Why is it important to verify employee hours before filing the 1094-C?

Accurately tracking and verifying employee hours, especially for part-time and variable-hour workers, ensures proper classification of full-time employees and prevents costly ACA penalties. Without correct hour data, employers risk misreporting eligibility and coverage.

What key data should I check on Form 1095-C before submitting the 1094-C?

Review all 1095-C forms for completeness, including coverage offer codes, employee details, coverage months, and waivers. Errors in this data can lead to IRS rejection or penalties, so thorough audits and corrections before filing are critical.

How do measurement and stability periods affect 1094-C reporting?

Measurement and stability periods determine when an employee is considered full-time and eligible for coverage. Ensuring these periods are correctly configured prevents misclassification and supports accurate reporting on your 1094-C forms.

What should employers confirm regarding IRS filing requirements for the 1094-C?

Employers must verify their Employer Identification Number (EIN), ALE member status, plan type (self-insured or fully insured), and ensure electronic filing compliance if applicable. Also, maintaining an active Transmitter Control Code (TCC) is essential for electronic submissions.

How can I prepare my ACA data for a potential IRS audit?

Maintain organized and secure records of employee hours, coverage offers, waivers, and filing documents. Using a reliable ACA compliance solution like ACA-Track helps keep all data in one secure location, simplifying retrieval during an audit and reducing risks of penalties.

Top 5 Things to Check Before Filing Your 1094 C

Top 5 Things to Check Before Filing Your 1094-C

Filing your 1094-C form accurately and on time is a critical step for any Applicable Large Employer (ALE) under the Affordable Care Act (ACA). Mistakes or omissions can lead to costly penalties and IRS scrutiny. If you’re responsible for ACA compliance at your company, whether you’re in HR, payroll, finance, or benefits, preparing for your 1094-C filing requires careful attention to detail and comprehensive data management.

To make this process easier, many organizations turn to trusted ACA compliance solutions like ACA-Track, a platform designed to simplify tracking, monitoring, and reporting of ACA data with powerful tools and expert support.

Here are the Top 5 Things to Check Before Filing Your 1094-C to ensure your filing is accurate, compliant, and stress-free.

1. Verify Employee Hours and Status Accuracy

Your 1094-C form depends on accurate classification of employees as full-time or part-time, and precise documentation of their hours worked. This includes variable-hour employees whose status may fluctuate.

Why it matters: Under ACA rules, full-time employees are those working an average of 30 or more hours per week. Tracking actual hours worked—including part-time, variable-hour, and seasonal workers—is crucial for correct eligibility determination.
How to check: Use integrated systems that collect data from multiple sources such as time clocks, payroll, and manual timesheets. Ensure these sources are synced and up to date.
Helpful tool: ACA-Track’s advanced data integration collects hours worked for 100% of your workforce, from any payroll or HRIS system, so you can confidently monitor employee eligibility thresholds without manual errors.

2. Ensure Completeness and Correctness of Form 1095-C Data

Form 1095-C provides detailed information on the coverage offered to each employee, which feeds into the 1094-C summary.

Why it matters: Incorrect or incomplete 1095-C data can trigger IRS penalties or mismatched records that lead to penalty notices, such as the IRS Letter 226-J.
What to check: Confirm that all data fields are complete, including offer of coverage codes, employee details, coverage months, waivers, and dependents.
Expert tip: ACA-Track performs monthly line code audits to identify errors or inconsistencies before filing deadlines, enabling you to fix issues proactively.

3. Confirm the Correct Use of Measurement, Administrative, and Stability Periods

Employers use measurement, administrative, and stability periods to determine employee eligibility for health coverage and reporting obligations.

Why it matters: These periods impact when and how you classify employees as full-time and whether you meet coverage requirements.
What to check: Review your configured periods to ensure they comply with IRS guidance and reflect any company-specific policies or changes.
Benefit of automation: ACA-Track offers flexible configuration options that let you set and adjust measurement, administrative, and stability periods to match your organization’s needs without complicated spreadsheets.

4. Validate IRS Reporting Information and Electronic Filing Requirements

Your 1094-C filing includes key IRS information such as the Employer Identification Number (EIN), ALE Member status, and whether the company is self-insured.

What to verify:
- Correct EIN and contact details
- ALE member status and aggregation groups are properly identified
- Transmitter Control Code (TCC) is current if filing electronically
- Proper codes used for fully insured vs. self-insured plans
Why electronic filing matters: Employers with 250 or more full-time employees must file electronically and submit an XML file that meets IRS AIR schema requirements.
How ACA-Track helps: It creates compliant IRS XML files and supports the entire electronic submission process, including TCC management and IRS validation, reducing your risk of rejected filings.

5. Review and Secure All ACA Data to Prepare for IRS Audits

The IRS may request records related to your ACA reporting during an audit or upon receiving a penalty notice.

What to do:
- Maintain all ACA-related documentation, including employee hours, coverage offers, waivers, and employee responses.
- Keep digital records organized and easily retrievable.
- Ensure personal data security to comply with privacy laws and avoid data breaches.
Solution: ACA-Track stores all ACA data securely in a centralized cloud platform with encryption and SOC 2 type 2 compliance, allowing quick access during IRS audits or state exchange requests.

Why Choose ACA-Track for Your ACA Compliance?

ACA compliance can feel overwhelming because it requires coordination across HR, payroll, benefits, and finance departments. That’s why a comprehensive ACA compliance service like ACA-Track can be a game changer:

Data integration: Collects actual hours worked across all employee types and payroll systems.
Ongoing monitoring: Alerts you when employees cross eligibility thresholds.
Accurate reporting: Generates IRS-compliant 1094-C and 1095-C forms with line code audits.
Error resolution: Helps fix reporting errors before submission.
Dedicated support: A Client Success Advisor guides you through compliance complexities.
Security: Industry-leading data protection keeps sensitive information safe.

Final Thoughts

Before filing your 1094-C, taking these five steps can help you avoid penalties, reduce risk, and ensure compliance:

Double-check employee hours and full-time status.
Review every 1095-C form for accuracy.
Validate measurement and stability periods.
Confirm IRS reporting details and electronic filing readiness.
Secure and maintain ACA compliance records for audits.

For businesses seeking to streamline their ACA tracking and reporting, ACA-Track is a trusted partner offering reliable, secure, and easy-to-use solutions designed for your specific needs.

Ready to simplify your ACA compliance? Visit ACA-Track and discover a proven solution tailored to your business today.