# ACA reporting requirements. Forms, deadlines and penalties for employers.

Source: https://ethosbenefits.com/benefits-101/aca-reporting
Type: Benefits 101
Topic: ACA reporting
Author: Chelsea Ryckis, Founder and President
Reviewed by: Patrick Ansara, Partner and Director of Client Operations
Publisher: Ethos Benefits
Published: 2026-02-19
Last updated: 2026-11-03
Cite as: "ACA reporting requirements," Ethos Benefits, https://ethosbenefits.com/benefits-101/aca-reporting, updated 2026-11-03.

**Short answer:** ACA reporting is the yearly filing that tells the IRS what health coverage an employer offered or provided. Employers with 50 or more full-time employees, including equivalents, file Forms 1094-C and 1095-C. Insurers and small self-insured employers file Forms 1094-B and 1095-B. Returns are due February 28 on paper or March 31 electronically.

ACA reporting is how the IRS checks two things: whether people had health coverage, and whether large employers offered the coverage the employer mandate requires. If your business had 50 or more full-time employees, including full-time equivalents, last year, you are an [applicable large employer (ALE)](https://www.irs.gov/affordable-care-act/employers/determining-if-an-employer-is-an-applicable-large-employer) and you file every year, even if you offered no coverage at all.

This page is the overview. Each form and topic has its own page, linked below.

## What is ACA reporting?

ACA reporting is the annual set of information returns employers and insurers send to the IRS, with copies to employees and covered individuals. Section 6056 of the Internal Revenue Code covers what ALEs report about offers of coverage. Section 6055 covers what insurers and self-insured plans report about who was covered.

The returns serve three purposes:

- **They show whether you met the employer mandate** under section 4980H, which requires ALEs to offer affordable, minimum value coverage to full-time employees.
- **They let the IRS check premium tax credit claims.** A full-time employee who bought Marketplace coverage with a premium tax credit can trigger a penalty for the employer, and the 1095-C is how the IRS sees what that employee was offered.
- **They give employees a record** of the coverage offered or provided, in case the IRS or a state asks.

## Who counts as an applicable large employer?

You are an ALE for the current year if you averaged 50 or more full-time employees, including full-time equivalents, during the prior calendar year. A full-time employee averages at least 30 hours of service a week, or 130 hours a month.

To count full-time equivalents, add the hours of service of your employees who are not full time for each month (counting no more than 120 hours for any one person) and divide by 120. Add that number to your full-time count for each month, then average the 12 months. Related companies under common control are counted together as one aggregated ALE group, but each member files its own returns.

## Which form do I file?

The form depends on two things: whether you are an ALE, and whether your plan is fully insured or self-insured.

| Employer type | What you file | What the insurer files | Notes |
| --- | --- | --- | --- |
| **ALE, fully insured plan** | Forms 1094-C and 1095-C, Parts I and II only | Forms 1094-B and 1095-B for everyone enrolled | Leave Part III of Form 1095-C blank |
| **ALE, self-insured plan** | Forms 1094-C and 1095-C, including Part III | Nothing for this plan | Part III lists everyone enrolled, including part-time employees and their families |
| **Small employer, self-insured plan** | Forms 1094-B and 1095-B | Nothing for this plan | No employer mandate, but you still report who was covered |
| **Small employer, fully insured plan** | No federal ACA filing | Forms 1094-B and 1095-B | Check whether your state has its own reporting |
| **Health insurer** | Forms 1094-B and 1095-B for insured coverage | Not applicable | Marketplace coverage is reported on Form 1095-A instead |

Form 1094-C is the transmittal that summarizes your filing for the IRS. [Form 1095-C](https://ethosbenefits.com/benefits-101/form-1095-c) is the per-employee statement. [Form 1095-B](https://ethosbenefits.com/benefits-101/form-1095-b) reports coverage, not offers. For how the two compare, see [1095-B vs. 1095-C](https://ethosbenefits.com/benefits-101/1095-b-vs-1095-c). If an employee received a 1095-A from the Marketplace as well as your 1095-C, see [1095-A vs. 1095-C](https://ethosbenefits.com/benefits-101/1095-a-vs-1095-c).

