On December 24, 2024, President Biden signed HR 3797, the Paperwork Reduction Act, which deals with an alternative manner of furnishing health insurance coverage statements to employees—specifically the 1095-C. (The 1095-C provides coverage information to employees regarding health insurance options offered by Applicable Large Employers).
Key Changes of the Paperwork Reduction Act related to Affordable Care Act (ACA) reporting:
- Allows employers the option to use covered individuals’ full name and date of birth if unable to collect TINs (for statements due in 2025)
- Increase from 60 to 90 days to respond to IRS Notices related to proposed assessments (beginning in 2025)
- This is a Federal change, so any states with paper furnishment requirements may still be in play
Prior to this amendment, the 1095-C had to be furnished to each employee in hard copy format, with a due date that was permanently extended to an automatic 30-days beyond the January 31 due date, which for calendar year 2024 would be March 3, 2024. The new requirement states that an ALE normally required to furnish such statements would be allowed to furnish them in an alternate manner if they provide “clear, conspicuous and accessible notice” regarding how to request a copy and that notice must be provided “not later than the later of…” January 31 of the calendar year for which the return was required, or within 30 days of receiving the employee request.
The newly signed measure retains the original effective date that shall “apply to statements for calendar years after 2023.” Employers awaiting IRS guidance may look to the process established for the 1095-B to guide their transition. We will continue to monitor for new legislation or publications in the event any dates related to this Paperwork Reduction Act are altered. It will be important to watch states react to the federal law, as several states have their own reporting requirements. Stay tuned to this space for updates on both federal and state ACA reporting requirements.
The full language of the bill can be found here.