Changes to the reporting requirements (1094 /1095 series) imposed by the Affordable Care Act (ACA) were signed into law late last year. The Employer Reporting Improvement Act and the Paperwork Burden Reduction Act at face value provide some administrative relief to employers required to provide the annual information returns to the IRS and employees. 
Form distribution
In the first quarter of each year, affected employers and health insurance providers have been required to submit coverage and enrollment information to the IRS and benefit-eligible employees using Forms 1094 /1095. Starting in 2025, employee forms are no longer required to be distributed, unless requested. Forms must now be provided within 30 days after a request. Employers and health insurance providers must give individuals timely notice of this option, in accordance with any requirements set by the IRS. Forms are still required to be provided to the IRS. From a practical standpoint, some employers may find it easier to continue issuing forms to employees, rather than respond to individual requests throughout the year.
Data substitution
Completed forms include employee and enrollee names, addresses and tax identification numbers (TINs). An individual’s date of birth could only be substituted if repeated efforts to identify the TIN were not successful. The new law provides statutory authority for the substitution of an individual’s full name and date of birth for the individual’s TIN on 1095-B and 1095-C tax forms and the electronic transmission of these forms when prior affirmative consent is provided by the individual.
Response time to IRS inquiry
The new law allows 90 days rather than 30 to respond to IRS information requests related to 1095-C forms submitted by larger employers, (generally those with 50 or more full-time employees). The additional time reduces the likelihood of a delinquent response and possible penalties.
Penalty assessment period
There will now be a six-year period (from the later of the applicable filing date or due date of Forms 1094/1095) for the IRS to assess Employer Shared Responsibility Penalties. Employers with 50 or more full-time employees can be assessed penalties for not offering minimum essential coverage that complies with ACA affordability and minimum value requirements. This extension provides clarity for plan sponsors, capping potential assessments and allowing sponsors to better manage their compliance risks.
For more information, contact your Bukaty benefits consultant at 913.345.0440.
