- On January 13, 2026
The Affordable Care Act (ACA) reporting remains a significant compliance challenge for employers. Despite being in effect for many years, the rules remain detailed and highly technical, and even seasoned employers can encounter difficulties. Avoiding common reporting errors is essential to maintaining compliance and minimizing exposure to IRS penalties.
IRS Filing Best Practices
As a baseline, the IRS advises employers to:
- Complete ACA returns using accurate and consistent information;
- Submit information returns electronically by the March 31, 2026, deadline;
- Request an electronic filing waiver when appropriate; and
- Apply for a filing extension if needed and ensure submission by the extended deadline.
Keeping these general requirements in mind, employers should also take steps to prevent the most frequent ACA reporting mistakes, outlined below.
Tip 1: Confirm the Legal Business Name and EIN Match
Employers should verify that the legal business name reported on ACA forms exactly matches the name associated with the Employer Identification Number (EIN) as recorded in IRS records. This information should align with official documentation such as tax filings or formation records. Any inconsistencies should be corrected before filing to prevent rejections, delays, or penalties tied to inaccurate information.
Tip 2: Properly Identify Aggregated ALE Groups
Each Applicable Large Employer (ALE) that is part of a controlled or affiliated group—known as an Aggregated ALE Group—has independent ACA reporting obligations. Every ALE member must file Forms 1094-C and 1095-C using its own EIN and must provide Form 1095-C to its full-time employees, even if that individual employer has fewer than 50 full-time employees.
If the combined workforce of the group averaged at least 50 full-time employees (including full-time equivalents) during the prior calendar year, the group qualifies as an ALE, and each entity within the group is treated as an ALE member for reporting purposes.
Smaller employers often overlook reporting duties when they are part of a larger controlled group, which can result in unexpected penalties. Additionally, mergers, acquisitions, or changes in ownership during the year must be accurately reflected in ACA filings.
Tip 3: Monitor Employee Full-Time Status Carefully
Correctly identifying full-time employees is critical for both ACA “pay-or-play” compliance and accurate reporting. Under ACA rules, an employee is considered full-time for a given month if they average at least 30 hours of service per week or 130 hours of service in that month.
Employers may use different definitions of full-time status for payroll or internal policy purposes, but ACA compliance is based strictly on the IRS definition. Because coverage and reporting are evaluated on a month-by-month basis, employers must track employee hours and status throughout the entire calendar year.
ALEs determine full-time status using either:
- The monthly measurement method, which evaluates hours each month; or
- The look-back measurement method, which determines status based on hours worked during a defined measurement period.
Using the wrong method or misapplying measurement periods can lead to employee misclassification, missed coverage offers, and reporting inaccuracies.
Tip 4: Accurately Report Coverage Offers on Form 1095-C
Form 1095-C contains much of the detailed data required for ACA reporting, and errors frequently occur on Lines 14 through 16 due to incorrect or missing codes.
- Fully insured ALEs must complete a Form 1095-C for each full-time employee, even if no coverage was offered.
- Self-funded ALEs must complete a Form 1095-C for all individuals who were enrolled in coverage, regardless of full-time status.
Key reminders by line include:
Line 14 – Offer of Coverage Codes (Series 1)
A code must be entered for every month of the year. This line should never be left blank. The code must reflect the coverage actually offered. If no offer was made, Code 1H (no offer of coverage) should be used.
Line 15 – Employee Required Contribution
This line generally reflects the employee’s share of the lowest-cost self-only coverage offered, not necessarily what the employee chose to pay. If coverage was offered at no cost to the employee, “0.00” should be entered. Line 15 should be left blank only when specific Line 14 codes apply (such as 1A or 1H).
Line 16 – Applicable Safe Harbor or Other Relief Codes (Series 2)
Only one Series 2 code may be used per month. If multiple codes apply, employers must follow IRS instructions to determine the correct priority. If no code applies, Line 16 may be left blank. There is no specific code indicating that a full-time employee declined or waived coverage.
Tip 5: Meet All Filing and Furnishing Deadlines
ACA information returns for the 2025 calendar year must be filed electronically with the IRS by March 31, 2026. Employers filing 10 or more information returns during the year are required to file electronically.
While Forms 1095-B and 1095-C no longer need to be automatically distributed, employers must still make them available upon request. For 2025 reporting, this requirement can be satisfied by posting a website notice that:
- Is clear, prominent, and accessible to covered individuals;
- Includes an email address, mailing address, and phone number for requests;
- Is posted by March 2, 2026; and
- Remains available through October 15, 2026.
Requested forms must be provided by January 31 of the following year or within 30 days of the request, whichever is later. Alternatively, employers may choose to distribute forms automatically by March 2, 2026, instead of using the notice method.
Tip 6: Don’t Overlook State-Level Reporting Rules
In addition to federal obligations, employers operating in California, the District of Columbia, Massachusetts, New Jersey, and Rhode Island are subject to state ACA reporting requirements tied to those states’ individual mandates. While Vermont also has an individual mandate, it currently does not impose separate employer reporting rules.
Although state reporting frameworks often resemble federal requirements, federal relief or alternative furnishing options do not automatically apply at the state level. Employers should carefully review state laws and guidance whenever federal reporting rules change to ensure continued compliance across all applicable jurisdictions.