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. These laws only impact federal ACA reporting. State reporting remains unchanged. For information on state filing requirements visit our piece on Complying With Various State Individual Health Care Mandates.

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.

IRS Notice 2025-15 states that employers may satisfy the notice requirements of 1095-B by following the same steps as required for Form 1095-C. The notice must be posted by the original furnishing deadline (March 3 for 2025). It must also be posted in a location on the employer’s website that is reasonably accessible to full-time employees and remain accessible through October 15 of the year following the calendar year of the applicable reporting year. The notice must include an email address where requests can be sent, a physical mailing address where requests can be sent, and a phone number employees can use to ask the employer questions about the notice.

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.

If your organization has accidentally made an ACA reporting error, you can reference our Guide to Correcting ACA Reporting Mistakes in order to get back in compliance.