Affordable Care Act (ACA) Reporting Requirements for Small Employers

Small Employers (fewer than 50 full-time equivalent employees) are not required to file 1094/1095 forms since the issuer of the insurance policy files the return and furnishes the statement. However, there are certain reporting requirements if they sponsor a self-funded plan (including level funded plan).


Reporting Requirements for Small Employers with Self-funded Plans

Small Employers sponsoring self-insured health plans must report on the Minimum Essential Coverage they provide for all covered individuals using forms 1094-B and 1095-B (Parts I, III and IV). These employers must confirm, during every tax season, that the coverage satisfied the individual mandate tax requirements for any or all months during the preceding calendar year or reportable tax year. Hence, the 1094-B and 1095-B forms reporting is mandated, even though they are much simplified than the 1094-C and 1094-C forms that are to be used by large employers.


I094-B: This is a short and simple form called a transmittal sheet. This form captures the name of the company, its employer identification number and address, and the name and phone number of someone the IRS can call if it has any questions.


1095-B: This form is submitted to IRS as well as provided to each covered employee. It has four sections, but only the following three sections are required to be completed:

  • Part I (Responsible Individual): Basic information about the employee,
  • Part III (Issuer or Other Coverage Provider): Basic information about the employer,
  • Part IV (Covered Individuals): Name, SSN (or date of birth if no SSN is available) and the months in which the individual was covered


MEC reporting penalties

Eligible Small Employers that do not submit an annual IRS return may be subject to penalties. However, these fines may be waived for employers that do not file due to reasonable cause, or fines reduced for errors that are corrected in a timely manner.

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