On December 23, 2024, President Biden signed the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act into law, both of which include components that seek to ease certain Affordable Care Act (ACA) reporting requirements for employers.

The Paperwork Burden Reduction Act

The Paperwork Burden Reduction Act amends the ACA to provide that employers are no longer required by default to deliver Forms 1095-C/1095-B to recipients if a series of criteria are satisfied. Instead, employers will be in compliance with the ACA’s furnishing requirement as long as they:

1. Provide “clear, conspicuous, and accessible notice” per forthcoming instructions from the Internal Revenue Service (IRS) that recipients may request a copy of their Form 1095; and
2. Upon receipt of request for a Form 1095, provide the statement to the recipient by the latter of January 31 of the year following the calendar year for which the return was generated (e.g., January 31, 2025 for 2024 Forms 1095-C) or 30 days after the request is received.

Though this relief technically applies for the 2024 Forms 1095 that must be furnished to recipients by March 3, 2025, the IRS has yet to release guidance for the contents and timing of the required notice with respect to Forms 1095-C. Guidance has been issued relative to Form 1095-B distribution under prior rules, but it is unclear whether applicable large employers (ALEs) can rely on that guidance relative to avoiding distribution of Forms 1095-C.

Under the alternative notice rules for Form 1095-B distribution, a provider must post a clear and conspicuous notice on its website that: (1) includes a statement on its main page reading “Tax Information” which links to a secondary page that states in capital letters “IMPORTANT HEALTH COVERAGE TAX DOCUMENTS, (2) explains how responsible individuals can request a copy of the appropriate ACA forms, and (3) includes the provider’s email address, mailing address, and telephone number. Presumably, comparable rules will be issued for Forms 1095-C, but they have not been released as of the date of this publication.

Notably, this law does not have any impact on the requirement that all ALEs and those non-ALEs with self-insured or level-funded health plans file their 2024 Forms 1094 and 1095 with the IRS by March 31, 2025, nor does it affect any state-level ACA form furnishing requirements. As a reminder, MZQ furnishes Forms 1095 to recipients at no additional cost to our ACA reporting clients.

The Employer Reporting Improvement Act

We have highlighted select sections of this act below. The revisions apply to the 2024 ACA filings due in 2025, as well as to those due in subsequent years. However, it is likely that these updates will have little noticeable impact on employers, as they lean more towards codifying existing practices than creating drastic change.

• SSN Reporting Flexibility: Employers with self-insured or level-funded health plans must include subscriber, dependent, and spousal enrollment information on Part III of the Form 1095-C or Part IV of the Form 1095-B, as applicable. The Employer Reporting Improvement Act codifies relief for affected employers, permitting them to substitute a covered individual’s date of birth on these parts of the forms when the individual’s SSN is unavailable without requiring the employer to pursue additional verification steps for the missing SSN.
• Electronic Furnishing Consent: Employers are and have been permitted to electronically deliver Forms 1095 to recipients if the recipients provide consent to receive the forms electronically. This act now specifies that if an individual consents to receive their Form 1095 electronically, employers can consider that consent to be in effect indefinitely unless the individual revokes their consent in writing. We have found that few employers choose to deliver their Forms 1095 electronically, as it can be difficult to secure electronic consent from all recipients. It is also worth noting that employers may no longer need this distribution option once guidance regarding the alternative furnishing standard is issued under the Paperwork Burden Reduction Act, thereby largely eliminating the need to deliver Forms 1095.

As always, our team will continue to monitor ACA developments and provide updates as they become available.