The 2020 ACA Reporting Landscape for US Employers: What’s New?Updated January 11, 2023

Most of you now have the ACA filing season under your belt. As we are transitioning into the next ACA filing season – it’s time to focus on what’s new.

Is the ACA employer mandate still in place aka do US employers still need to comply? And are there any new or updated ACA reporting requirements for employers to be aware of?

The Affordable Care Act remains law of the land for US employers

Despite all the legal turmoil these past few years, the employer mandate and all ACA reporting requirements around that remain in full force. Non-compliance of ACA regulations will continue to result in significant IRS penalties.

In December 2018, a federal judge in Texas ruled the entire Affordable Care Act unconstitutional and a year later, the 5th US Circuit Court of Appeals affirmed the finding that the individual mandate was invalid. But it instructed the district court to rehear the matter and “to employ a finer-toothed comb on remand and conduct a more searching inquiry into which provisions of the ACA Congress intended to be inseverable from the individual mandate.” So, the saga continues – the latest is that the Supreme Court has agreed to hear the case next term, which starts in October 2020. This decision is a bit of a surprise since on January 21, 2020, the Supreme Court denied the challengers’ motions to expedite consideration of the petitions and will proceed on a regular timeline. This essentially means that the Supreme Court won’t rule until after the 2020 election. A final decision is still not expected until Spring or Summer of 2021.

Healthcare will – again – be a hot topic in the 2020 election, but meanwhile, US employers with 50 or more full-time employees or full-time equivalents must stay compliant with all ACA health coverage and ACA reporting requirements in 2020 and most likely beyond.

Read who needs to be compliant, what to do, and when and what the penalties are for non-compliance.

New: State Filing Requirements for Individual Health Insurance Mandates

Now that you’re finally used to the federal employer mandate being around with its strict reporting guidelines, some states are creating their own ACA-style reporting requirements for employers as a way to enforce their own individual mandate – yay! The expectation is that even if the federal reporting requirements are modified or eliminated, these states will uphold their own state requirements for proof of individual health insurance.

Read more about which states have individual health insurance requirements and when they are in effect.

ACA Reporting Requirements, ACA Affordability Percentage, and ACA Penalties – Updates

There are always at least four yearly ACA regulation updates to be aware of:

Use our free ACA Affordability Calculator

1) The ACA Affordability Percentage

The rate for determining whether an employer-provided health care plan is affordable to employees was set at 9.83% of household income for 2021 but will now reduce to 9.61% for health plan years beginning in 2022.

In our blog post, “A Guide to ACA Affordability Percentages for Employers – with Affordability Calculator!” we lay out the details of qualifying health plans, what is considered “affordable health coverage,” the safe harbors, and the IRS penalties associated with not offering affordable health coverage to your employees.

Use our FREE ACA Affordability Calculator to find out if your health plan is affordable.

2) 2022 Reporting Deadlines

These are the same every year (although the the first two IRS deadlines are slightly different this year, due to falling on a Sunday).
What are they?

  • March 2:
    • Provide IRS Form 1095-C to all ACA-defined full-time employees.
  • February 28:
    • For paper filers – Mail transmittal of Form 1094-C and included 1095-Cs, to the IRS.
  • March 31:
    • For electronic filers – E-file Form 1094-C and included 1095-Cs with the IRS.

Note: These dates can change each year depending on if they fall on a weekend, or if there is an IRS extension. 
See ACA Deadlines below for current year dates.

3) 2022 Employer Penalties

Unlike the affordability percentage, penalty amounts go up every year. For 2022 this means:

  • Employer Shared Responsibility Payment for failure to offer health insurance that provides Minimum Essential Coverage:
    • An ALE subject to this penalty will pay $2,750 for each full-time employee (regardless if they took a tax credit) after excluding the first 30 Full-Time employees from the calculation.
  • Employer Shared Responsibility Payment for failure to offer Affordable Minimum Essential Coverage that provides minimum value:
    • An ALE subject to this penalty will pay $4,120 for each Full-Time employee (if they obtained a subsidy on an exchange) after excluding the first 30 Full-Time employees from the calculation.
  • The Non-Filing Penalty:
    • An employer who chooses to not fulfill their year-end 1095-C and 1094-C ACA reporting responsibility will be charged up to $570 per eligible employee – this penalty is similar to the W-2 non-filing penalty.

4) Updates to the 1095-C form

The 1095-C form changes slightly every year. However, the IRS likes to wait until the last minute so stay tuned into those IRS updates.

Need help with the ACA tracking and reporting requirements? Let us take that worry off your hands; learn more about Integrity Data’s ACA Compliance Service or sign up for a free consultation using the form to the right.

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