On January 3, 2025, Congress passed two laws reducing the employer reporting requirements related to the Affordable Care Act (ACA) 1095-C and 1095-B Form reporting.
The Paperwork Burden Reduction Act (H.R. 3797)
Employers and insurers are no longer obligated to send Forms 1095-B and 1095-C to individuals unless specifically requested. If a form is requested, it must be provided by either January 31 of the year following the year to which the form pertains or within 30 days of the request, whichever is later. This change applies to statements for returns related to calendar years starting after 2023.
Individuals must be notified if statements will only be provided upon request. The IRS is responsible for issuing guidance on the timing and method of this notice. Once the IRS releases the notice requirements, our compliance team will issue an analysis and additional details.
The Employer Reporting Improvement Act (H.R. 3801)
For employer and insurer reports to the IRS regarding information for each covered individual that are due after December 31, 2024, the act amends the ACA provisions to allow an individual’s date of birth to be used in place of the Tax Identification Number (TIN) if the TIN is unavailable. The act also stipulates that individuals will be considered to have consented to receive Forms 1095-B and 1095-C electronically if they have previously provided affirmative consent to electronic receipt. Additionally, the act provides more flexibility for applicable large employers (ALEs) facing proposed penalty assessments under the employer-shared responsibility mandate for taxable years starting after December 23, 2024. ALEs now have 90 days to respond to proposed assessments, extending the previous 30-day deadline. The act also establishes a six-year statute of limitations for collecting penalty assessments related to forms due after December 31, 2024.
It is not clear how states (California, Massachusetts, New Jersey, Rhode Island, and the District of Columbia) with individual mandate requirements will respond to this federal action. Employers subject to both state and federal reporting will need to await guidance from the state(s).
▪ H.R. 3797: https://www.congress.gov/118/bills/hr3797/BILLS-118hr3797enr.pdf
▪ H.R. 3801: https://www.congress.gov/118/bills/hr3801/BILLS-118hr3801enr.pdf
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