2024 Affordable Care Act End-of-Year Recap

Requirements around the Affordable Care Act (ACA) are seemingly ever-changing, and 2024 was no exception. This year saw ongoing debate about the future of the ACA, with Republicans in the House pushing for significant changes, along with changes to penalties, affordability percentages, and filing rules for small businesses. Let's recap some of the key developments of 2024.

Debate Over the Future of the ACA

With Republicans maintaining control of the House, the future of the ACA remains a topic of intense discussion. While outright repeal of the ACA seems unlikely, Republicans have hinted that massive reforms to the law are forthcoming.

These potential changes could have far-reaching implications for the accessibility and affordability of healthcare in the United States, possibly leading to millions of Americans being uninsured. It's crucial for employers to stay informed about these developments and understand how any potential changes might impact their healthcare coverage offerings and ACA obligations.

Other Important Updates

In addition to the ongoing debate over the future of the ACA, there were several other notable developments in 2024:

• Changing Costs of Noncompliance: The IRS announced that 4980H employer mandate penalties for non-compliant applicable large employers (ALEs) would decrease for the first time in 2025.* This emphasizes the importance of staying on top of regulations as many components of the ACA are updated annually.
  • Penalty A — failure to offer minimum essential coverage to 95% of full-time, benefit-eligible employees—will decrease from $2,970 ($247.50/month) in 2024 to $2,900 ($241.67/month) in 2025.*  
  • Penalty B — failure to provide affordable, minimum value coverage to a benefit-eligible employee—will decrease from $4,460 ($371.67/month) in 2024 to $4,350 ($362.50/month) in 2025.*
    
    While these amounts are decreasing slightly in 2025, they still add up quickly and can pose significant financial risk to employers of any size. 
     
• Increase in ACA Affordability Percentage: The IRS recently announced the 2025 ACA affordability percentage is increasing from 8.39% in 2024 to 9.02% in 2025. The affordability percentage is used to determine whether or not an employee is being offered affordable coverage through their employer, and therefore, whether or not they are eligible for a premium tax credit when purchasing coverage through the exchange.
• Electronic Filing Rules for Small Businesses: The IRS implemented new electronic filing rules for small businesses, requiring those with more than 10 forms to file electronically.*
• Electronic Correction Submissions Restrictions: The IRS added restrictions to electronic correction submissions, only accepting corrections for years less than six years before the current year.

ACA Preventive Care Mandates

The debate over preventive care mandates took another turn in 2024. An appeals court (the 5th US Circuit Court of Appeals) issued a ruling that both upheld and reversed aspects of a previous decision that would have significantly impacted no-cost coverage for preventive services.

Here's a breakdown of the key developments:

• Some No-Cost Coverage Mandates Upheld: The appeals court reversed the lower court's decision to block nationwide ACA requirements that certain preventive services be covered by insurers at no cost. This includes coverage for several cancer screenings and statin medication for cardiovascular disease prevention.  
• Some Mandates Struck Down: However, the appeals court upheld the lower court's conclusion that some no-cost coverage mandates were unlawful. This part of the ruling focused on the constitutionality of the US Preventive Services Task Force, which recommends what preventive services should be covered under the mandates.
• Impact: This ruling creates a complex situation. While some preventive services will continue to be covered nationwide at no cost, others may not be, depending on the outcome of further legal challenges. This could lead to variations in coverage depending on the state and the specific service in question.
• Ongoing Legal Battles: This case is likely to continue making its way through the courts, potentially reaching the Supreme Court. The 5th Circuit also sent parts of the case back to the lower court for further proceedings, specifically concerning the constitutionality of the Advisory Committee on Immunization Practices and the Health Resources and Services Administration, which issue recommendations for no-cost vaccine coverage and preventive services for women and children, respectively.

Important Deadlines to Keep In Mind**

• Forms 1094 and 1095: Due by Feb. 28, 2025, if filing on paper, or March 31, 2025, if filing electronically.
• Form 1095-C: Must be furnished to employees by March 3, 2025.
• ACA Open Enrollment Deadlines:
• December 15, 2024: Last day to enroll in or change plans for coverage to start January 1, 2025.
• January 15, 2025: Last day to enroll in or change plans for the year with coverage starting February 1, 2025.

2024 ACA Reporting Preparation

2024 was a year of ongoing uncertainty for the ACA. The debate over its future and the potential for significant changes make it crucial for employers and individuals to stay informed.

As we move into 2025, understanding the latest developments and their potential impact on healthcare coverage will be essential for helping maintain compliance and making more informed decisions about healthcare benefits. 

To help get you started on the right foot going into 2024 ACA reporting, we have updated our reporting guide with tips to help you and your team keep track of important deadlines, penalties, and regulations to know. Dig into this eBook 5 Steps to a Smoother 2024 ACA Reporting, for more in-depth information on how to stay better organized throughout the season and beyond. 

*Source: https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-employer-shared-responsibility-provisions-under-the-affordable-care-act 
** Source: https://www.irs.gov/pub/irs-dft/i109495c--dft.pdf 

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