Legislative provisions have been made to the federal Affordable Care Act (ACA) employer reporting requirements effective with the 2024 reporting that is due in 2025. These changes aim to eliminate some of the headaches employers feel when reporting under Sections 6055 and 6056. The US Senate proposed two new acts: the Employer Reporting Improvement Act (ERIA) and the Paperwork Burden Reduction Act, which President Biden subsequently approved on December 23, 2024.  

If you are an applicable large employer (ALE), you will have 50 or more full-time equivalents (FTE) in the prior year filing the “C” forms 1094 and 1095. If you are a small employer with less than 50 employees offering a self-funded or level-funded group health plan, you will file the “B” forms 1094 and 1095 (most likely handled by the carrier). 

Let’s review the approved ACA employer reporting requirement changes: 

  • Say goodbye to distributing forms 1095-B and 1095-C unless requested: The forms should still be available for distribution by January 31, 2025. Upon request, these forms may be distributed electronically if the employee consents, or paper if otherwise requested. If the employee requests a copy of the form the employer must do so within 30 days of the employee request or by January 31 of the year following the applicable calendar year, whichever is later. In order to implement this change, the employer must provide a “clear, conspicuous, and accessible notice” to employees by January 31, 2025. The notice can be posted for employees on the employer’s website or portal per IRS electronic delivery guidelines.  An email address, mailing address, and telephone number should be included in the notice. A model notice is currently unavailable; no guidance regarding the notice requirements has been provided. You can refer to the 2024 IRS instructions: Form Instructions (page 5 “Alternative manner of furnishing statements”) for the “B” form. The document allows you to see the current provisions for the “B” form that can be referenced for the “C” forms. Previously, you were required to print the “C” forms for distribution.  
  • Say goodbye to SSN or TIN verification: If this information is missing from your employees’ spouses or dependents you may now submit it with their name and date of birth in lieu of their SSN. Previously, you had to make three attempts to gather this information unless you could prove reasonable cause. 
  •  Say goodbye to the quick turnaround for penalty letters: There will now be 90 days to respond to a 226J IRS penalty letter. Previously, there was a 30-day window from the date of the letter not the date of receipt. There will no longer be a need to file for an extension.  
  • Say goodbye to the open-ended penalty statute: There will now be a six-year maximum period for the IRS to collect a payment for a penalty. This change is effective for forms due after December 31, 2024. Previously, there was no statute of limitation for forms 1095-B and 1095-C. It is very important to maintain your records for at least six years.  

All other processes remain unchanged. As a reminder, the 1094-B/C and 1095-B/C forms if filed by paper should be submitted to the IRS by February 28, 2025, and if filed electronically by March 31, 2025. 

As an employer, your next steps should be as follows: 

  • Create a notice for employees 
  • Decide how you will distribute the notice
  • Be sure to establish a consistent and compliant delivery process
  • If a vendor handles the 1095-C distribution, be sure they are compliant, and review all contracts for the necessary updates

These federal changes may not apply to the 2024 reporting for state-level reporting in CA, MA, NJ, RI, and DC. If these mandates apply, please check your state-specific requirements to remain compliant.