2025 Health Insurance Compliance Guide: Key Dates & Best Practices for Small and Large Employers
Keeping up with health insurance compliance deadlines is essential for HR teams in small and mid-sized businesses. Missing deadlines can result in hefty fines and administrative headaches. This guide outlines key compliance activities for both small group (under 50 employees) and large group (50+ employees) plans, helping HR teams set reminders and stay proactive throughout the year.
January: Start the Year with Compliance Checks
Small & Large Groups
Section 105(h) Nondiscrimination Testing – Employers with self-funded or level-funded health plans must ensure benefits are not disproportionately favoring highly compensated employees. Non-compliance can result in penalties up to $100 per day per affected individual.
Transparency in Coverage (TiC) Machine-Readable Files – Employers with self-funded/level-funded health plans must ensure their third-party administrator is updating and publishing machine-readable files with plan cost details. Non-compliance can result in a $100 per day per participant penalty.
Large Groups Only
Form W-2 Reporting of Health Costs – Employers who filed 250+ W-2s in the previous year must report the total cost of employer-sponsored health coverage on employees’ W-2s. Failure can result in $200 per incorrect W-2, with a max penalty of $3 million.
February: IRS Reporting for Non-ALEs
Small Groups Only
Section 6055 Reporting (Paper Filing Deadline: February 28) – Employers offering self-insured/limited premium plans, including QSEHRAs and ICHRAs, must report to the IRS using Forms 1094-B and 1095-B. Failure results in a $330 per form penalty.
March: Employee Notifications & IRS Electronic Reporting
Small & Large Groups
Medicare Part D Creditable Coverage Disclosure (March 1) – Employers offering prescription drug coverage must disclose to CMS whether their plan is creditable or non-creditable within 60 days of the new plan year. No enforcement penalties apply for late filing.
M-1 Filing for Multiple Employer Welfare Arrangements (MEWAs) (March 1) – If your business operates a MEWA, you must file Form M-1. Failure can result in penalties up to $1,942 per day.
6055/6056 Employee Statements (March 3) – Applicable Large Employers (ALEs) must distribute 1095-C forms to covered employees. Failure results in up to a $330 penalty per form.
6055/6056 Electronic IRS Reporting (March 31) – Employers filing more than 10 forms must submit them electronically. Non-compliance results in $330 per form penalties.
April: Location-Specific Mandates
Small & Large Groups
State-Specific Individual Mandate Reporting (April 30) – Employers with employees in Washington D.C. and San Francisco must report 1095-B/1095-C data to local tax agencies. San Francisco imposes a $500 per quarter penalty for non-compliance.
June: Prescription Drug Cost Reporting
Small & Large Groups
Rx Drug Reporting to CMS (June 1) – Employers must report prescription drug costs and healthcare spending to CMS. Most rely on TPAs or pharmacy benefit managers (PBMs) for submission but should get guarantees in writing. Non-compliance results in a $100 per day per participant penalty.
July: Mid-Year IRS Filings
Small & Large Groups
PCOR Fee Payment (July 31) – Employers with self-insured plans must pay the Patient-Centered Outcomes Research Institute (PCORI) fee using IRS Form 720. Failure results in interest and penalties.
Form 5500 (July 31) – Large employers (100+ participants) must file Form 5500 unless exempt. Late filings can incur penalties up to $2,670 per day.
September: Employer Rebates & Summary Reports
Small & Large Groups
Medical Loss Ratio (MLR) Rebates (September 30) – Employers receiving a premium rebate from their insurer must ensure the rebate is used for the benefit of employees within 3 months. Misuse can lead to ERISA penalties.
Summary Annual Report (SAR) (September 30) – Employers subject to Form 5500 filing must distribute an SAR to employees within 9 months of plan year-end. Failure can result in penalties up to $110 per day.
October: Medicare Part D Notices
Small & Large Groups
Medicare Part D Notices to Participants (October 15) – Employers must notify employees whether their prescription drug coverage is creditable to avoid late enrollment penalties. No employer penalties apply, but employees may face Medicare penalties.
November-December: Preparing for the New Year
Small & Large Groups
Employer Mandate Compliance Review (Nov 1 – Dec 31) – Employers must determine if they qualify as an Applicable Large Employer (ALE) (50+ full-time employees) for the next plan year. Failure to offer minimum essential coverage may result in ACA penalties.
FTE Status Determination (Nov 1 – Dec 31) – ALEs with variable-hour employees should conduct an annual measurement period review to determine full-time eligibility.
HIRD Reporting (Nov 15 – Dec 15, Massachusetts Employers) – Employers with 6+ employees in Massachusetts must submit a Health Insurance Responsibility Disclosure (HIRD) form to the state. No penalties apply.
December: Year-End Compliance
Small & Large Groups
Gag Clause Prohibition Attestation (Dec 31) – Employers must confirm compliance with federal gag clause prohibitions (prohibiting restrictions on price transparency and claims data access) by submitting an attestation to CMS. Non-compliance results in $100 per day per participant penalties.
Final Thoughts: How to Stay Ahead of Compliance
Set Calendar Reminders – Add these deadlines to your HR team’s calendar to prevent last-minute scrambling.
Partner with Experts – Work with TPAs, benefits brokers, and payroll providers to automate reporting where possible.
Monitor Plan Affordability & Employee Eligibility – If your company is approaching 50+ employees, begin tracking FTE status now to avoid ACA penalties next year.
By staying proactive and following this guide, your business can avoid compliance risks, reduce penalties, and ensure a smooth health benefits experience for employees.
Would you like a customized compliance calendar for your business? Let’s connect and build a tailored approach to ensure you’re covered for 2025!