Affordable Care Act (ACA) compliance places specific reporting responsibilities on insurers and employers that provide minimum essential coverage. One of the key requirements is filing Form 1095-B. Managing this process manually can be time-consuming and error-prone, which is why 1095-B software has become essential for organizations seeking accuracy and efficiency.
In this guide, we’ll explore what 1095-B software is, how it works, its benefits, available types, regulatory requirements, industry use cases, challenges, and future trends—helping you make informed compliance decisions.
What Is 1095-B Software?
1095-B software is a specialized compliance solution designed to automate the preparation, validation, and filing of IRS Form 1095-B. This form reports individuals who are enrolled in minimum essential health coverage, typically provided by insurers, government agencies, or self-insured employers.
Unlike manual methods, form 1095-B software ensures accurate data handling, code validation, and timely submission to the IRS while reducing compliance risk.
What Does Form 1095-B Report?
Form 1095-B reports:
- Individuals covered under minimum essential coverage
- Coverage provider information
- Monthly coverage details
- Policyholder identification
Using reliable 1095-B software ensures all required information is captured correctly.
Why Organizations Need 1095-B Software
ACA reporting requirements can be complex, especially for organizations managing large populations. Errors or late filings can result in IRS penalties.
Challenges Without 1095-B Software
- Manual data entry errors
- Missed filing deadlines
- Difficulty tracking covered individuals
- IRS rejections due to formatting issues
Form 1095-B software minimizes these risks by automating workflows and enforcing compliance rules.
Benefits of Using 1095-B Software
Modern 1095-B software provides both compliance and operational advantages.
Increased Accuracy
Automated validations ensure data meets IRS specifications before submission.
Time Efficiency
Bulk imports and automated form generation reduce administrative workload.
IRS-Ready Electronic Filing
Most 1095-B software platforms support direct electronic filing with the IRS.
Secure Data Management
Sensitive health coverage data is stored securely and remains easily accessible.
Scalability
From small providers to large insurers, 1095-B software scales with business growth.
Types of 1095-B Software
Different organizations have different reporting needs. Below are common types of 1095-B software.
Cloud-Based 1095-B Software
- Accessible from any location
- Automatic updates
- Ideal for remote and distributed teams
Standalone ACA Reporting Software
- Focused exclusively on ACA compliance
- Preferred by CPAs and compliance professionals
Integrated Payroll and Benefits Software
- Syncs with payroll or HR systems
- Reduces duplicate data entry
1095-B Drake Software
1095-B Drake software is commonly used by tax professionals to prepare and file ACA forms alongside other tax returns. It offers structured workflows, validation tools, and professional-grade compliance support.
How Form 1095-B Software Works
Understanding the workflow helps organizations choose the right solution.
Step 1 – Data Collection
Coverage and individual data are imported from internal systems or spreadsheets.
Step 2 – Coverage Tracking
The software tracks monthly coverage details required for reporting.
Step 3 – Validation and Error Checks
Built-in IRS rules validate fields and flag inconsistencies.
Step 4 – Form Generation
Forms are generated in IRS-approved formats.
Step 5 – Filing and Distribution
Forms are filed with the IRS and delivered to covered individuals securely.
Cost of 1095-B Software
Pricing varies depending on features and reporting volume.
Common Pricing Models
- Per-form pricing
- Annual subscriptions
- Volume-based pricing
- Enterprise licensing
Factors That Affect Cost
- Number of covered individuals
- Integration requirements
- E-filing and correction support
- Multi-entity reporting
Investing in reliable form 1095-B software often costs less than potential IRS penalties.
IRS Regulations and Compliance Requirements
Form 1095-B filing is governed by ACA Sections 6055. 1095-B software helps organizations comply with:
- Annual IRS filing deadlines
- Electronic filing requirements
- Correct reporting of minimum essential coverage
- Proper form distribution to individuals
Failure to comply can result in fines, making 1095-B software a critical compliance tool.
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Industries That Use 1095-B Software
Several industries rely heavily on 1095-B software.
Health Insurance Providers
Manage large volumes of covered individuals efficiently.
Government Agencies
Report coverage for public health programs.
Self-Insured Employers
Track coverage for employees and dependents.
Accounting and Tax Firms
Use form 1095-B software to manage filings for multiple clients.
Challenges When Using 1095-B Software
While powerful, 1095-B software still requires careful implementation.
Data Accuracy
Incorrect source data can impact form accuracy.
Setup and Learning Curve
Advanced platforms may require training.
Integration Limitations
Not all systems integrate seamlessly with existing tools.
Selecting the right provider minimizes these challenges.
Future Trends in 1095-B Software
Technology continues to shape the future of 1095-B software.
AI-Driven Validation
Smarter error detection and automated corrections.
Real-Time Coverage Monitoring
Continuous tracking rather than annual reconciliation.
Enhanced Security Features
Stronger data protection and compliance controls.
Frequently Asked Questions (FAQs)
Who needs 1095-B software?
Insurers, government agencies, and self-insured employers reporting minimum essential coverage.
Is electronic filing mandatory?
Yes, for organizations meeting IRS e-file thresholds.
Can corrections be filed using the same software?
Most 1095-B software supports corrections and resubmissions.
Is 1095-B Drake software suitable for professionals?
Yes, it is widely used by tax professionals for ACA reporting.
Conclusion
ACA reporting doesn’t have to be complicated. The right 1095-B software simplifies compliance, improves accuracy, and reduces administrative burden. Whether you are an insurer, self-insured employer, or tax professional, investing in reliable form 1095-B software ensures smooth filing and peace of mind.
If ACA compliance is part of your responsibility, choosing a trusted 1095-B software solution is a smart step toward long-term efficiency and IRS compliance.
