ACA Employer Mandate Filing Relief…Finally!

After ten long years of the Affordable Care Act’s (ACA) so called employer shared responsibility (aka employer mandate) reporting requirements, we finally have some relief!  The former President signed two bills on December 23, 2024, that significantly ease the burden associated with this particular aspect of ACA compliance – the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act.  Here’s what the ACA’s ALE’s (Applicable Large Employer) need to know and do, to benefit from the relief provided by these two bills…

For those interested in the history of the ACA’s employer mandate, I have previously blogged about it as it gradually rolled out in 2014 –

https://smstevensandassociates.com/understanding-employer-shared-responsibility-per-the-aca-2/

https://smstevensandassociates.com/redefinition-of-small-group/

https://smstevensandassociates.com/aca-employer-reporting-requirements-2/

https://smstevensandassociates.com/aca-employer-reporting-continued-2/

H.R. 3797 – Paperwork Burden Reduction Act

This bill modifies provisions of the ACA and relieves ALE’s/employers and insurers from having to SEND tax forms (1095-B or 1095-C) to all employees covered by health insurance. Starting in early 2025, for 2024 plan years, ALE’s and insurers will merely be required to make these forms available upon request by covered employees.  In addition, the bill allows the forms to be provided electronically rather than via 1st class mail.  Importantly, this bill does NOT change ALE’s and insurers requirement to file forms 1094-B and 1094-C to the IRS.

H.R. 3801 – Employer Reporting Improvement Act 

This bill addresses 4 key aspects of reporting –

1. Provides guidance on providing forms 1095-B and 1095-C electronically.
2. Allows reporting entities to use the full legal name and date of birth instead of tax identification numbers (TIN), if unavailable.
3. Employers will now have 90 days to respond to IRS notices such as Letter 226J or Letter 5699.
4. Heretofore the IRS has been allowed to send notices, such as the above referenced letters, dating back to 2016. This bill clarifies that a 6-year statute of limitations now applies to the failure to offer minimum essential coverage (MEC) and being assessed penalties associated with employees purchasing subsidized coverage on the ACA marketplace.  (Note: we refer to these as the Sledgehammer and Tack Hammer penalties, see – https://smstevensandassociates.com/understanding-employer-shared-responsibility-per-the-aca-2/

What ALE’s (generally organizations with 50 or more full-time and full-time equivalent employees) need to consider in light of these bills –

• – Contact vendors providing ACA reporting services and request revised employee notices addressing the availability (versus automatic receipt) of form 1095-C.  Also ask vendors to amend contracts, if necessary, and review any relevant procedural changes associated with the relief.
• – Address how best to post and distribute notices.

– Put procedures in place allowing for the provision of form 1095-C upon request.

We’ll continue to monitor changes affecting ACA reporting such as these, and others that may follow!

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