During his final 30 days in office, President Biden signed two bills into law intended to make ACA reporting easier for employers and health insurance providers.
As the name suggests, the Paperwork Burden Reduction Act (PBRA) is a new measure aimed at reducing unnecessary and wasteful paperwork. Under the PBRA, employers are no longer required to automatically send forms 1095-B or 1095-C to their employees. Now, they are only required to provide “clear, conspicuous, and accessible notice” informing employees of their right to request these forms. Upon request, employers must provide the forms by January 31 or within 30 days of the request, whichever is later.
This change applies to forms for the 2024 calendar year and beyond, offering immediate relief for employers in the upcoming reporting cycle.
The Employer Reporting Improvement Act (ERIA) complements the PBRA by codifying existing IRS guidance and introducing additional flexibilities. It allows employers to use an employee's date of birth instead of their Tax Identification Number (TIN) on ACA-related returns when the TIN is unavailable. It also formalizes rules permitting electronic delivery of Forms 1095-B and 1095-C to consenting participants.
The ERIA also provides employers with more time to respond to potential ACA penalties. Starting January 1, 2025, employers have 90 days (up from 30 days) to respond to IRS Letter 226-J, which proposes penalty assessments for ACA coverage failures. Additionally, the ERIA introduces a six-year statute of limitations for these penalty assessments, providing employers with more certainty in their long-term compliance efforts.
This new rule only applies to returns due after December 31, 2024.
It is important to remember that even though these new laws make reporting easier for employers, forms 1095-B & 1095-C must still be submitted to the IRS by the existing deadlines.