On December 23, 2024, President Biden signed the Paperwork Burden Reduction Act (H.R. 3797) and the Employer Reporting Improvement Act (H.R. 3801). Both laws modify provisions under the Patient Protection and Affordable Care Act (the ACA) related to the 1095-B and 1095-C tax forms. Below are highlights of each act.
The Paperwork Burden Reduction Act (PBRA)
This bill modifies provisions under the Patient Protection and Affordable Care Act so that employers and health insurance providers are no longer required to send tax forms to covered individuals showing proof of minimum essential coverage (1095-B and 1095-C tax forms) unless a form is requested.
Previously, employers and health insurance providers that provide minimum essential coverage must report this information for each covered individual to the Internal Revenue Service (IRS) and provide a copy of this information to the covered individual (through 1095-B and 1095-C tax forms) by January 31 of each year, unless extended. The new requirement states that an employer normally required to furnish statements would be allowed to furnish them in an alternate manner if they provide “clear, conspicuous and assessable notice” regarding how to request a copy, and that notice must be provided “not later than the latter of… January 31 of each year or 30 days from the request.”
In summary, effective for tax forms starting with the 2024 calendar year, the following PBRA changes are in effect:
- Employers are no longer required to send the 1095-B or 1095-C forms to covered individuals unless a form is requested and as long as the employer has notified covered individuals of their right to request a form; and
- If a form is requested, it must be furnished by January 31 or 30 days after the date of the request, whichever is later.
IMPORTANT NOTE: This change does not remove the requirements for individual state reporting. California, New Jersey, Rhode Island and Washington, D.C. have their own individual mandates and disclosure or reporting requirements. Guidance on whether this new federal reporting relief applies for state purposes is still needed.
The Employer Reporting Improvement Act (ERIA)
Previously, employers had to report required information on the 1095-B or 1095-C form using the covered individual’s TAX Identification Number (TIN). Additionally, if an ALE (employer with 50 or more full-time employees) received a proposed assessment from the IRS (Letter 226-J), the employer had only 30 days to respond.
Effective for tax forms due after December 31, 2024, the ERIA following changes are in effect:
- Changes the IRS current practice of allowing an individual’s date of birth to be substituted for individual’s TIN if the TIN is not available.
- Changes the IRS practice of allowing employers to offer the forms to individuals electronically if an individual affirmatively consented to receive the forms electronically at any time prior. An individual may revoke such prior consent in writing.
- Extends to 90 days the time for employers to respond after receiving their first Letter 226-J regarding a notice of proposed assessment; and
- Implements a six-year statute of limitations for collecting penalty assessments.
With the signing of these two Acts, employers can reduce some of the burden under the ACA reporting requirements.
IMPORTANT NOTE: Neither of these two new ACTS release employers’ responsibility from filing the 1095-B or C forms along with the applicable 1094-B or C forms with the IRS.
If you have yet to complete your 2024 ACA reporting filing and need assistance, check out TASC’s ACA Reporting solution and request a quote today.
