Great news for employers! Two new laws signed on December 23, 2024, the Paperwork Burden Reduction Act (PBRA) and the Employer Reporting Improvement Act (ERIA), which bring significant changes to Affordable Care Act (ACA) reporting requirements.

These updates are designed to simplify processes for Applicable Large Employers (ALEs).

Simplified Reporting for Forms 1095-C and 1095-B

Under the PBRA, ALEs no longer need to automatically send Forms 1095-C or 1095-B to all full-time employees and covered individuals. However, employees must be notified of their right to request these forms through a clear and accessible notice.

  • These Forms may only be sent upon request by an employee or covered individual.
  • If requested, employers must provide the forms by the later of January 31 or 30 days after they were requested.
  • Forms can also be delivered electronically, provided employees give their consent.

This reduces unnecessary paperwork while ensuring employees can access their information when needed. However, employers should check state laws since some states still require automatic reporting, even when not requested by employees.

More Flexibility with Data and Deadlines

The ERIA provides additional flexibilities:

  1. Employers can now use an employee’s full name and birthdate if their social security number isn’t available.
  2. Employers now have 90 days, compared to the previous 30 days, to respond to IRS Letter 226J, which informs ALEs of potential ACA penalties.
  3. There is now a six-year limit for the IRS to assess ACA penalties protecting employers from indefinite liability. Previously, there was no statute of limitations.

 

Next Steps for Employers

  • ALEs are still required to file Forms 1094-C and 1095-C with the IRS by March 31, 2025 (electronic) or February 28, 2025 (paper).
  • Create and distribute to your employees a clear notice about their right to request Forms 1095-C or 1095-B.
  • Stay updated on individual state reporting laws.

These changes make ACA compliance more manageable. Please reach out to your benefits broker for further assistance. If you’d like assistance with HR tasks and compliance matters, please reach out to us for a free consultation. UniqueHR helps our clients navigate these updates, minimize risks, and streamline HR operations.