New Reporting Laws: Understanding H.R. 3801 and H.R. 3797 for Employer Mandate Compliance
On December 23, 2024, the President signed two laws relating to the Employer Mandate reporting and to the reporting required of Providers of Minimum Essential Coverage. Neither of these laws negate the requirements to electronically file the 1094-C and 1095-C forms or the 1094-B and 1095-B forms. However, these laws do, in effect, serve to provide relief for employers’ 1095-C and 1095-B form furnishing requirements, among other relief mechanisms. Currently, United ACA Solutions, LLC is not aware of any modifications made to State laws mandating the furnishing of these forms to individuals who enroll in Minimum Essential Coverage provided by the employer.
Summary of the Laws:
H.R. 3801 'Employer Reporting Improvement Act'
This bill modifies provisions under the Patient Protection and Affordable Care Act which require employers and health insurance providers to prepare tax forms showing proof of minimum essential coverage (1095-B and 1095-C tax forms).
Currently, employers and health insurance providers that provide minimum essential coverage must report this information for each covered individual to the Internal Revenue Service (IRS), including the covered individual's Tax Identification Number (TIN). Employers and providers must also send a copy of this information to the covered individual (through 1095-B and 1095-C tax forms) by January 31 of each year.
The IRS has allowed for an individual's date of birth to be substituted for the individual's TIN if the TIN is not available. The IRS has also allowed employers and providers to offer 1095-B and 1095-C tax forms to individuals electronically. This bill provides statutory authority for these flexibilities.
Additionally, large employers (generally those with 50 or more full-time employees) are subject to an assessment by the IRS if they do not offer affordable minimum essential coverage. This bill requires the IRS to give large employers at least 90 days, as opposed to the 30 days previously given, to respond after sending its first letter about a proposed assessment.
Finally, this bill establishes a six-year statute of limitations for collecting assessments.
H.R. 3797 'Paperwork Burden Reduction Act'
This bill modifies provisions under the Patient Protection and Affordable Care Act so that employers and health insurance providers are no longer required to send tax forms to covered individuals showing proof of minimum essential coverage (1095-B and 1095-C tax forms) unless a form is requested.
Prior to this bill, employers and health insurance providers that provide minimum essential coverage had to report this information for each covered individual to the Internal Revenue Service (IRS) and provide this information to the covered individual (through 1095-B and 1095-C tax forms) by January 31 of each year. The IRS allowed for 1095-B tax forms, which are sent by certain health insurance providers and employers, to be made available to individuals only upon request, but made no such allowance for 1095-C tax forms.
This bill provides statutory authority for this flexibility to the 1095-B tax forms and extends the same flexibility to 1095-C tax forms, which are sent by certain large employers. Under this bill, individual requests for either tax form must be fulfilled by January 31 or 30 days after the date of the request, whichever is later. Employers and health insurance providers must give individuals timely notice of this option, in accordance with any requirements set by the IRS.
What this means for you:
You, as the employer, now have options regarding the furnishing of 1095-B forms to individuals:
You may continue to furnish the 1095-C and 1095-B forms by hand or by mail in accordance with the preexisting furnishing deadline of January 31st plus the automatic extension of 30 days (IRS Notice 2018-94). For the 2024 tax year, the furnishing deadline will be March 3rd, 2025.
Alternatively, you may post a clear, conspicuous, and accessible notice that the 1095-C and 1095-B forms will be made available upon request. If an individual requests for their form, it must be provided to them by January 31st or within 30 days from the date of such request, whichever is later (see attached notice template).
The process of electronically furnishing the forms has also been streamlined. By collecting affirmative consent to receive electronic copies of the 1095-C and 1095-B forms, you can further reduce the burden and expense associated with printing and mailing paper forms (see attached electronic furnishing consent template).
If you have any questions or if you are considering the alternative furnishing option, please contact us so that we can discuss the details. Also, if you would like to learn about how these new laws effect your organization specifically, please don’t hesitate to reach out.