If you’re an employer with a growing team, ACA compliance isn’t optional—it’s required. And for Applicable Large Employers (ALEs), 2025 brings updated guidelines and reporting requirements you need to understand to stay penalty-free and provide the right level of coverage to your workforce.

This guide breaks down what it means to be an ALE in 2025, what’s changed, and how to keep things simple, compliant, and cost-effective.

 

What Is an Applicable Large Employer (ALE)?

Under the Affordable Care Act (ACA), an Applicable Large Employer is defined as a company that had an average of 50 or more full-time employees (or full-time equivalents) during the previous calendar year.

If you hit that threshold—even just once—you’re legally required to:

  1. Offer Affordable and Minimum Value health coverage to full-time employees and their dependents. 
  2. File ACA forms with the IRS annually (Forms 1094-C and 1095-C). 

Failing to meet either requirement can trigger steep penalties. The good news? With the right support, compliance doesn’t have to be complicated.

 

ACA Compliance Updates for 2025

Here are the key ACA updates ALEs need to know this year:

1. Affordability Threshold Adjusted

The affordability threshold for 2025 is expected to be around 8.39% of an employee’s household income (subject to IRS confirmation later in the year). This means the cost of self-only coverage under your lowest-cost plan cannot exceed this percentage of income.

Tip: Use the federal poverty line or safe harbor methods to determine affordability if you don’t know employee household income.

 

2. Penalties Are Increasing

The IRS penalties for non-compliance continue to rise with inflation.

For 2025:

  • 4980H(a) penalty (failure to offer coverage): ~$2,970 per full-time employee (after first 30). 
  • 4980H(b) penalty (coverage not affordable or doesn’t meet minimum value): ~$4,460 per affected employee. 

These penalties are annual, per employee, and can add up quickly—especially if your reporting is inaccurate or late.

 

3. Electronic Filing is Mandatory

As of 2024, most employers must file ACA forms electronically. This continues into 2025 for any business filing 10 or more returns total (W-2s, 1099s, 1095-Cs, etc.).

If you’re still mailing in forms, it’s time to shift to digital or risk IRS rejections and penalties.

 

4. Form 1095-C Still Required

You must furnish Form 1095-C to each full-time employee, detailing their health coverage for each month of the year. Also, file Form 1094-C with the IRS as a transmittal summary.

Deadlines to watch:

  • Employee distribution: Due by March 3, 2025 (since Jan 31 falls on a Friday). 
  • IRS electronic filing: Due by April 1, 2025. 

 

What Counts as “Affordable” and “Minimum Value” in 2025?

To avoid ACA penalties, your health plan must:

  • Cover at least 60% of the total allowed cost of benefits (this is the “minimum value” requirement). 
  • Be affordable based on the IRS affordability threshold mentioned above. 

Offering a bare-bones or high-deductible plan without proper employer contributions might fail both tests—and trigger fines.

 

Simplifying ACA Compliance with the Right Tools

Managing ACA compliance manually—especially tracking hours, eligibility, and affordability—can be a huge lift. That’s why many ALEs are turning to platforms like GoBenefits for automated solutions that:

  • Track full-time status and look-back periods 
  • Manage employee elections and deductions 
  • Generate and file 1094-C and 1095-C forms 
  • Integrate with payroll for clean data reporting 

 

ACA Compliance Myths (And the Truth)

Myth Reality
“I only have 50 employees, so I’m safe.” It’s 50 full-time equivalents, including part-timers.
“If no one uses the coverage, I’m still compliant.” Usage doesn’t matter—offering compliant coverage is required.
“We use a broker, so we don’t need to worry about compliance.” Brokers help with plans, but reporting and tracking is your responsibility.

 

How GoBenefits Helps ALEs Succeed in 2025

At GoBenefits, we’re more than just a benefits platform—we’re your partner in ACA success. We work with ALEs to:

  • Set up affordable, compliant health plans (including ICHRA and level-funded options) 
  • Automate ACA reporting and document filing 
  • Support open enrollment and year-round compliance 
  • Provide dedicated account management to guide you every step of the way 

Schedule a consultation to see how GoBenefits can take the complexity out of ACA compliance for 2025 and beyond.

Get a Quote