Just before the holidays, two bills impacting reporting under the Affordable Care Act (“ACA”), H.R. 3801 (EMPLOYER REPORTING IMPROVEMENT ACT) and H.R. 3797 (PAPERWORK BURDEN REDUCTION ACT), passed both houses and were sent to the President for signature. President Biden signed the bills into law, making the changes effective for the 2025 reporting year.
As a reminder, the ACA requires certain employers that provide minimum essential coverage to furnish Forms 1095-C or 1095-B to covered individuals. For more background on these requirements, you can read our prior blog here. Prior to the passage of the Paperwork Burden Reduction Act, Forms 1095-C and 1095-B were required to be delivered directly to the individual through the mail or electronically via email. However, an employer is required to obtain consent for electronic delivery.
Under the new laws, the distribution requirements for Form 1095 B and C can now be met by posting a notice of availability that is “clear, conspicuous and accessible.” However, the IRS has not yet issued guidance, as to how and when the notice must be distributed.
Upon request by an employee, the form must be provided by January 31st or within 30 days of the request (whichever is later). This year, an employer must post the notice by January 31, 2025, and retain the notice in the same location on its website through October 15, 2025.
In addition to the distribution requirements, employers are required to report coverage information to the Internal Revenue Service using a covered individual’s tax identification number (TIN). Prior to the new law, employers were required to show there were significant mitigating factors or events beyond the control of the employer that gave them reasonable cause to not report using an employee’s TIN. Under the Act, an individual’s date of birth can now be used in place of an employee's TIN if not available without first having to establish reasonable cause for self-funded coverage reporting purposes. Additionally, the law provides employers 90 days to respond to the IRS for 226J Employer Shared Responsibility Payment penalty letters.
These new rules will provide a reduction in reporting requirements and relief for employers.
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