ACA Reporting Simplified

ACA Reporting Simplified

On December 23, 2024, President Biden signed both the Employer Reporting Improvement Act and the Paperwork Reduction Act into law. These laws make changes to the requirements of distributing Forms 1095-B and 1095-C aimed at easing the reporting burden. Further the new laws are intended to streamline the enforcement process. Key changes include:

Forms 1095-B and 1095-C: Employers, plan sponsors and insurers of insured or self-funded health plans no longer need to provide form 1095-B or 1095-C as applicable, to employees and covered individuals. To take advantage of this relief, a notice must be provided to participants about the right to request a form 1095. Currently there is no model notice form, however, a simple statement advising individuals about the right to request a form and an explanation of the process to make the request should be sufficient. Posting the notice in an accessible place on the employer or plan’s website will likely satisfy this requirement assuming existing rules are followed. We will need to wait for guidance to know for sure. Importantly, individuals have the right to request a form, which must be provided by the later of January 31st of the year following the coverage year or 30 days after the request date. Importantly, the filings, including the required form 1095, must continue to be submitted to the IRS. It should also be noted that some states may continue to require delivery of applicable forms to individuals, see our Year-End HRB here for more information.

Flexibility for Tax Identification Numbers (TIN): This law codifies the existing practice allowing the use of an individual’s full name and date of birth in place of the TIN if the TIN is not available. This relief is specific to the minimum essential coverage reporting applicable to employees and dependents and does not apply to employer shared responsibility reporting.

Electronic Distribution of Requested Form: This law also codifies existing rules relating to electronic distribution. If an individual has consented to receive the form electronically (and has not withdrawn that consent), the 1095 can be provided electronically. Guidance on this provision is pending, a good-faith effort, such as including a consent option on the request form, should be sufficient.

Extension of Response Time to Penalty Letters: Plan sponsors now have 90 days, instead of 30, to respond to a proposed penalty assessment letter from the IRS.

Statute of Limitations on Penalty Assessments: A six-year statute of limitations is established for collecting penalties from employers, starting from the later of the due date for the 1095 Forms or the actual filing date, whichever is later. This should come as welcome relief. Prior to enactment of this law there was no statute of limitations.

The Paperwork Reduction Act is effective for all calendar years after 2023. The Employer Reporting Improvement Act is effective for returns due after December 31, 2024. As noted above the 1095-B or 1095-C must still be prepared and submitted to the IRS with Form 1094. Except for the changes outlined in these two new laws, all other reporting requirements of the ACA remain unchanged. Though the streamlining of the 1095 delivery to individuals will come as welcome relief for many plans it might be too late to change the process for this reporting cycle.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.


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ACA Reporting Simplifiedhttps://www.cbiz.com/Portals/0/Images/AdobeStock_752727922-1.jpeg?ver=rfDDv8n-C77q6bd4PCdd9A%3d%3dhttps://www.cbiz.com/Portals/0/Images/AdobeStock_752727922.jpeg?ver=Uhkat0Jebu9O7Z8FDiFvrw%3d%3dOn December 23, 2024, President Biden signed both the Employer Reporting Improvement Act and the Paperwork Reduction Act into law.2025-01-09T18:00:00-05:00On December 23, 2024, President Biden signed both the Employer Reporting Improvement Act and the Paperwork Reduction Act into law.Regulatory, Compliance, & LegislativeEmployee Benefits ComplianceNo