Two New Laws Ease Employer ACA Reporting
On December 16, 2024, congress passed the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act (“Act”). Both Acts significantly alter ACA reporting requirements. President Biden is expected to sign both Acts soon.
Paperwork Burden Reduction Act
This Act 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.
Currently, employers and health insurers 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) for 2024 by March 3, 2025.
The IRS allows for 1095-B tax forms, which are sent by certain health insurers and employers, to be made available to individuals only upon request. The Act provides statutory authority for this flexibility and extends this flexibility to 1095-C tax forms, which are sent by certain large employers. Such requests must be fulfilled by January 31 or 30 days after the date of the request, whichever is later. Employers and health insurers must give individuals timely notice of this option, in accordance with any requirements set by the IRS.
Effective Date: The amendments made by this section shall apply to statements with respect to returns for calendar years after 2023.
For a copy of the text of the Paperwork Burden Reduction Act, please click on the link below:
https://legiscan.com/US/text/HB3797/id/2830035
Employer Reporting Improvement Act.
This Act modifies provisions under the Patient Protection and Affordable Care Act that require employers and health insurers to prepare tax forms showing proof of minimum essential coverage (1095-B and 1095-C tax forms).
Currently, employers and health insurers that provide minimum essential coverage must report this information for each covered individual to the Internal Revenue Service (IRS), including the covered individual’s Tax Identification Number (TIN). Employers and providers must also send a copy of this information to the covered individual (through 1095-B and 1095-C tax forms) for 2024 by March 3, 2024.
The IRS allows for an individual’s date of birth to be substituted for the individual’s TIN if the TIN is not available. The IRS also allows employers and health Insurers to offer 1095-B and 1095-C tax forms to individuals electronically. The bill provides statutory authority for these flexibilities.
Additionally, under current law, large employers (generally those with 50 or more full-time employees) are subject to an assessment by the IRS if they do not offer affordable minimum essential coverage. The Act requires the IRS to give large employers at least 90 days to respond after sending its first letter about a proposed assessment (Currently, the IRS generally gives 30 days to respond.) It also establishes a six-year statute of limitations for collecting assessments.
Effective date: The amendments made by this section shall apply to statements the due date for which is after December 31, 2024.
For a copy of the text of the Employer Reporting Improvement Act, please click on the link below:
https://www.congress.gov/bill/118th-congress/house-bill/3801/text/ih
