The following is a general description of the different relief options available to employers for PPACA reporting purposes. The election of relief options is completely optional and must be formally elected by the employer prior to the issuance of the 1095C forms as some of the relief options available alter the codes an employee may receive on the associated 1095C form. The following descriptions and examples are for demonstration purposes only and do not consider the particular facts and circumstances of the employer’s offer of coverage [or lack thereof]. Employers must carefully review their own internal processes to ensure that they qualify for any elected relief option. Please note that ACA Track cannot provide legal or tax advice. We advise clients to speak with their tax and/or legal adviser before determining whether your company is eligible to utilize any PPACA relief options. There are two Relief Options are available to employers for the 2025 reporting year. Employers may choose more than one relief option if they qualify, and the election of any relief is optional. Relief Options do not minimize any potential penalties associated with PPACA reporting, instead the election of certain reliefs may minimize the amount of information that needs to be reported to the IRS through the annual 1094C filing.

The Qualifying Offer Method allows employers to complete the 1095-C form under simplified rules when used in conjunction with the Federal Poverty Limit Affordability Safe Harbor. If you offer health insurance coverage to at least 95% of your full-time employees, you may be eligible to utilize the Qualifying Offer Method, provided the plan meets the following criteria:

If this relief is elected in addition to the Plan Affordability Safe Harbor of “Federal Poverty Limit” then the employer does not have to report the monthly employee cost for single only coverage on the 1095C forms. If a different affordability safe harbor is elected, or if Cobra Continuation is offered because of a job status change, then the monthly plan cost must be reported.

The 98% Offer Method allows employers to offer employers reporting relief on the 1094 -C form. To be eligible to use the 98% Offer Method, an employer must certify that they offered affordable health coverage providing minimum value to at least 98% of those employees whom they are filing a1095-C for, as well as offering minimum essential coverage to those employees’ dependents. Note that when calculating the 98%, you must consider all the months during which these individuals were employees and were not in a Limited Non-Assessment Period. When assessing affordability, health coverage is considered affordable only if it meets one of the sections4980H affordability safe harbors.

If this relief is elected, then the employer does not need to report the 4980H Full Time Monthly Employee headcounts on the 1094C transmittal form. Please note that Total Employee Monthly headcounts are still required to be reported on the 1094c transmittal form.

This document is designed to highlight ACA Reporting matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.