Upcoming IRS ACA Compliance Trends: What Employers Need to Know in 2025
The Affordable Care Act (ACA) continues to evolve, and with it, the IRS’s compliance expectations grow more detailed and complex. For employers—especially those classified as Applicable Large Employers (ALEs)—keeping pace with these changes is crucial to avoid costly penalties and streamline reporting obligations.
If your organization is seeking reliable solutions for managing these complexities, ACA-Track offers comprehensive, proven ACA compliance services that can help you confidently navigate current and upcoming regulatory shifts.
What Does ACA Compliance Mean for Employers in 2025?
As a quick refresher, the ACA requires ALEs (employers with 50 or more full-time or full-time equivalent employees) to offer affordable, minimum value health coverage to full-time employees or face potential IRS penalties. They must also accurately track employee hours, especially variable and part-time workers, and report detailed coverage information annually.
In 2025, the IRS is focusing on tightening enforcement and expanding audits around:
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Accuracy in employee hours tracking, including variable hour employees and part-time workers
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Precision in Form 1095-C and 1094-C reporting
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Electronic filing standards for larger employers
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Timely correction and resubmission of reporting errors
Emerging IRS ACA Compliance Trends for 2025
1. Increased Scrutiny on Variable Hour and Part-Time Employee Tracking
Variable hour employees are often the most challenging to track correctly, yet they remain a key focus area for IRS audits. The IRS is expected to scrutinize how employers determine which employees meet the 30-hours-per-week threshold, looking for robust documentation and use of measurement periods.
Why it matters: Without accurate tracking, employers risk penalties related to improper offers of coverage or failing to provide documentation in the event of an audit.
2. More Rigorous 1094-C & 1095-C Reporting Requirements
The IRS continues to refine the schema and electronic filing formats for ACA returns, requiring employers to maintain high accuracy and completeness in their reporting. Expect closer examination of:
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Employer and employee data consistency
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Correct use of codes on Forms 1095-C
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Proper completion of all reporting sections, especially for self-insured plans
3. Mandatory Electronic Filing for Most ALEs
Employers with 250 or more full-time employees must electronically file ACA returns using the IRS AIR (Affordable Care Act Information Returns) system. The IRS is expected to enforce compliance with electronic filing standards more strictly, requiring proper Transmitter Control Codes (TCCs) and timely submission.
4. Emphasis on Timely and Complete Error Correction
With increased IRS enforcement, employers will need to prioritize early detection and correction of errors on their ACA forms. Failure to respond to IRS penalty letters like the 226-J promptly can escalate penalties quickly.
5. Integration of State Reporting Requirements
Several states have their own ACA reporting mandates. Employers need systems that can handle both federal and state-level ACA compliance simultaneously to reduce risk and administrative burden.
How ACA-Track Supports Employers Facing These Trends
The complexity of ACA compliance has made outsourcing to specialized providers a popular choice. ACA-Track stands out by offering a full suite of services designed for today’s evolving ACA compliance landscape:
Comprehensive ACA Compliance Services Include:
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ACA 1095-C Monthly Line Code Audits: Monthly verification to ensure accurate employee coverage codes, reducing the risk of IRS penalties.
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Variable Hour Employee Tracking: Real-time monitoring of hours worked across all employee types to support accurate determination of full-time status.
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1094-C & 1095-C Federal and State Reporting: Preparation and submission of all required IRS and applicable state forms electronically.
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Error Identification & Correction: Assistance with fixing reporting errors and handling IRS penalty notices like the 226-J.
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Flexible Plans & Dedicated Client Success Advisors: ACA-Track customizes solutions based on your business size and complexity and provides personalized support throughout the compliance process.
Why ACA-Track?
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Data Integration: Seamlessly connects with your payroll system, HRIS, and timekeeping systems to collect actual hours worked for 100% of your workforce.
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User-Friendly Dashboards: Customizable views with color-coded warnings highlight potential compliance risks in real time.
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Secure Cloud-Based System: Fully encrypted and SOC 2 type 2 compliant, ensuring your sensitive employee data remains protected.
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Audit Ready: Stores all ACA data in one centralized location for quick retrieval during IRS or state healthcare exchange audits.
Key Takeaways for Employers in 2025
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Start tracking variable hour and part-time employees accurately if you’re not already. This is essential for proper ACA offers and documentation.
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Stay ahead of IRS reporting deadlines, including electronic filings and correcting errors. The IRS is tightening enforcement with heavier penalties for late or inaccurate filings.
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Consider partnering with a trusted ACA compliance provider like ACA-Track. Their comprehensive services can simplify the complex process of tracking, reporting, and correcting ACA data.
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Coordinate across HR, Payroll, Finance, and Benefits departments to gather the necessary data and ensure compliance.
Final Thoughts
ACA compliance is no longer just a yearly administrative task—it’s a year-round process requiring vigilance and accuracy. The IRS’s upcoming compliance trends highlight the importance of thorough data collection, error correction, and electronic reporting.
If you want to be confident in your ACA compliance program, explore ACA-Track, a proven solution designed to make ACA compliance manageable, accurate, and audit-ready in today’s regulatory environment.