## What does the 1095-C report?

Form 1095-C tells the IRS, month by month, what you offered each full-time employee and what it cost. To avoid a penalty, an ALE must:

1. **Offer minimum essential coverage to at least 95% of full-time employees** and their dependent children.
2. **Make sure the coverage provides minimum value,** meaning the plan pays at least 60% of the total allowed cost of benefits.
3. **Keep the coverage affordable.** The employee's share for the lowest-cost self-only option cannot exceed the required contribution percentage: **9.02% of household income for 2025** and **9.96% for 2026.** Because employers don't know household income, most use one of the IRS safe harbors (Form W-2 wages, rate of pay or federal poverty line), reported with a code on line 16. See [ACA affordability safe harbors](https://ethosbenefits.com/benefits-101/aca-affordability-safe-harbor).

Line 14 shows the offer of coverage, line 15 shows the employee required contribution, and line 16 shows the safe harbor or relief code. A self-insured ALE also completes Part III with each covered person.

## When is ACA reporting due?

The IRS deadlines are February 28 for paper filing and March 31 for electronic filing, with statements due to individuals January 31 plus an automatic 30-day extension. When a date falls on a weekend or legal holiday, it moves to the next business day.

| Deadline | Tax year 2025 (filed in 2026) | Tax year 2026 (filed in 2027, per IRS draft instructions) |
| --- | --- | --- |
| **Furnish Forms 1095-B and 1095-C to individuals** | March 2, 2026 | March 2, 2027 |
| **Post the furnish-on-request notice, if used** | By March 2, 2026, kept up through October 15, 2026 | By March 2, 2027, kept up through October 15, 2027 |
| **File with the IRS on paper** | March 2, 2026 | March 1, 2027 |
| **File with the IRS electronically** | March 31, 2026 | March 31, 2027 |

A few rules to keep in mind:

- **E-filing is required at 10 or more returns,** counted in the aggregate across Forms W-2, 1099, 1095 and other information returns. ALEs file through the IRS ACA Information Returns (AIR) system, directly or through a transmitter.
- **Form 8809 gives an automatic 30-day extension to file** with the IRS if submitted by the due date. There is no further extension for furnishing statements, because the 30 days are already built in.
- **Keep your records** for at least six years, the window the IRS now has to assess an employer mandate penalty.

## What changed in December 2024?

Two laws signed on December 23, 2024 changed ACA reporting for returns due after December 31, 2024.

| Change | Law | What it means for you |
| --- | --- | --- |
| **Furnish on request** | Paperwork Burden Reduction Act (Pub. L. 118-167) | You no longer have to mail Forms 1095-B or 1095-C automatically. Post a clear, conspicuous website notice by the furnishing deadline, keep it up through October 15, and send a form within 30 days of a request (IRS Notice 2025-15). This applies to full-time employees too |
| **Electronic delivery consent** | Paperwork Burden Reduction Act (Pub. L. 118-167) | Once an individual affirmatively consents to electronic statements, the consent carries forward until revoked in writing |
| **Date of birth for missing TINs** | Employer Reporting Improvement Act (Pub. L. 118-168) | If you can't collect a covered person's SSN or other TIN, you may report full name and date of birth instead |
| **90 days to answer Letter 226-J** | Employer Reporting Improvement Act (Pub. L. 118-168) | The IRS must give an ALE at least 90 days from the first letter proposing a 4980H penalty to respond |
| **Six-year limit on 4980H assessments** | Employer Reporting Improvement Act (Pub. L. 118-168) | The IRS has six years from the 1094-C and 1095-C due date, or the filing date if later, to assess an employer mandate penalty |

The six-year clock starts only when the return is due or filed, whichever is later. An ALE that never files leaves the window open.

## What are the penalties for late or incorrect returns?

Late, missing or incorrect returns are penalized under section 6721, and late or incorrect statements to employees under section 6722. The two penalties are separate, so one bad Form 1095-C can be penalized twice: once for the IRS copy and once for the employee's copy.

| Penalty per return or statement | Returns due in 2026 (tax year 2025) | Returns due in 2027 (tax year 2026) |
| --- | --- | --- |
| **Corrected within 30 days of the due date** | $60, capped at $683,000 a year | $60, capped at $698,500 a year |
| **Corrected after 30 days but by August 1** | $130, capped at $2,049,000 a year | $130, capped at $2,095,500 a year |
| **Not corrected by August 1, or never filed** | $340, capped at $4,098,500 a year | $340, capped at $4,191,500 a year |
| **Intentional disregard** | $680 or more, no cap | $690 or more, no cap |

Lower annual caps apply to businesses with average gross receipts of $5 million or less. Failing to e-file when you are required to is treated as failing to file. The IRS proposes these penalties on Letter 972CG, and it sends Letter 5699 to employers it believes are ALEs that did not file.

