The Affordable Care Act (ACA) created mandatory reporting requirements for employers to disclose information about group health plan coverage to both plan participants and the IRS. This requirement is fulfilled by the preparation and distribution of 1094/1095 forms. The 1095 forms are provided to employees and the 1094 transmittal which includes copies of the 1095 forms is sent to the IRS.
Since the inception of the ACA, small and mid-sized employers were permitted to mail their returns to the IRS, while large employers were required to file electronically. These rules have now changed and beginning in 2024 the electronic filing requirement applies to a broader range of employers. See below for a breakdown of the thresholds and recommended next steps. For further details on the new requirements click here.
- Employers with LESS than 250 1094 & 1095 filings – Option to file electronically or by mail
- Employers with MORE than 250 1094 & 1095 filings – Must File Electronically
New: Expanded Threshold – For 2023 Returns Filed in 2024
- Employers with LESS than 10 aggregated form filings* – Option to file electronically or by mail
- Employers with MORE than 10 aggregated form filings* – Must File Electronically
*The aggregate number of forms filed per year include W-2, 1099, 1094, 1095, and others listed in the IRS resource link
Keep in mind, this new requirement does NOT expand the requirements on who must file. It merely expands the threshold for electronic filing. Employers with less than 50 Full Time Equivalent (FTE) employees that offer a fully insured medical plan are not impacted by these requirements because the fully insured carrier has and will continue to manage the filing obligation.
- Companies that are already filing electronically (regardless of size), will not need to act. Simply continue to file the same way you always have.
- Companies that perform their own electronic reporting should review the IRS’ ACA Information Returns Program for information on the reporting standards for composing and transmitting the required filings. This can be found at https://www.irs.gov/e-file-providers/affordable-care-act-information-returns-air
- Companies that have always mailed paper forms to the IRS need to consider how they will comply with this requirement in 2024. Your payroll provider may have an option for you to consider. Additionally, your W3 team is here to help. We can answer questions about this new rule and share third-party vendors should you wish to outsource the 1094/1095 filing obligation.