No More 1095-B/C Required Mailing!
2025 Changes To ACA Employer Information Reporting Obligations
In December 2024, Congress and President Biden passed two laws—the Paperwork Burden Reduction Act (PBRA) and the Employer Reporting Improvement Act (ERIA)—that made important changes to employers' responsibilities regarding furnishing information to employees under the Affordable Care Act (ACA) information reporting provisions as well as the response deadlines and the statute of limitations for the employer shared responsibility penalty assessments.
Employer Information Reporting Provisions
Under the PBRA, the requirement to furnish Forms 1095 has been relaxed. Effective for the 2024 reporting year, if an employer provides "clear, conspicuous, and accessible" notice that individuals may request their Form 1095-B or 1095-C, then the employer is no longer required to distribute a Form 1095 to each covered individual. Instead, after complying with the notice requirements, an employer only needs to furnish a Form 1095 to an individual upon request.
After an individual's request is received, the employer must furnish the Form 1095 to the individual no later than the later of either of the following:
- 30 days after the date of the request.
- The January 31 following the coverage year for which the Form 1095 is requested.
When furnishing Forms 1095 to all covered individuals or to an individual upon a request, employers are still permitted provide Forms 1095 by first-class mail or in-person delivery. In addition, the ERIA codified electronic delivery of Forms 1095, providing that employers may provide Forms 1095 through electronic delivery, if the individual has consented to electronic delivery of such forms and not withdrawn such consent.
Employer Shared Responsibility Provisions
The ERIA also establishes a six-year statute of limitations for assessing employer shared responsibility penalties under Section 4980H of the Internal Revenue Code. This will first apply for Forms 1094 and 1095 due after December 31, 2024. Previously, the Internal Revenue Service (IRS) Office of Chief Council stated that there was no statute of limitations on assessing penalties under Section 4980H. All returns filed prior to December 31, 2024, will continue to have no statute of limitations applied to them.
Further, the ERIA extends the time for responding to the initial letter from the IRS regarding a proposed assessment of an employer shared responsibility penalty (IRS Letter 226-J). Now employers will have at least 90 days from the date of the initial letter to respond to the proposed assessment, an increase from the original 30-day response period.
Commentary by: Raylea Stelmach
Edited by:
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