Congress Passes Two Laws Intended to Ease Employer ACA Reporting

Congress passed the Paperwork Reduction Act and the Employer Reporting Improvement Act, each of which modify the ACA’s provisions on 1094 and 1095 tax form reporting.

President Biden signed both acts into law on December 24, 2024, meaning that changes to ACA reporting requirements in each piece of legislation will have immediate effect.

Paperwork Reduction Act

The Paperwork Reduction Act amends the ACA by no longer requiring employers and health insurance providers to send tax forms to the covered individuals under their health plan. Previously employers and/or insurance providers had to send 1095-B/1095-C tax form to each covered individual showing proof of minimum essential coverage. Now, those forms must only be sent when requested by the covered individual. If a covered individual requests a form, the form must be provided by January 31 or 30 days after the date of the request, whichever is later. Employers and insurance providers must inform covered individuals of their right to request a form.

Now, 1095-B/1095C forms must only be sent when specifically requested by covered individuals.

Employer Reporting Improvement Act

The Employer Reporting Improvement Act codifies IRS regulations that allow for an individual’s date of birth to be substituted if the individual’s Tax Identification Number is not available. The Act also amends the ACA to incorporate IRS regulations allowing employers and insurance providers to offer 1095-B and 1095-C tax forms to individuals electronically.
Additionally, and more importantly to employers, the Act requires the IRS to give large employers at least 90 days to respond to 226-J letters that issue a proposed employer shared responsibility payment. Previously, employers had only 30 days to respond. Finally, the Act establishes a six-year statue of limitations for collecting these payments.

Aside from the changes specified in these bills, all other ACA reporting requirements will remain the same.

Has your organization accidentally made an ACA reporting error? Our Guide to Correcting ACA Reporting Mistakes is here to help.