Open Enrollment Mistakes That Show Up on Your ACA Filing

Open enrollment mistakes don’t usually surface during open enrollment. They surface months later, when the data collected in Q4 becomes the basis for Form 1095-C, and a coverage-offer discrepancy triggers an IRS penalty notice for something that happened back in November.

Here are the enrollment-stage mistakes most likely to become an ACA filing problem later. For the full checklist covering both, see our ACA & Open Enrollment Compliance page, part of the Year-End Payroll and Tax Season Guide.

Recording an offer of coverage that wasn’t actually made correctly

Form 1095-C asks whether coverage was offered, and to whom. If an eligible employee’s enrollment window opened late, closed early, or the offer wasn’t documented consistently with when it was actually communicated, the 1095-C data can misstate what happened, even if the underlying benefits were administered correctly.

Not tracking measurement periods for variable-hour employees

Applicable Large Employers have to track measurement periods to determine full-time status for variable-hour employees. If that tracking lapses during open enrollment, when attention is on elections rather than eligibility math, an employee who crossed into full-time-equivalent status can be missed for a coverage offer entirely, which shows up as a gap on the 1095-C.

Affordability miscalculated against the wrong safe harbor

The affordability threshold changes annually (10.22% for 2027, up from 9.96% in 2026), and it’s measured against a specific safe harbor: W-2 wages, rate of pay, or the federal poverty line. Using last year’s percentage, or applying the wrong safe harbor to a specific employee’s situation, produces a 1095-C that reports the plan as unaffordable when it may not be.

Enrollment data that never made it into the payroll deduction

An employee completes enrollment, but the deduction never gets set up correctly in payroll, or gets set up at the wrong amount. Beyond the payroll correction this requires, it also creates a mismatch between what the plan says was offered and what actually appeared on the employee’s pay, which is exactly the kind of discrepancy that draws IRS attention.

The fix is treating enrollment data as filing data from day one

Most of these mistakes come from treating open enrollment as an HR event and ACA filing as a separate tax event, handled by separate people months apart. Automated tracking that connects eligibility, enrollment, and payroll deductions in one system catches these discrepancies as they happen instead of during a March filing crunch.

Frequently Asked Questions

This article is for general informational purposes only and is not legal, tax, or accounting advice. Affordability percentages and penalty amounts are set annually by the IRS. Consult a qualified professional for guidance specific to your situation.

Disclaimer: Any product roadmap or future plans provided herein are for informational purposes only. They do not represent a commitment to deliver any material, code, feature, or functionality. Plans may change without notification. The development, release and timing of any features or functionality described remain at the sole discretion of Netchex, its affiliates, and partners. Netchex does not give legal, tax, or accounting advice. You are responsible for ensuring your use of Netchex product meets your individual business and compliance requirements.

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