6 Common ACA Reporting Mistakes Employers Should Avoid

Assuming Small Employers Do Not Have to File

A small employer (non-ALE) may not be subject to the ACA employer mandate, but that does not automatically eliminate its reporting responsibilities. Small employers (non-ALEs) sponsoring level-funded or self-insured plans may still need to report enrolled employees and family members under Section 6055.

Why it matters: Skipping Section 6055 reporting because you assume ACA doesn’t apply to you leaves non-ALEs exposed to penalties for failing to file at all, a more serious position than filing late or filing with errors.

How to avoid it: Confirm your plan’s funding status first, not just your headcount. If you sponsor a level-funded or self-insured plan, you have a Section 6055 filing obligation regardless of ALE status.

Assuming the Insurance Carrier Will Handle Everything

For a fully insured plan, the carrier generally handles coverage reporting under Section 6055.

A level-funded plan is generally treated as self-insured, which means the employer is ultimately responsible for reporting coverage. Employers should confirm responsibilities with their carrier, broker, administrator, or reporting provider before filing season.

Why it matters: If you assume your carrier is filing on your behalf and your plan is actually level-funded rather than fully insured, nothing gets filed, and the IRS holds the employer responsible, not the carrier.

How to avoid it: Get written confirmation from your carrier, broker, TPA, or reporting vendor at the start of each plan year spelling out exactly who is filing which forms.

Using the Wrong ACA Forms

The correct forms depend on employer size and plan funding.

Small employers (non ALE) with level-funded or self-insured plans generally use Forms 1094-B and 1095-B. Applicable Large Employers generally use Forms 1094-C and 1095-C. Applicable Large Employers with self-insured plans also use Part III of Form 1095-C to report enrollment.

Why it matters: Filing the wrong form set, for example 1094-B/1095-B when ALE status actually requires 1094-C/1095-C, is a filing error that can trigger IRS correspondence and the need to refile.

How to avoid it: Reconfirm ALE status and plan funding type every year before selecting forms. Both can change year to year even when nothing else about the business has changed.

Reporting Employees but Not Their Covered Family Members

Section 6055 reporting may apply to every individual enrolled in the plan, not only employees. Employers may also need to report covered spouses, dependents, COBRA participants, retirees, and other enrolled individuals.

Why it matters: Section 6055 reporting tracks who’s enrolled, not just who’s employed, so leaving out spouses, dependents, COBRA participants, or retirees produces an incomplete filing even when every active employee is reported correctly.

How to avoid it: Pull enrollment data directly from the plan or carrier rather than from payroll or HRIS records alone. Payroll systems often don’t track non-employee dependents or COBRA enrollees.

Waiting Until Filing Season to Review the Data

ACA reporting may require information from payroll, HR, benefits administration, COBRA vendors, and insurance records.

Starting too late leaves less time to resolve missing Social Security numbers, incorrect coverage dates, employee-classification issues, or discrepancies between systems.

Why it matters: Most ACA reporting problems aren’t really form problems, they’re data problems, and finding them in January leaves little runway to fix them before the March deadlines.

How to avoid it: Build ACA reporting into a year-round process instead of a February scramble:

• Confirm annually whether the organization is an Applicable Large Employer
• Review controlled-group and common ownership relationships
• Identify whether each health plan is fully insured, level-funded, or self-insured
• Track full-time status and coverage offers monthly
• Reconcile employee and dependent enrollment information
• Verify names, Social Security numbers, birth dates, and addresses
• Account for new hires, terminations, leaves of absence, COBRA participants, and dependents
• Review affordability and offer-of-coverage data
• Correct data before forms are generated and transmitted

Assuming Submission Means the Filing Is Complete

An ACA filing can be accepted, accepted with errors, or rejected.

Employers should monitor the filing status, investigate reported errors, and complete any necessary corrections. Saving confirmation records can also help document that the required forms were submitted.

Why it matters: An “accepted” status from the IRS isn’t the same as an error-free filing. The IRS can accept a return “with errors,” and unresolved errors can still turn into penalty notices later.

How to avoid it: Check IRS AIR system status specifically for “accepted with errors,” not just “accepted,” and keep confirmation records on file as proof forms were submitted on time while corrections are pending.