## How does reporting connect to the employer mandate?

The section 4980H employer mandate penalties are separate from reporting penalties, but the 1095-C is the evidence the IRS uses to decide whether you owe them. The IRS matches your line 14 to 16 codes against premium tax credit claims. If a full-time employee received a credit and your codes don't show a qualifying offer, the IRS sends Letter 226-J proposing a penalty.

| Employer mandate penalty | What triggers it | 2025 amount | 2026 amount |
| --- | --- | --- | --- |
| **4980H(a)** | Coverage not offered to at least 95% of full-time employees, and at least one full-time employee gets a premium tax credit | $2,900 a year for each full-time employee, minus the first 30 | $3,340 a year for each full-time employee, minus the first 30 |
| **4980H(b)** | Coverage offered, but not affordable or not minimum value for a full-time employee who gets a premium tax credit | $4,350 a year for each such employee | $5,010 a year for each such employee |

Both amounts are figured monthly at one-twelfth of the annual figure. The 4980H(b) penalty can never exceed what the 4980H(a) penalty would have been.

This is why accurate reporting matters beyond the $340 per form. A wrong code on line 14 or 16 can make a compliant offer look like no offer at all, and the resulting Letter 226-J can propose thousands of dollars per employee. You now have at least 90 days to respond, and correcting the codes with documentation is usually how a proposed assessment gets reduced.

## The reporting process, step by step.

1. **Confirm your ALE status** using last year's monthly full-time and full-time equivalent counts, and keep the calculation.
2. **Track hours all year,** including variable-hour and seasonal employees, so you know who is full time each month.
3. **Collect employee and dependent data:** names, addresses, SSNs, and dates of birth where an SSN is missing.
4. **Document each offer of coverage** and the employee's cost for the lowest-cost self-only option, and pick the affordability safe harbor you will use.
5. **Complete Forms 1095-C and 1094-C,** coding lines 14 to 16 for every month.
6. **Furnish statements or post the request notice** by the furnishing deadline.
7. **File with the IRS,** electronically through AIR if you have 10 or more returns in aggregate, and check the acknowledgment for errors.

Payroll systems and dedicated vendors can automate much of this. See [ACA reporting software](https://ethosbenefits.com/benefits-101/aca-reporting-software) for what to look for.

## Common reporting mistakes.

- **Bad employee data.** Missing or wrong SSNs, names and addresses cause rejected returns and penalty notices. Validate data before filing season, not during it.
- **Misclassified full-time status.** Inaccurate hours tracking leads to wrong offer codes and, eventually, Letter 226-J.
- **Wrong line 14 to 16 codes.** The codes must match what was actually offered and the safe harbor you actually used.
- **Paper filing when e-filing is required.** The threshold is 10 returns in aggregate, not 250 as it once was.
- **Ignoring IRS letters.** Letters 226-J, 972CG and 5699 all have response deadlines. Assign one owner, usually in HR or finance, to track and answer them.
- **Starting in February.** Reporting is a year-round data job. Review offers and hours quarterly so the forms nearly fill themselves in January.

Ethos Benefits helps employers review coverage offers, codes and IRS letters through its [ACA compliance work](https://ethosbenefits.com/services/aca-compliance).

## Frequently asked questions

### Which employers have to file ACA reports?

Applicable large employers, meaning those with an average of 50 or more full-time employees, including full-time equivalents, in the prior calendar year, file Forms 1094-C and 1095-C. Small employers with self-insured plans file Forms 1094-B and 1095-B, and small employers with fully insured plans have no federal ACA reporting because the insurer files.

### Do employers have to file ACA reports if they don't offer health insurance?

Yes, if they are applicable large employers. An employer with 50 or more full-time employees, including equivalents, files Forms 1094-C and 1095-C every year even when it offers no coverage, and reports code 1H (no offer) on line 14. That filing also exposes it to the 4980H(a) penalty if any full-time employee receives a premium tax credit.

