ACA reporting
ALE Determination
ALE (Applicable Large Employer) determination is based on the prior calendar year’s headcount and hours. If you provide your data in a clean, table-based format, we’ll complete the analysis at no charge.
- Free ALE Check: No-cost if data is table-based (e.g., Excel with labeled columns).
- Prior-Year Rule: ALE status for a given year is determined using the previous year’s data.
- Exceptions & Special Cases: Newly formed employers, mergers, acquisitions, and divestitures follow special rules (see Federal Register guidance below).
- Methodology: Analysis follows the IRS framework for determining ALE status.
IRS Example (FTE Calculation)
- Employer has 40 full-time employees for each month of the year.
- Employer also has 20 part-time employees, each working 60 hours per month.
- Part-time hours per month total 1,200 (20 × 60).
- 1,200 ÷ 120 = 10 full-time equivalents (FTEs).
- Annual totals: 480 full-time (40 × 12) + 120 FTE (10 × 12) = 600.
- 600 ÷ 12 = 50 average full-time + FTE → employer is an ALE for the following year.
(Adapted from IRS example for clarity.)
Typical ACA Reporting Timeline (for 2026 Coverage Filed in 2027)
- Q3–Q4 2026: Collect employer-level info and complete intake/implementation questions.
- Dec 2026–Jan 2027: Gather all processing data (census, enrollment, payroll/hours).
- Late Jan–Feb 2027: Configure, code, QA, and finalize forms for review and sign-off.
- Mar 2, 2027: Furnish 1095-C statements to employees (automatic 30-day extension of Jan 31).
- Mar 31, 2027: IRS electronic filing deadline for 1094-C/1095-C.
- April 2027: Submit any post-acknowledgment corrections as needed.
- Year-Round: Support for back filings and assistance with IRS letters/penalties.
Penalties Overview
Employer Shared Responsibility (IRC §4980H)
- §4980H(a) “Sledgehammer”: Failure to offer MEC to ≥95% of full-time employees (per EIN). Based on full-time count minus 30.
- §4980H(b) “Tack hammer”: Offer not affordable or lacks MV to one or more full-time employees; assessed per impacted employee who receives a PTC.
Indexed penalty amounts
- Calendar year 2026: §4980H(a) $3,340 (≈ $278.33/mo); §4980H(b) $5,010 (≈ $417.50/mo).
- Calendar year 2027: §4980H(a) $3,780; §4980H(b) $5,670.
Amounts are set annually by IRS guidance and subject to change.
Information Return Penalties (IRC §§6721/6722)
- For 2026 filings: up to $340 per return/statement; $680 for intentional disregard.
- Tiered amounts may apply if corrected within 30 days or by Aug 1.
- Notice 972CG: IRS notice used to assess information return penalties.
- Common triggers: Late/incorrect 1094/1095s, failure to e-file when required, name/SSN mismatches, incomplete TIN solicitations.
- Best practices: Early data validation, automated checks, and a documented corrections workflow.
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Have questions about ALE status, coding, or state filing? Send us a note and we’ll follow up with next steps.