Two bills were signed into law on December 23, 2024, that reduced the reporting burdens for employers under the Affordable Care Act (ACA). Together, the Paperwork Burden Reduction Act (PBRA) and the Employer Reporting Improvement Act (ERIA) simplify ACA compliance for employers.
Under PBRA, employers are no longer required to automatically send Forms 1095-B or 1095-C (“Forms”) to employees. Instead, employers must provide an easily accessible notice that clearly informs employees of their right to request these Forms. If a Form is requested, the employer must provide it by January 31 or within 30 days of the request, whichever is later. This change is effective beginning with the 2024 calendar year. PBRA further provides that the Internal Revenue Service (IRS) may issue future guidance detailing the time and manner of this notice.
ERIA provides several helpful measures that ease ACA compliance burdens for employers. Specifically, ERIA:
- codifies current IRS guidance that permits employers to use an employee's date of birth instead of their Tax Identification Number (TIN) on ACA-related returns when the employee’s TIN is not available;
- codifies rules that permit electronic delivery of the Forms to individuals who consent to electronic delivery;
- extends the time employers have to respond to potential ACA penalties (as of January 1, 2025, employers have 90 days (instead of 30 days) to respond to IRS Letter 226-J); and
- provides a six-year statute of limitations for ACA penalty assessments, beginning with returns due after December 31, 2024 (the six-year limitation period begins on the later of the due date for the specific Form filing or the actual filing date).
As a reminder, employers must still file Forms 1094-C and 1095-C with the IRS by the usual deadlines.
Recommended Actions for Employers
If action is taken quickly, employers can implement the new process regarding the distribution of the Forms for Forms that would otherwise be due to employees by March 3, 2025, for the 2024 year. In addition, employers will want to keep watch for future guidance that details the nature of the notice required as an alternative to the full distribution of the Forms.
If you have any questions about these new ACA compliance guidelines and/or would like Calfee to review your group health plan and/or other welfare plan documents with respect to compliance, design or administration, please contact any member of our Employee Benefits and Executive Compensation practice group.
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