures published in an evergreen article. 

What Is Letter 226J? 

Letter 226J is an IRS notice that can be sent to an applicable large employer when the IRS proposes an employer shared responsibility payment. 

Receiving a Letter 226J does not necessarily mean the proposed assessment is correct. Employers should carefully review the information underlying the notice, compare it with their records, and follow the IRS response process and applicable deadlines. 

Penalty amounts and the affordability percentage are adjusted over time. See the IRS ACA penalty guidance for current figures. 

Getting Support for ACA Reporting 

ACA reporting doesn't have to become a last-minute scramble. 

The Benefitfocus ACA Compliance Solution is designed to help employers manage the complexities of ACA reporting with greater accuracy and less manual work. By helping bring together the data, processes, and expertise required for reporting, the solution can help benefits and HR teams spend less time managing spreadsheets and more time supporting employees. 

The goal is straightforward: make ACA compliance more manageable by helping your team stay organized, identify potential issues, and complete required reporting with confidence. 

Request a demo of the Benefitfocus ACA Compliance Solution to learn how to ensure compliance while freeing up your team’s time. 

Frequently Asked Questions About ACA Reporting 

What is ACA reporting? 

ACA reporting is the annual process employers use to report information about health coverage offers to the IRS and provide required statements to employees. The requirements are primarily established under Sections 6055 and 6056 of the Affordable Care Act. 

Who is required to do ACA reporting? 

Applicable Large Employers, generally those with at least 50 full-time employees and full-time equivalent employees based on the prior calendar year's calculation, are subject to ACA employer reporting requirements. A non-ALE sponsor of a self-insured plan that provides minimum essential coverage generally has Section 6055 reporting obligations, subject to applicable exceptions. 

What forms do employers need for ACA reporting? 

ALEs generally use Forms 1094-C and 1095-C. A non-ALE sponsor of a self-insured plan that provides minimum essential coverage generally uses Forms 1094-B and 1095-B, subject to applicable exceptions. 

When are ACA reporting deadlines? 

Employee statements are generally furnished by early March, while IRS filings are generally due in late winter for paper filers and late March for electronic filers. Because exact deadlines can change, check the Current-Year Quick Reference above and confirm the current dates with the IRS. 

What happens if an employer doesn't file ACA reports? 

Failure to meet ACA reporting requirements can result in reporting penalties, and other ACA compliance failures may result in employer shared responsibility penalties. The specific consequences depend on the type of failure and applicable circumstances. 

Do small employers have to do ACA reporting? 

Not every small employer has the same ACA reporting obligations. Employers below the ALE threshold generally aren't subject to the ALE reporting requirements. However, a non-ALE sponsor of a self-insured plan that provides minimum essential coverage generally has Section 6055 reporting obligations, subject to applicable exceptions. 

Stay Ahead of ACA Reporting Requirements 

ACA reporting is a recurring compliance responsibility, but it doesn't have to be overwhelming. The process starts with determining whether your organization is an ALE, understanding which forms apply, gathering accurate employee and coverage data, reviewing 1095-C coding, and meeting the applicable filing and furnishing deadlines. 

The right systems and processes can make that work more manageable—and help your team address potential issues before they become compliance problems. 

For a deeper look at the requirements, processes, and best practices involved, download The Definitive Guide to ACA Reporting.