On January 3rd, Congress passed two bills that decrease the amount of reporting that employers and insurers must complete under the Affordable Care Act (ACA). The Paperwork Burden Reduction Act and the Employer Reporting Improvement Act, which the President signed into law, change employer and insurer notices to individuals required by the ACA.
Under the ACA, employers and insurers who provide minimum essential coverage (MEC) must annually report certain information to the IRS about each covered individual. Additionally, the ACA requires employers and insurers to provide each covered individual with Forms 1095-B and 1095-C.
The Paperwork Burden Reduction Act states that employers and insurers are no longer required to provide all covered individuals with proof of MEC through Forms 1095-B and 1095-C. Instead, employers and insurers must give individuals timely notice that they can request a form. If requested, employers and insurers must provide the form to an individual before January 31st of the year following the year to which coverage relates or within 30 days of the request, whichever is later. The change applies to all calendar years after 2023.
Federal regulations already allowed employers and insurers to send Form 1095-B, as well as Form 1095-C to individuals other than full-time employees, only on request upon meeting certain conditions. The Paperwork Burden Reduction Act amends the ACA to recognize this option and extends it to Form 1095-C for full-time employees.
The Employer Reporting Improvement Act allows employers and insurers to substitute an employee’s date of birth for the tax identification number (TIN) if the TIN is unavailable. Furthermore, if individuals affirmatively consent to the electronic delivery of Forms 1095-B and 1095-C at any time, employers and insurers may continue to send the forms to them electronically.
This legislation also adds some flexibility for applicable large employers (ALEs). In taxable years beginning after December 23, 2024, ALEs have 90 days to respond to proposed penalty assessments under the employer-shared responsibility provisions, an increase from the previous 30-day response period. Furthermore, the Employer Reporting Improvement Act sets a six-year statute of limitations to collect penalty assessments for all forms due after December 31, 2024.
Since these Acts were immediately effective and impact 2024 ACA reporting forms due in 2025, employers must evaluate these options quickly and determine whether to utilize them. The IRS will provide guidance on the notices that insurers and employers may send to individuals if they choose to do so.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution for your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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