The Paperwork Burden Reduction Act and the Employer Reporting Improvement Act were enacted in December 2024. Both laws ease the burden of reporting under the Affordable Care Act (ACA) mandate requiring applicable large employers (ALEs) to offer health insurance to full-time employees and their dependents and provide an annual statement on the available coverage. The Employer Reporting Improvement Act also gives employers more time to respond to an initial notice of an employer mandate penalty from the IRS and establishes a statute of limitations for employer mandate penalties. The provisions, noted below, took effect at the beginning of 2025.
The Paperwork Burden Reduction Act allows ALEs to furnish the required statement — IRS Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) — to individuals only upon request rather than annually. Employers must give “clear, conspicuous, and accessible notice” that employees may request the statement. Once a request is received, employers have until January 31 of the year after the calendar year to which the statement relates or 30 days after the request, whichever is later, to provide Form 1095-C.
The provision is effective for returns for calendar years after 2023, though ALEs do not yet have guidance on the notice requirement or other provisions of the law.
The act also codifies existing guidance allowing the IRS Form 1095-B (Health Coverage) to be provided only upon request. Under that guidance, the reporting entity must provide a clear and conspicuous notice, in a location on its website that is reasonably accessible to all responsible individuals, stating that responsible individuals may receive a copy of the form upon request. The notice must:
Statements furnished under these rules may be provided electronically if the individual has consented to electronic delivery.
The act does not change the rules that govern ALE reporting to the IRS, and it does not affect reporting requirements in states that require reporting on the Form 1095-C to enforce their own minimum essential coverage mandates.
The Employer Reporting Improvement Act addresses reporting and penalties under the ACA employer mandate.
ALEs failing to provide health insurance coverage as required under the ACA may receive an initial letter from the IRS (Letter 226-J) that starts the enforcement and penalty assessment process. The Employer Reporting Improvement Act:
The act also codifies reporting relief that was issued through IRS guidance. It: