Posted on: January 28, 2026                                                                                                  

The Affordable Care Act (ACA), a comprehensive health care reform law that impacts employers and individuals, requires certain employers to report health coverage information to the Internal Revenue Service (IRS) and furnish a statement about health coverage to their employees on an annual basis. Here is some key information to assist employers with ACA reporting for tax year 2025.

Covered employers

The reporting requirements differ based on the number of full-time and full-time equivalent (FTE) employees a business employs, and the type of coverage the employer sponsors.

Under the ACA, the following employers are required to follow certain reporting requirements: 

• Small employers with self-insured (including level-funded) health plans
• All Applicable Large Employers (ALEs) (those with 50 or more full-time and FTE employees) 

Note: The information from these reporting requirements will be used to determine whether an ALE member will be subject to the employer mandate penalty and if an individual is eligible for a premium tax credit.

Additionally, some states and the District of Columbia have enacted their own reporting requirements related to health coverage. For example, California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont require employer reporting of health coverage information to assist the state/district in enforcing health coverage mandates. Check your state law to ensure compliance.

Timing

Here is some timing to keep in mind for ACA reporting requirements:

Note: Covered employers should review insurance coverage, calculate full-time and FTE employees, and identify forms to file, gather information and prepare communications if they have not already.

Preparation 

Here are some helpful steps and resources for determining your ACA reporting requirements. 

Review insurance coverage.

Here is an overview of each type of health plan:

• Fully Insured Health Plan: Generally, a type of plan purchased by the employer from an insurance company where the insurance company assumes the health coverage risk (offered by most employers).
• Self-Insured Health Plan: Generally, a type of plan where the employer assumes the risk of paying participants' claims out of its general assets or a trust.
• Level-Funded Health Plan: Generally, a type of self-insured plan where rates are based on group experience. They typically have fixed monthly payments that are used to pay claims and maintain stop-loss coverage. For instance, one-year rates may be low due to a healthy population of the group but that could change the next year due to illness/injury in the group.

For employers that have fewer than 50 full-time and FTE employees:

• No action is needed (unless the employer is self-insured or has a level-funded plan).

• If they do not offer health coverage, they are not subject to the reporting requirements.
• If they offer a fully insured health plan, their insurer must file the required forms with the IRS and furnish the forms to their employees.

Note: Commonly controlled groups exist when any two or more entities are treated as a single employer under section 414 (b), (c), (m), or (o) of the Internal Revenue Code. Where the combined total of full-time and FTE employees in a controlled group is 50 or more, each individual employer is subject to reporting with respect to its own common law employees (or prior employees).

IMPORTANT: Employers that are part of a controlled group must combine all employees of each company when making this calculation.

Employers that have 50 or more full-time and FTE employees or offer a self-insured or a level-funded health plan should proceed to identifying which forms are needed to file.

Identify forms to file.

Under the 2024 Paperwork Burden Reduction Act, an alternative manner was provided for furnishing Forms 1095-B and -C to employees and covered individuals only upon request. Covered employers and health insurance providers must now either:

• Furnish a copy of the annual statement (Form 1095-B or Form 1095-C) to full-time employees and covered individuals; or
• Provide a clear, conspicuous, and accessible notice on their website that any individual to whom the form would otherwise be required to be furnished may request a copy of such statement. Additionally, upon request of any such individual, furnish a copy of such statement to them no later than the later of January 31 of the year following the covered calendar year or 30 days after the date of the request.

Note: The change applies to annual statements due after December 31, 2024. Forms 1095-B or Forms 1095-C must still be prepared and remitted to the IRS. State laws still apply. States such as California, New Jersey, Rhode Island, and D.C. have their own ACA reporting requirements and employers in those areas may still need to automatically furnish forms.

Based on the number of full-time and full-time equivalent (FTE) employees in the previous calendar year and the type of coverage offered, determine which forms are required for reporting, if any.

As a quick overview:

• 50 or more (Self-insured, fully insured or no insurance): Complete and file Forms 1095-C and 1094-C.
• Less than 50 (Self-insured): Complete and file Forms 1095-B and 1094-B.
• Less than 50 (Fully insured): The insurer is responsible for filing on behalf of the employer.
• Less than 50 (No insurance): Reporting is not required.

 For more information on the expanded requirement to file electronically, go here.

Gather information.

After identifying which forms are needed to file, gather the necessary information to complete them. Employers that fail to meet applicable reporting requirements may be subject to penalties.

Depending on the employer's situation, the necessary information may include, but is not limited to:

• The employee’s name, Social Security number (SSN) or date of birth (if SSN is unavailable), address, and share of the monthly premium for self-only coverage (in certain cases);
• The employer’s name, Employer identification number (EIN), telephone number and address; and
• The months in which: 1) the employer offered coverage; and 2) a safe harbor (or other situation) applied (e.g., the employee was not a full-time employee)

Use these links to access the forms and their instructions:

• Form 1095-C  &  Instructions: ALE members must file this form with the IRS and distribute it to certain employees to report information concerning the coverage offered.
• Form 1094-C  &  Instructions: This is a transmittal form that must accompany Form 1095-C when ALE members file it with the IRS.
• Form 1095-B  & Instructions: This form is used by employers that are not ALE members and offer self-insured health coverage to report certain information to covered individuals and the IRS about the months of coverage offered to employees. This form is also used by insurers to show coverage provided to individuals under a fully insured plan.
• Form 1094-B  &  Instructions: A transmittal form that must accompany Form 1095-B when non-ALE members who offer self-insured coverage file with the IRS.
  

RUN Powered by ADP^® (RUN) clients: To help clients complete the forms, sign in to RUN  for an export tool that can gather relevant employee information. Pull the data again if there is a new hire or if changes are made to employee information before the filing deadline. Note: You will need to work with your insurance carrier or benefits administrator to obtain the health coverage information needed to complete the remainder of the forms.

Here is a list of vendors that may also be able to help you complete your ACA forms.

Prepare communication.

Inform employees that they will receive the employee statement needed to prepare their tax return. Here are sample communications employers can use as a model, depending on their company size and the type of coverage they offer:

Additionally, consider coordinating communication strategies with insurers when the insurers are responsible for providing the forms.

Conclusion

If your company is subject to ACA reporting requirements, start gathering the necessary data in order to meet the applicable deadlines as late filings may subject you to a penalty. Also, review your communication strategies to employees and consider coordinating with your insurer (if applicable). 

Employers are also encouraged to seek assistance through legal counsel, tax professionals, or insurance brokers when filing these forms. For more information, see the FAQs and the Guidance provided by the IRS. 

For continued coverage on ACA reporting, visit the ACA Reporting Road Map.