ACA reporting is a year of records that gets filed in one week.
Forms 1094-C and 1095-C report what an employer offered each full-time employee, month by month. We can help you with the filing, and with the tracking that decides what the forms say. Got an IRS letter about missing ACA returns? See what to do about IRS Letter 5699 →
Fifty full-time employees, counted the year before.
Applicable large employer status is measured on the prior calendar year, so a growing company is subject to the rules before it feels like a large employer.
Full-Time and Equivalents
Employees averaging 30 or more hours a week count in full, and part-time hours are converted into full-time equivalents. Fifty or more across the prior year makes the employer an applicable large employer. Part-time hours are where growing companies get caught: a business with fewer than fifty full-time staff can cross the line once those hours are converted. The count should come from a year of payroll hours, not from a headcount. Check the dates and rules for your own group with our free ACA reporting deadline calculator.
Related Companies Count Together
Businesses under common ownership are combined for the count, even when each one runs its own payroll and its own plan. The controlled group rules look at ownership across entities and can combine businesses owned by the same family or partners. An owner with two companies that are each under fifty can be an applicable large employer in both, and each company files its own forms.
Self-Funded Plans Report Coverage Too
A self-funded or level-funded plan reports who was covered each month, and that duty reaches employers below fifty as well. Employers below fifty use the B forms, and the report lists every covered person by month, dependents included. On an insured plan the carrier files this; on a self-funded plan the employer has to hold those records.
What changes when you cross fifty →
ACA compliance for Michigan employers, from offers to filings →
The forms are only as good as the months behind them.
Every line on a 1095-C is a code, and every code is a claim about an offer, a cost and a status in a given month.
Variable-Hour Employees
Employees whose hours swing are measured over a look-back period, then treated as full-time or not for the stability period that follows. Set up once, it decides who gets an offer and what the form reports. The periods are applied the same way to everyone in a category, and new hires with uncertain hours get an initial measurement period of their own. How those periods are set decides whether a busy season triggers an offer.
Affordability, Tested as You Go
The employee’s cost for the lowest-cost self-only plan is tested against the IRS percentage for the plan year, 9.96% for 2026, using a safe harbor, so a problem shows up at renewal rather than in an IRS letter. The safe harbors are W-2 wages, rate of pay and the federal poverty line, and each can give a different answer for lower-paid employees. The percentage is reset every year, 10.22% for 2027 plan years, so the contribution needs rechecking at each renewal.
Codes That Match What Happened
Offers, waivers, waiting periods and terminations are recorded as they happen, so the codes are built from records rather than rebuilt in February. The offer code and the relief code on each 1095-C have to agree with each other and with payroll: an employee coded as offered coverage in a month they were still in a waiting period is a coding error, because that month should show no offer and the waiting period relief code. Recording the waiting period as it happens is what produces the right code.
Filed and Furnished
We can help you with the filing. The forms are prepared, checked and filed electronically with the IRS, and furnished to employees by mail or through the notice-and-request option. Before filing, the forms are checked against payroll hours and enrollment for conflicts, such as an employee shown as full-time with no offer. After filing, the IRS acceptance record is kept with the file, because it is the proof if a letter arrives later.
Two dates, and one of them changed.
Furnishing to Employees
31 January, with an automatic 30-day extension, so about 2 March. Employers may now post a clear notice that forms are available on request instead of mailing every one, as long as the notice stays up through 15 October and a requested form goes out within 30 days.
Filing with the IRS
28 February on paper or 31 March electronically. Electronic filing is required once an employer files 10 or more information returns of any kind in the year, and W-2s count toward that number. Because W-2s count toward the threshold, in practice every applicable large employer files electronically. That takes a transmitter setup with the IRS, or a filing vendor that has one, and it is easier to arrange in the fall than in March.
States with Their Own Rules
California, New Jersey, Rhode Island, Massachusetts and the District of Columbia run their own coverage reporting, and the federal mailing relief does not change what they require. Each sets its own deadline and filing process, and the duty follows where employees live, not where the company is based. For a Michigan employer, a remote employee in one of those states is usually what brings a state filing into play.
What employers ask about ACA reporting.
We have 45 employees. Do we file 1094-C?
Not if you averaged fewer than fifty full-time and equivalent employees last year. If your plan is self-funded, you may still report coverage on the B forms. Reporting and the employer mandate use the same count, so the first year you report on these forms is also the first year the penalties for not offering affordable coverage to full-time staff can apply. Near the line, track hours monthly so the change is planned.
What happens if the codes are wrong?
The IRS compares them with employees’ tax returns and marketplace subsidies, and a mismatch can lead to a penalty letter. The fix is accurate monthly records, not a better guess in February. A proposed penalty can be contested with month-by-month proof of what was offered. Corrected forms can also be filed once an error is found, and doing that before a letter arrives is the cleaner route.
Can our payroll company handle this?
Some can file the forms, but the forms reflect benefits decisions payroll does not see: offers, waivers and eligibility. Someone has to own that side. In practice payroll supplies hours and pay, the benefits side supplies offers, enrollments and waivers, and someone reconciles the two before the codes are built. We can help set up that handoff and review the forms before filing.
Do we still have to mail every 1095-C?
Not necessarily. Federal rules now allow a posted notice with forms furnished on request, but some states still require delivery. The practical step is deciding where the notice lives, such as a benefits portal or the company website, and who answers a request. Former employees who are owed forms count too, so the notice has to be reachable by people who have left.
When do we find out we are an applicable large employer?
At the start of the year, based on the year before, which is why a company that grew past fifty last year reports this year. The status applies for the whole calendar year, even if headcount drops back below fifty during it. Next year’s status is then decided on this year’s numbers, so the count is worth watching monthly.
Is affordability based on family coverage?
No. It is tested on the employee’s cost for self-only coverage under the lowest-cost plan that provides minimum value. Family cost matters elsewhere: since the family glitch was fixed, relatives may qualify for marketplace subsidies when family coverage is unaffordable to them, although that does not trigger an employer penalty.
The rules in one place.
IRS Rules For Employer Health Plans
The ACA forms, IRS letters and tax rules for employer plans, in one place.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
Affordable Care Act (Public Law 111-148)
The 2010 health reform law, with later amendments, behind employer coverage, reporting and market rules.
ACA Reporting (26 U.S.C. 6056)
The statute behind employer reporting of offers of coverage on Forms 1094-C and 1095-C.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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