### What codes are used for ACA reporting?

Form 1095-C uses two code series. Line 14 codes start with 1 and describe the offer, such as 1A for a qualifying offer, 1E for minimum value coverage offered to the employee, spouse and dependents, and 1H for no offer. Line 16 codes start with 2 and explain the month, such as 2C for enrolled and 2F, 2G and 2H for the affordability safe harbors.

### Are part-time employees included in ACA reporting?

Their hours count toward deciding whether you are an applicable large employer. A large employer generally files Form 1095-C only for employees who were full time in any month, but a self-insured large employer also reports part-time employees and others who enrolled in the plan, using code 1G on line 14 for anyone never full time that year.

### Is ACA reporting required for remote employees?

Yes. An applicable large employer reports every full-time employee on Form 1095-C wherever that person works, including remote employees in other states. Remote employees' hours count toward full-time status and toward the employer's ALE calculation the same way as on-site hours. Employers with remote staff should also check whether a state where those employees live has its own coverage reporting.

### Do employers still have to mail Form 1095-C to every full-time employee?

No. Under the Paperwork Burden Reduction Act and IRS Notice 2025-15, an employer can instead post a clear, conspicuous website notice by the furnishing deadline, keep it up through October 15, and send a form within 30 days of any request. Employers can also deliver forms electronically to employees who consented, and that consent carries forward until revoked.

### Can ACA reporting errors be corrected after filing?

Yes. File corrected returns and furnish corrected statements as soon as you find the error. Penalties for incorrect returns drop to $60 per return if you correct within 30 days of the due date and $130 if you correct by August 1. Correcting codes early also matters because the IRS uses them to decide whether to send a Letter 226-J.

## Sources

1. [Instructions for Forms 1094-C and 1095-C (2025)](https://www.irs.gov/instructions/i109495c), Internal Revenue Service
2. [2026 Instructions for Forms 1094-C and 1095-C (early release draft)](https://www.irs.gov/pub/irs-dft/i109495c--dft.pdf), Internal Revenue Service
3. [Instructions for Forms 1094-B and 1095-B (2025)](https://www.irs.gov/instructions/i109495b), Internal Revenue Service
4. [Notice 2025-15, Alternative Manner of Furnishing Certain Health Insurance Coverage Statements](https://www.irs.gov/pub/irs-drop/n-25-15.pdf), Internal Revenue Service
5. [Determining if an employer is an applicable large employer](https://www.irs.gov/affordable-care-act/employers/determining-if-an-employer-is-an-applicable-large-employer), Internal Revenue Service
6. [Rev. Proc. 2024-40 (inflation adjustments, including section 6721 and 6722 penalties for returns due in 2026)](https://www.irs.gov/pub/irs-drop/rp-24-40.pdf), Internal Revenue Service
7. [Rev. Proc. 2025-32 (inflation adjustments, including section 6721 and 6722 penalties for returns due in 2027)](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf), Internal Revenue Service
8. [Rev. Proc. 2024-14 (section 4980H amounts for 2025)](https://www.irs.gov/pub/irs-drop/rp-24-14.pdf), Internal Revenue Service
9. [Rev. Proc. 2025-26 (section 4980H amounts for 2026)](https://www.irs.gov/pub/irs-drop/rp-25-26.pdf), Internal Revenue Service
10. [Rev. Proc. 2024-35 (required contribution percentage for 2025)](https://www.irs.gov/pub/irs-drop/rp-24-35.pdf), Internal Revenue Service
11. [Rev. Proc. 2025-25 (required contribution percentage for 2026)](https://www.irs.gov/pub/irs-drop/rp-25-25.pdf), Internal Revenue Service
12. [26 U.S. Code § 4980H, Shared responsibility for employers regarding health coverage](https://www.law.cornell.edu/uscode/text/26/4980H), Legal Information Institute, Cornell Law School
13. [26 U.S. Code § 6056, Certain employers required to report on health insurance coverage](https://www.law.cornell.edu/uscode/text/26/6056), Legal Information Institute, Cornell Law School
14. [26 U.S. Code § 6501, Limitations on assessment and collection](https://www.law.cornell.edu/uscode/text/26/6501), Legal Information Institute, Cornell Law School