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Compliance and Ops

ACA Compliance software: a practical buyer guide for US teams

1094-C and 1095-C reporting for ALEs. Here is what to look for, what to ask, and what to avoid, written for HR leaders from startup to enterprise.

Written and fact-checked by the HRTally Research TeamLast updated October 13, 2026Our editorial standards

What aca compliance software does

ACA compliance software helps applicable large employers (ALEs) track who is full time, measure affordability, and file Forms 1094-C and 1095-C with the IRS. It turns a stressful year-end scramble into a routine monthly process.

Variable-hour workforces, like restaurants, retail, and healthcare, get the most value, because figuring out who counts as full time is genuinely hard.

Signs you are ready for it

  • You have, or are close to, 50 full-time employees including full-time equivalents.
  • Many of your employees have variable hours.
  • Year-end 1095-C filing takes weeks of spreadsheet work.
  • You have received an IRS letter about employer shared responsibility.

Must-have features

ALE determination

Monthly full-time and equivalent counts.

Measurement periods

Look-back measurement for variable-hour employees.

Affordability testing

Checks against IRS safe harbors.

Form generation and e-filing

1094-C and 1095-C forms, filing, and employee delivery.

IRS notice support

Help responding to Letter 226-J and similar notices.

Payroll and benefits integration

Hours and enrollment data pulled automatically.

US compliance to keep in mind

Employers with 50 or more full-time employees, including full-time equivalents, are applicable large employers under the ACA. They must offer affordable, minimum value coverage to substantially all full-time employees or risk an employer shared responsibility payment, and they must file Forms 1094-C and 1095-C with the IRS each year. Check the IRS employer pages for current affordability percentages and deadlines, which change year to year.

This guide is general information, not legal advice. Laws change and differ by state. Confirm details with the agency linked below or with employment counsel.

How pricing usually works

Often bundled with benefits administration or payroll. Standalone tools usually price per employee per year or per form.

AI features worth asking about

AI can flag employees approaching full-time status and explain coding on Form 1095-C. Have a benefits expert review the codes before filing.

Questions to ask in every demo

  1. Show me how you track a variable-hour employee through a measurement period.
  2. Which affordability safe harbors do you support?
  3. Do you e-file with the IRS and furnish forms to employees?
  4. What help do you provide if we receive a Letter 226-J?

Red flags during evaluation

  • Hours imported once a year instead of monthly.
  • No support for look-back measurement.
  • Filing is a separate service with unclear deadlines.

Verified user ratings

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Frequently asked questions

What is an applicable large employer?
An employer with an average of at least 50 full-time employees, including full-time equivalents, in the previous calendar year.
Who counts as full time under the ACA?
Generally an employee averaging at least 30 hours per week, or 130 hours per month.
Do small employers file 1095 forms?
Employers under 50 generally do not file 1095-C, but self-insured small employers have their own reporting duties.

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