As year-end approaches, Affordable Care Act (ACA) reporting becomes a critical responsibility for employers. Since its implementation, ACA reporting has required employers to track employee eligibility, coverage periods, and contribution levels, making it a complex and detail-oriented process.
Even small errors can trigger IRS notices and penalties. Many organizations still underestimate the coordination and accuracy required to complete filings correctly and on time, leaving them vulnerable to compliance issues.
Common challenges in ACA filing
ACA filing can be complicated. Employers must ensure that Forms 1094 and 1095 are completed correctly, using the proper codes and reflecting the correct coverage information. Compliance requires meeting both federal and, in some cases, state filing requirements, each with their own rules and deadlines.
Even small discrepancies, such as misreported coverage months or incorrect indicator codes, can lead to notices or penalties. Understanding how to properly fill out each form and interpret IRS instructions is often cited as a major source of stress for HR teams.
Consequences of filing errors
Filing mistakes can result in financial penalties under IRC sections 6721 and 6722. Employers may also receive IRS notices requiring corrections. Some common notices include 226J, which identifies potential employer shared responsibility payment errors, and 972CG for reporting failures. Even when fines are minimal, the time and effort required to investigate and correct errors can be significant.
Repeated or systemic mistakes may also trigger additional IRS scrutiny. Addressing errors after submission requires resources that could otherwise be focused on strategic HR priorities.
Why timing matters
ACA filings are due on a fixed schedule, and late submissions can carry penalties regardless of the reason. Proactive planning allows employers to reconcile data, identify gaps, and ensure accuracy before deadlines. Early action reduces the risk of rushed, last-minute corrections and gives HR teams time to resolve discrepancies between payroll, HR, and benefits records.
Advisors who encourage clients to act early help them navigate these timelines more effectively. Filing early also allows time to address unexpected issues, such as late hires or coverage disputes, that could otherwise delay submission.
Trends and compliance considerations
In recent years, IRS enforcement of ACA reporting has remained consistent, with audits and notices issued when filings contain errors or omissions. Advisors should also be aware of incremental updates to reporting rules, such as adjustments to affordability thresholds and evolving state-level filing requirements.
Observing these trends helps advisors remind clients to stay current and reduce the risk of errors. Staying informed enables advisors to guide clients toward compliant practices, ensuring filings reflect the most up-to-date rules.
Advisors’ role in ACA filing
Advisors can help reduce filing risks by ensuring clients are aware of the importance of ACA reporting and encouraging them to use a qualified reporting solution. Their role is not to complete filings themselves, but to make sure clients take action early and have the resources they need to file accurately and on time.
By focusing on this single, proactive step, advisors help clients avoid errors, meet deadlines, and stay compliant without getting involved in the technical details of the process.
Conclusion
ACA filing is complex, and errors can be costly. Advisors who stay proactive and connect clients with an appropriate filing solution help ensure filings are completed accurately and on time. Taking this single step provides meaningful support and helps clients navigate the compliance process with confidence.
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