Challenges for E-filing ACA Forms

Large employers are required to report information about their health care plans, but companies are facing challenges in filing the Internal Revenue Service (IRS) forms electronically. The Affordable Care Act (ACA) mandates require employers to report the type and the cost of health insurance offered to full-time employees. However, many companies use an HRIS (human resource information system) to create the necessary forms. Unfortunately, these systems don’t have the ability to file the forms electronically with the IRS. This inability to e-file is causing problems for large employers.

The Issue with Third-Party Vendors

One solution is for large employers to use third-party vendors or outsourced professional to help them submit the IRS Forms 1094 and 1095 electronically. The vendors are usually businesses that transmitted 1099s to the IRS. These companies then entered the ACA e-filing business to offer additional services to customers.

The IRS set up the ACA Information Returns (AIR) system that allows employers to e-file the ACA forms. While this streamlines the process, the main issue is that the E-File vendors submitting the forms for their clients don’t understand the ACA reporting requirements. This means that the vendors can’t help the large employers who need to file these new forms. Employers don’t get assistance in filing the right forms or in avoiding errors. All of these issues could lead to ACA filing penalties for the employers.

Large Employers and Compliance Problems 

Another issue is ACA e-filing compliance. IRS form 1095 is a Protected Health Information (PHI) form. This means that employers need to use HIPAA (Health Insurance Portability and Accountability Act) and HITECH (Health Information Technology for Economic and Clinical Health) compliance policies. To protect information, employers have to submit the ACA forms securely to their vendors, and this includes encryption.

Still, another challenge for large employers is that the “Good Faith Effort” provision is about to expire. Once the expiration date passes, all employers will be responsible for submitting accurate ACA forms to the IRS to avoid penalties.

Although many employers are experiencing a variety of problems with submitting the ACA forms, one option is to find and use the right e-filing vendor. In any event, employers are the ones who face stiff penalties, so it is your responsibility to follow the rules, and to submit accurate ACA forms before the deadline.

If you have questions related to ACA filing please visit or or talk to our ACA experts at 1-866-62 e-file (1-866-62 3-3453). We know the issues employers are having and we would be able to help you at a very reasonable cost.