In late December 2024, two new laws were signed by President Biden which reduced the reporting burden under the Affordable Care Act (ACA) for employers and group health plans titled the Paperwork Burden Reduction Act (PBRA) and the Employer Reporting Improvement Act (ERIA).
Under the ACA, applicable large employers (ALEs), which are those with 50 or more full-time employees, and self-insured group health plans must provide the IRS and covered individuals with information regarding whether the health coverage they provide is considered minimum essential coverage. Employers and plan sponsors filing Forms 1095 under the ACA must submit the required information to the IRS on or before March 31; & provide covered individuals with Form 1095 by March 2 (or the next business day).
PBRA
Under the PBRA, applicable large employers and self-insured plans are no
longer required to send Form 1095 to covered individuals unless requested. If the covered individual requests the form, applicable large employer or self-insured plans must provide that form by the later of January 31 or 30 days after the date of the request. To take advantage of this new provision, applicable large employers and self-insured plans must provide a notice informing employees and covered individuals that they may request a copy of the 1095 form. Previous guidance from the IRS allowed plans to avoid automatically sending the 1095 form if they posted notice of its availability on the plan website. The PBRA extends this treatment to employers and appears to permit the notice to be provided in another format.
For current clients of Tronconi Segarra & Associates, whose 1095 forms are prepared by our ACA team, we will maintain the process of mailing the 1095 forms to recipients for the 2025 filing season.
ERIA
The Employer Reporting Improvement Act permits greater flexibility to plans and employers and codified the following existing IRS guidance:
Tax Identification Number (TIN) Flexibility: An individual’s date of birth may be substituted for the individual’s TIN, if the TIN is not available. This often occurs with dependent members.
Electronic Forms: Form 1095 may be sent to a covered individual electronically if the individual previously consented to it.
Extended Time to Respond to Penalty Notification: ALEs now have 90 days (previously 30 days unless an extension was granted) to respond to the first letter from the IRS notifying them of the proposed employer shared responsibility penalty.
Statute of Limitation of Penalty Assessment: Establishes a six-year statute of limitations for imposing a penalty on ALEs for failure to offer affordable coverage. This provision applies prospectively to returns that are due after December 31, 2024.
If you have any questions regarding the reporting required under the Affordable Care Act, please contact Lisa Mrkall from our ACA Team at 716 633-1373 or LMrkall@tsacpa.com.
