Key Takeaways
- Counties, cities, and school districts with 50 or more full-time or full-time-equivalent employees are Applicable Large Employers (ALEs) under the ACA and must file Forms 1094-C and 1095-C every year.
- The FTE count trips up these three entity types in different ways — substitute teachers, seasonal parks staff, and part-time first responders all factor into the math differently than a typical private employer.
- A recent federal law change means ALEs can now satisfy the employee-furnishing requirement by posting a website notice instead of automatically mailing every full-time employee a form.
- The IRS follows a consistent annual pattern: employee copies of Form 1095-C are due by March 2, and IRS filing is due by February 28 (paper) or March 31 (electronic) of the year following the coverage year.
- Late or incorrect filings carry real penalties, with the amount depending on how quickly an error is corrected, and steeper fines for intentional disregard. Worse, the IRS may assume that an employer is out of compliance with the pay or play penalties for employers who don’t offer the right coverage to employees.
- Note that ALEs still must offer minimum essential coverage that provides minimum value and is affordable to team members, or else face the pay or play penalties that still apply to employers.
Form 1095-C Isn’t Just a Private-Sector Problem
When people hear “ACA reporting,” they tend to picture large corporations and HR departments buried in compliance paperwork. But the Affordable Care Act’s employer mandate doesn’t carve out an exception for local government. If your county, city, or school district has 50 or more full-time or full-time-equivalent employees, you’re an Applicable Large Employer in the eyes of the IRS — and that comes with an annual reporting obligation that’s easy to underestimate.
Most Ohio counties and cities, and a large share of school districts, clear that 50-employee threshold without much thought, simply because of how public payrolls are structured across departments, buildings, and seasonal staff. That means Form 1095-C isn’t optional. It’s a recurring compliance task, and one that tends to land on finance staff who are also closing out year-end, preparing for audit, and juggling a dozen other deadlines.
The FTE Count Isn’t as Simple as It Sounds
“50 or more full-time equivalent employees” sounds like a straightforward headcount. In practice, it’s one of the trickiest parts of ACA compliance for these three entity types, each for its own reason:
- School districts — substitute teachers, bus drivers, cafeteria staff, and coaches are often treated as part-time or seasonal on the org chart, but many still count toward the FTE calculation, and some can trigger full-time status in individual months even without being full-time for the year.
- Counties — multiple bargaining units, seasonal fairgrounds and parks staff, and elected officials all complicate the headcount. Elected officials generally aren’t counted as common-law employees for ALE purposes, but that determination isn’t automatic and depends on the facts.
- Cities — seasonal parks and recreation staff, part-time or volunteer fire and EMS personnel, and positions split-funded across departments all need to be counted consistently, not department by department.
Getting this calculation wrong in either direction is a problem. Undercounting can mean missing ALE status entirely and skipping a required filing, while overcounting can mean unnecessary reporting or misclassifying who needs a 1095-C.
Who Has to File, and What They’re Filing
As an ALE, your entity needs to file two related forms each year:
- Form 1095-C — details the health coverage offered (or not offered) to a full-time employee, month by month, along with the employee’s share of the premium cost.
- Form 1094-C — the transmittal form filed with the IRS that summarizes the 1095-Cs and confirms whether the entity met its coverage obligations for at least 95% of full-time employees.
Getting these right requires pulling together information most entities already have scattered across payroll, benefits administration, and HR systems: full-time status determinations, monthly coverage offers, lowest-cost plan premiums, and which safe harbor method is being used to test affordability.
A Real Change Worth Knowing About
For years, ALEs had to automatically furnish a paper or electronic copy of Form 1095-C to every full-time employee. That’s no longer the only option. Under a recent federal law, employers can instead post a clear, easily accessible notice (e.g., on a public-facing website, with contact information for requesting a copy) and furnish the form only when an employee actually asks for one.
This isn’t automatic relief; it requires meeting specific notice requirements and responding to requests within a set window. But for larger public entities that have been mailing hundreds of forms every March, it’s worth evaluating whether the notice approach is a better fit for 2026 reporting.
The Dates That Matter
The IRS deadline pattern has held steady for the last several cycles, and it applies again for 2026 coverage reported in 2027:
- March 2 — deadline to furnish Form 1095-C to employees (or post the alternative notice, if using that method)
- February 28 — IRS filing deadline if filing on paper
- March 31 — IRS filing deadline if filing electronically
That last point matters more than most entities realize: if you’re filing 10 or more information returns in total across all types (not just 1095-Cs), the IRS requires electronic filing. Given how many W-2s and 1099s a typical government entity issues, almost every ALE-sized public employer falls into this bucket, whether they’ve registered for e-filing or not.
What It Costs to Get Wrong
The IRS doesn’t treat late or inaccurate 1095-C filings as a minor paperwork issue. Penalties apply separately to a late or incorrect employee statement and a late or incorrect IRS filing, and they scale with how quickly the mistake is fixed; smaller if corrected soon after the deadline, larger the longer it goes uncorrected, and steepest if the IRS determines the failure was intentional. For an entity with dozens or hundreds of full-time employees, even a modest per-form penalty adds up fast across an entire workforce.
Correctable errors (e.g., a wrong Social Security number, a missed dependent, an incorrect coverage code) are common and usually fixable without much drama, provided they’re caught and corrected promptly. The bigger risk is the entity that doesn’t file at all, or files months late because the data wasn’t ready.
Building a Cleaner Process for 2026
The entities that handle this well don’t treat 1095-C as a year-end fire drill. They:
- Confirm full-time/FTE headcount early, since ALE status is based on the prior year’s average
- Reconcile coverage offer and premium data monthly rather than reconstructing it in the new year
- Decide now whether the new website-notice option makes sense, rather than defaulting to the old process out of habit
- Document which affordability safe harbor is being applied, and apply it consistently
None of this is complicated in isolation. It’s the coordination across payroll, HR, and finance that trips entities up.
Let’s Get Ahead of This Together
Rea’s Government advisors work with municipalities, schools, and public entities across Ohio on exactly this kind of year-end compliance. Not just to get the forms filed, but to build a process that holds up year after year. If you’re not confident in where your 1095-C data stands right now, reach out to our team and let’s talk through it well before the deadline gets close.
About the Author
Jared Cottrell, CPA is Managing Director of Rea’s Newark office, where he has spent more than 25 years focused on governmental accounting and auditing. He works closely with cities, counties, school districts and other public entities across Ohio on financial statement preparation, accounting, and compliance matters. Jared is active in the Ohio Government Finance Officers Association, where he has served as Treasurer since 2014.
