In a significant move to streamline Affordable Care Act reporting, former President Joe Biden signed two crucial pieces of legislation on Dec. 23, 2024: the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act. These laws introduce welcome changes that will ease the administrative load on employers starting with the 2024 reporting year.
Summary of key changes:
- Forms 1095-B and 1095-C are now available by request
- Employers are no longer required to automatically distribute these forms to all employees.
- Employers must provide a clear, conspicuous and accessible notice to inform employees of their right to request the forms.
- When requested, employers must furnish the forms by Jan. 31 of the following year or within 30 days of the request, whichever is later.
- Enhanced electronic delivery options
- Employers can now more broadly distribute Forms 1095-B and 1095-C electronically.
- Employees who have previously consented to electronic delivery are considered to have ongoing consent unless they explicitly revoke it.
- Extended response time for IRS penalty assessments
- The deadline for employers to respond to proposed ACA penalty assessments (Letter 226-J) has been extended from 30 to 90 days.
- New statute of limitations
- A six-year statute of limitations has been established for collecting ACA-related assessments.
- Flexibility in reporting
- Employers can now substitute an employee’s date of birth for their tax identification number when the TIN is unavailable.
What this means for employers:
These changes significantly reduce the paperwork burden and offer more flexibility in ACA reporting. However, it’s crucial to note that employers must still prepare and file Forms 1095-C and 1095-B with the IRS by the usual deadlines.
Next steps:
- Update your ACA reporting processes to align with these new requirements.
- Prepare to provide clear notices to employees about form availability.
- Review and update electronic delivery consent procedures.
Remember: State-specific reporting requirements may still apply. Employers should consult with their legal and tax advisors to ensure full compliance with both federal and state regulations.
Stay tuned for further guidance from the IRS on implementing these new provisions. As we navigate these changes together, the simplification of ACA reporting promises to bring welcome relief.
This information is provided solely for informational purposes and does not constitute legal advice or create an attorney-client relationship. Its content is general in nature and may not address individual circumstances or specific legal issues. Insperity does not interpret clients’ retirement plan documents and does not administer, have discretionary or act as a fiduciary of any client-sponsored retirement plans. For legal advice tailored to your situation, please consult with your legal counsel.