ACA Electronic Reporting Requirements
The Affordable Care Act (ACA) created reporting requirements under Internal Revenue Code (Code) Sections 6055 and 6056. Under these rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees.
Under the original rules, any reporting entity that was required to file at least 250 individual statements under Sections 6055 or 6056 had to file electronically. However, on Feb. 23, 2023, the IRS released a final rule which lowers the 250-return threshold for mandatory electronic reporting to 10 returns. As a result, most reporting entities are now required to complete their ACA reporting electronically.
This ACA Compliance Bulletin describes the process for reporting electronically under Sections 6055 and 6056.
Action Steps
Employers that have not requested an extension or an electronic filing waiver and are subject to the ACA reporting rules should be exploring options for filing ACA reporting returns electronically to ensure filing is completed by the March 31, 2025, deadline. For example, they may be able to work with a third-party vendor to complete the electronic filing.
Reporting entities that may be in a position to perform their own electronic reporting can review the IRS’ ACA Information Returns (AIR) Program main page for more information on the reporting standards for composing and successfully transmitting compliant submissions to the IRS. The IRS has designated the AIR Help Desk as the first point of contact for electronic filing issues (1-866-937-4130).
Electronic Reporting Requirement
In prior years, any reporting entity that was required to file at least 250 individual statements under Sections 6055 or 6056 had to file electronically, and this requirement applied separately to each type of individual statement.
Now, employers that file at least 10 returns during the calendar year must file their ACA returns electronically, and this threshold applies in the aggregate to certain information returns. This means that a reporting entity may be required to file fewer than 10 of the applicable Form 1094 and 1095 but still have an electronic filing obligation based on other kinds of information returns filed (e.g., Forms W-2 and 1099).
Currently, electronic filing is done using the AIR Program. The IRS has provided guidance on electronic reporting under Sections 6055 and 6056 through its AIR Program main page. However, this guidance is generally very technical and intended for software developers and other entities that plan on providing electronic reporting services. Nonetheless, it can provide useful information on standards and procedures for returns transmitted through the AIR Program.
AIR Program Overview
- Software developers: Develop software for creating electronic files for ACA information returns.
- Transmitters: Transmit information returns to the IRS on behalf of reporting entities.
- Issuers: Entities capable of transmitting information returns directly to the IRS on their own behalf.
In most cases, issuers, employers, and other reporting entities will use a third-party vendor to file electronically with the IRS on their behalf. As a result, these entities will not directly use the AIR Program themselves.
Electronic Reporting Process
The following steps must be completed by entities that submit electronic returns through the AIR Program:
- Step One: Register to use IRS e-Services tools and apply for the ACA Application for Transmitter Control Code (TCC).
- Step Two: Pass all applicable test scenarios. Software developers must annually pass ACA Assurance Testing System (AATS) testing. Transmitters and issuers must use approved software to perform the communications test, which is only required to be successfully completed once.
Waiver From Electronic Filing Requirement
A hardship waiver may be requested from the electronic filing requirement by submitting Form 8508, Application for Waiver from Electronic Filing of Information Returns, to the IRS.
If a waiver for original returns is approved, any corrections for the same types of returns will be covered under the waiver. However, if original returns are submitted electronically, but the reporting entity wants to submit corrections on paper, a waiver must be approved for the corrections if the reporting entity must file 10 or more corrections.
Filing Extension Requests
Reporting entities can request an automatic 30-day extension of time to file by completing Form 8809, Application for Extension of Time To File Information Returns, and filing it with the IRS on or before the due date of the returns.
This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2023-2025 Zywave, Inc. All rights reserved.