On December 10, 2024, Congress passed two bills to reduce employer reporting requirements related to the Affordable Care Act (ACA). President Biden is expected to sign the bills into law reducing both employer and carrier responsibilities for 1095-C and 1095-B form reporting. Currently, under the ACA, employers and carriers must send reports to the IRS on the coverage provided and send a copy of the reporting to the covered employees. Employers and carriers may provide a paper copy of the form or a means for the covered employee to agree to receive an electronic copy. The proposed changes will require the delivery of these forms only upon request. Employers will also be allowed to use a date of birth in place of the tax identification number (TIN) on Form 1095 -C or 1095-B if the TIN is unavailable.
The Paperwork Burden Reduction Act (H.R. 3797) stipulates that Form 1095-C or Form 1095-B may be provided to individuals only upon request. Employers will no longer be required to deliver these Forms to a covered individual unless the individual requests it.
The Employer Reporting Improvement Act (H.R. 3801) will allow a date of birth to be used instead of a TIN, typically a social security number, on Form 1095 -C or 1095-B when the TIN is unavailable.
The IRS instructions for 2024 reporting specify that Form 1095s must be distributed to full-time employees and covered individuals by March 3, 2025, and Form 1094, along with all Form 1095s, must be submitted electronically to the IRS by March 31, 2025.
It is not clear how the 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).
The bills have not yet been signed into law by President Biden. Employers should consider providing Forms 1095-C as they have in past years and then shift to the newer methods for calendar year 2025 reporting, which will be due in 2026. It is unclear whether the IRS will have enough time to post the necessary guidance for these acts to take effect for the 2024 ACA season. The TRI-AD team is monitoring the regulations and will provide further commentary when final guidance is issued.
▪ 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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