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Understanding IRS ACA compliance is crucial for organizations aiming to navigate reporting changes effectively. The term efficiency can be defined as the ability to achieve an end goal with little to no waste, effort, or energy. The President-Elect made one of his campaign-winning points all about the DOGE (Department of Government Efficiency) and the attempt to streamline all Government Entities (including the IRS) and make them operate quicker, eliminating backlogs, and redundant tasks. As most of you might know from the conversation with Paragon Compliance LLC, the IRS is about two years behind on reviewing 1095-C filings [...]

In our previous blog, we introduced the basics of an ICHRA (Individual Coverage Health Reimbursement Arrangement) plan and highlighted some of the unique advantages it offers to employers. In this post, we’re diving deeper into IRS 1095-C reporting requirements for employers who utilize ICHRAs, outlining key details and considerations for end-of-year reporting. Understanding IRS 1095-C Reporting Requirements for ICHRAs Employers who offer health coverage through an ICHRA must navigate specific IRS 1095-C reporting requirements to remain compliant with the Affordable Care Act (ACA). These reporting details, including new line codes and affordability considerations, are essential for proper [...]

It is September and the IRS has finally released the affordability threshold percentage for the filing year 2025.  As you know, fall is open enrollment season, and it is generally when employees elect their health insurance benefits for the upcoming calendar year.  If you are a benefits professional, you will soon be providing new health plan details, including costs, to your enrollees.  Please read on for how those health plan details – and costs (!) – affect compliance with the Affordable Care Act (ACA). The 2025 Affordability Percentage was released on September 6, 2024, and it increased [...]

Last month, the IRS released the draft 1095-C Form, giving businesses focused on ACA Compliance the opportunity to prepare for the 2024 ACA filing season. Electronic Filing Requirement for ACA Compliance in 2024 One of the key changes in ACA Compliance for 2024 is the mandatory electronic filing of 1094-C and 1095-C Forms (read a brief synopsis of the rule change here). All employers must e-file these forms to meet ACA Compliance requirements. Ensure that your systems are set up to handle this electronic submission and stay ahead of the deadlines. Line 14 Codes [...]

The term ICHRA stands for Individual Coverage Health Reimbursement Arrangement. It's a type of health reimbursement arrangement (HRA) introduced by the U.S. government to provide employees with more flexibility in how they use their health benefits. At Paragon, we haven’t seen much of this yet in New York, but we have clients in the mid-west who use ICHRA. Here’s a brief overview of the ICHRA plan: 1. What does ICHRA mean for Individual coverage? Unlike traditional group health insurance plans offered by employers, an ICHRA allows employers to reimburse employees for premiums and [...]

It is the 2nd quarter of 2024, we just completed 2023 ACA filings (including all the State Filings*), and one of the questions I have asked our clients over and over during the filing rush was, did you offer COBRA to this active designated as a Part Time employee? A lot of organizations stop offering Full Time benefits when an employee moves into a Part Time position or a bargaining union that did not negotiate an offer of health coverage for Part Time employees. For many organizations, this can potentially be disastrous as their offer of coverage [...]

Get ready, a significant change is here for this ACA filing season, and it requires certain filers to e-file in the beginning of 2024. But first, some background information on ACA filing. What is ACA Filing? The Affordable Care Act (ACA) created reporting requirements under the Internal Revenue Code Sections 6055 and 6056. Under these rules, certain employers must provide information to the IRS about the health plan coverage they offer, or in some cases, do not offer, to their employees. The ACA requires applicable large employers (ALEs), generally those with 50 [...]

A letter arrives for you with the IRS seal on it – your heart sinks. What could it be? Once you open it, the top right column continues to read that for a particular tax year the IRS is sending you: Letter 5699. The letter continues to read that you may be an Applicable Large Employer (“ALE”) and you may have been required to file information tax returns (Form 1094-C or Form 1095-C) for that year. What is Letter 5699? The initial Letter 5699 is an exploratory inquiry that the IRS sends to [...]