icon on In December 2024, the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act were both signed in to law. The laws seek to provide employers relief from some health plan reporting requirements under the Affordable Care Act (ACA). Both laws will apply to health plan coverage for 2024.
What do the laws say?
- Paperwork Burden Reduction Act:
- Provision of Forms 1095: Employers are only required to send employees a Form 1095-B or 1095-C if the employee requests the Forms.
- Notice of Availability of Forms 1095: For employers to take advantage of this new process, employers must provide employees with a “clear, conspicuous and accessible notice” informing them that they may request the Forms.
- Timing: If an employee requests a Form, the employer must provide the Form by January 31st or 30 days after request, whichever is later.
- Employer Reporting Improvement Act:
- DOB Substitution: When filing ACA-related tax returns, employers may substitute an employee's date of birth for a tax ID number if the employee's tax ID number is unavailable.
- Manner of Providing Forms 1905: If an employee requests a Form 1095-B or C, the Form can be provided electronically, as long as the employee consents to electronic delivery. The employee may later withdraw the consent to electronic delivery.
- Responses to IRS Penalty Assessment Letters: If the IRS provides an employer a letter assessing an ACA-related penalty, employers now have 90 days to respond to the IRS (instead of the previous 30-day deadline.)
- Statute of Limitations for ACA Penalties: There will now be a six-year statute of limitations for the IRS to assess employers with ACA-related penalties. Previously there was no statute of limitations, and employers could be found liable for such penalties indefinitely.
What are the next steps?
As the country is preparing to file its tax returns for 2024, it is important for employers to stay informed on these changes, as they will greatly ease the burden with regard to ACA tax-reporting. Although there will be significant relief this year for reporting requirements to employees, employers are still required to file their annual Forms 1094-C and 1095-C with the IRS by March 31st (February 28th if filing by paper). As always, at Howard & Howard we aim to keep our clients up-to-date with the latest changes under the ACA and other health plan laws and regulations. For more information, please contact Maria Topalovic.