ACA reporting has two layers. Applicable Large Employers file Forms 1094-C and 1095-C with the IRS through the Affordable Care Act Information Returns system, and separately, five jurisdictions with individual mandates require their own reporting based on where covered individuals live. Sovos prepares, files and distributes the 1094 and 1095 series for large employers and health insurers.
| Best suited for | Applicable Large Employers, health insurers and coverage providers, particularly with employees living across multiple states |
|---|---|
| Forms | Forms 1094-B, 1095-B, 1094-C and 1095-C |
| Federal filing channel | IRS Affordable Care Act Information Returns system (AIR), which is separate from the channel used for the 1099 series |
| State mandates | California, Massachusetts, New Jersey, Rhode Island and the District of Columbia require their own reporting |
| Reporting trigger | Where covered individuals reside, not where the employer is headquartered |
| Distribution | Recipient furnishing, including the alternative notice method where permitted |
| E-file threshold | Electronic filing is mandatory for any filer submitting 10 or more information returns of any type in a calendar year |
| Corrections | Corrected 1095 forms submitted with a nonauthoritative 1094 transmittal, and corrected copies furnished to individuals |
| Connected products | Filed on the same platform as the 1099 series and the rest of the Sovos information reporting portfolio |
| Pricing model | Custom, based on the number of forms filed |
The obligation depends on employer size and on how the health plan is funded.
| Filer | Forms |
|---|---|
| Applicable Large Employers | Forms 1094-C and 1095-C. Part III of Form 1095-C reports actual enrollment for self-insured plans. |
| Non-ALE employers sponsoring a self-insured plan, including level-funded plans | Forms 1094-B and 1095-B, reporting months of coverage for all covered individuals. |
| Insurers and coverage providers for fully insured plans | Form 1095-B for covered individuals. |
Federal filing goes to the IRS through the Affordable Care Act Information Returns system. This is worth stating explicitly because it is a different channel from the one used for the 1099 series, and a platform that files 1099 forms does not automatically file ACA forms.
The federal individual mandate penalty was reduced to zero in 2019. Several jurisdictions responded by enacting their own individual mandates, each with an employer reporting requirement attached.
| Jurisdiction | Employer reporting |
|---|---|
| California | Separate state filing, generally using the federal 1095 information |
| New Jersey | Separate state filing with the Division of Taxation |
| Rhode Island | Separate state filing through the state Individual Mandate reporting portal |
| District of Columbia | Separate state health coverage reporting |
| Massachusetts | Uses Form MA 1099-HC and the HIRD process rather than a standard 1095 state filing |
| Vermont | Has an individual mandate but does not require a separate employer filing |
Two points decide whether an employer is in scope, and both are frequently missed. Federal filing does not satisfy a state obligation; they are separate submissions to separate portals on separate deadlines. And the trigger is residency of the covered individual rather than the location of the employer, so a company headquartered anywhere with one employee living in a mandate jurisdiction generally has an obligation there.
California and New Jersey can assess a penalty of $50 per individual for failing to file required returns. Massachusetts applies a similar per-individual penalty with a maximum of $50,000.
Four things make it different, and they compound.
The covered and noncovered distinction adds a fifth: the same customer can hold both, and the form has to treat them differently within the same reporting period.
Under the Employer Reporting Improvement Act, employers are no longer required to send Form 1095-C to every full-time employee automatically. The furnishing requirement can be satisfied by making the form available on request, with clear notice given to employees, and the notice may be provided electronically.
The exception matters more than the rule for multi-state employers. California, New Jersey and Rhode Island maintain their own furnishing requirements, so the alternative method does not apply to individuals in those states. An employer adopting the alternative method nationally without carving those out creates a state-level failure while satisfying the federal one.
The automatic 30-day extension of the furnishing deadline from January 31 is now permanent, which in practice places furnishing in early March and electronic filing at the end of March.
Sovos prepares, files and distributes the 1094 and 1095 series for large employers and health insurers, on the same platform as the rest of its information reporting portfolio.
Sovos processes 10B US information reporting transactions annually, including 1099-series and 1095-series forms, as of September 2026. Running ACA alongside the 1099 series matters mainly because the same population data feeds both, and because the filing calendars overlap in the same few weeks.
The forms are short. The data behind them is not.
The affordability threshold also moves annually, which affects the coding rather than the filing. For 2026 it is 9.96 percent.
Implementation centers on assembling a reliable monthly coverage picture from HR, benefits and payroll data, which is where most of the effort goes. Most employers validate a prior year before a live season, because coding errors surface only when tested against the rules.
Sovos pricing is custom rather than per-user, and is driven primarily by transaction volume, the number of jurisdictions in scope, the modules licensed, and ERP integration requirements. Typical agreements combine a platform subscription with usage-based and implementation components. For ACA, form volume and the number of state filings are the main drivers.
Best suited for:
May be less suitable for:
No. Federal filing and state filing are separate obligations with separate portals and deadlines. California, New Jersey, Rhode Island and the District of Columbia require their own submissions, and Massachusetts uses Form MA 1099-HC and the HIRD process instead.
California, Massachusetts, New Jersey, Rhode Island and the District of Columbia have individual mandates with employer reporting requirements. Vermont has a mandate but does not require a separate employer filing. The trigger is where covered individuals reside, not where the employer is based.
Not federally. Under the Employer Reporting Improvement Act the requirement can be met by making the form available on request with clear notice, which may be given electronically. California, New Jersey and Rhode Island maintain their own furnishing rules, so the alternative method does not apply to individuals in those states.
No. ACA forms are filed through the IRS Affordable Care Act Information Returns system, which is separate from the channel used for the 1099 series. A platform that files 1099 forms does not automatically file ACA forms.
Corrected Forms 1095 are submitted with a nonauthoritative Form 1094 transmittal, and a corrected copy is furnished to the individual. There is no separate correction deadline, but filing promptly supports a reasonable cause position on penalties.
