Last week, I came across an audit report that genuinely shocked me. The City of Shreveport just received a $1.6 million penalty from the IRS for failing to file their Form 1095-C on time.
As someone who professionally helps organizations find solutions to navigate ACA compliance, I've seen plenty of penalties, but this one stands out because it was entirely preventable.
According to the audit findings, Shreveport's penalty came down to two critical failures: “inadequate monitoring procedures and turnover in the accounting and HR departments.”
These aren't unique problems. Actually, these are challenges I hear about regularly:
The reality is that ACA compliance requires continuous monitoring of employee hours, coverage offers, affordability calculations, and numerous other moving parts. It's not a once-a-year activity.
After working with hundreds of organizations, I've learned that Excel spreadsheets and manual tracking systems create significant compliance risks.
The penalty structure for 2026 filing is no joke. Failure to file now costs $340 per return, which means a mid-sized employer with 200 employees faces $68,000 just for being late. If the IRS determines there was "intentional disregard," penalties jump to $680 per return.
The organizations that face major penalties aren't necessarily negligent. They are often dealing with staff turnover, complex employee situations, and outdated processes that can't keep pace with regulatory requirements.
Here's specifically how our solution addresses the issues that led to Shreveport's penalty:
Automated Employee Tracking: ACA Reporter continuously monitors employee hours across all locations, automatically identifying when employees approach full-time status. No manual spreadsheets, no missed thresholds.
Knowledge Retention: When staff members leave, their institutional knowledge remains in the system. All compliance data, processes, and history stay intact regardless of personnel changes, and our ACA Specialists are always there to help.
Pre-submission Validation: The system identifies errors before they become penalties. Incorrect codes, missing data, calculation errors—ACA Reporter flags these issues during preparation, not after IRS submission.
Let me put this in perspective: For a few thousand dollars annually, ACA Reporter could have saved Shreveport $1.6 million.
Our typical client invests less than $6,000 annually for comprehensive ACA compliance management. Shreveport's penalty would have covered our services for over 250 years.
But beyond the financial consideration, think about your peace of mind, risk mitigation, and ability to allow your team to focus on strategic and critical initiatives rather than compliance mechanics.
If you're confident in your current process, I'd encourage you to consider these questions:
Organizations that excel invest in prevention rather than hoping to avoid audits.
If you're interested in learning how ACA Reporter can strengthen your compliance program for the 2025 filing season, I'd welcome the opportunity to discuss your specific situation and demonstrate our solution, because when it comes to ACA compliance, the best penalty is the one you never receive.
Jet Valentine is a National Sales Executive at Points North, makers of ACA Reporter. Jet has helped hundreds of organizations successfully find solutions to navigate the complexities of ACA Compliance while avoiding costly penalties.