Proposed ACA Changes From IRS Could Impact Small Businesses

A new proposed IRS regulation would mean that small businesses that have more than 100 returns per year would now have to file ACA Form 1095 electronically.

ACA Electronic-Filing Changes

If you work for a small business, changes might be on the horizon for how you file Affordable Care Act (ACA) information returns, Forms 1094-C and 1095-C, to the IRS. When employer mandate reporting requirements began in March of 2016 for the 2015 tax year, employers who had less than 250 information returns were able to file those forms annually to the IRS on paper. According to a new regulation proposed by the IRS, this number would be reduced, through a phased approach, to 100 returns in year one, and 10 returns in year two. 


New Potential Requirements

Here’s what you need to know about the new proposed regulations:

  • The new regulations, if adopted, will require employers to aggregate all forms they submit to the IRS, (W2, 1099 etc. with Form 1095) and file them electronically.

  • These new regulations would go into effect after March 31, 2022, and apply to businesses with more than 100 returns. 

  • In subsequent years after 2022, this rule would apply to businesses with more than 10 returns. 

There are two options if this new proposed regulation applies to you: learn how to file electronically or find an ACA service provider who can help you file.



If you are the Do-it-yourself (DIY) type, here is what you might need to do to get started:

  • Apply for a transmitter control code with the IRS to electronically submit.

  • Prepare your software developer to pass Affordable Care Act Assurance Testing System (AATS) testing. This is required to transmit returns to the IRS.

  • Using an approved software, perform the required communication test. This is only required to successfully complete the communication test once.

  • Create an xml file with all of your information.

  • Transmit forms electronically each year thereafter.


Work With an ACA Service Provider

Compliance with the employer mandate section of the ACA can be complicated. What if there was a way to help make it easier on you and your business? You can work with a trusted provider! Solutions like Equifax Workforce Solutions Affordable Care Act Management are there to help companies streamline their processes. Technology can assist you to:

  • Collect payroll, benefits, leave, and other data, and help translate into the appropriate indicator codes to populate Forms 1094-C and 1095-C.

  • Track hours, determine eligibility, predict future enrollment volume, and provide alerts for potential requirements compliance risks.

  • Distribute Forms 1095-C to employees, both on paper or electronically to employees who electronically consent.

  • Streamline the transfer of data between your organization and government agencies to help reduce verification requests.

  • Receive notifications from the state or federal exchange and streamline the process for subsidy-related verifications.

If you’d like to learn more about our ACA Management Solution, contact us today. And be sure to check out our on-demand webinar, What’s Now and What’s Next: ACA Employer Mandate.

The information provided is intended as general guidance and is not intended to convey any tax, benefits, or legal advice. For information pertaining to your company and its specific facts and needs, please consult your own tax advisor or legal counsel. Links to sources may be to third party sites. We have no control over and assume no responsibility for the content, privacy policies or practices of any third party sites or services.