This article is of interest to Applicable Large Employers (ALEs) – generally those with 50 or more full-time employees (including full-time equivalent employees).
Under the ACA’s employer shared responsibility (“Pay or Play”) provisions, large employers may be subject to a penalty if they do not offer affordable coverage that provides minimum value to their full-time employees and their dependent child(ren).
Two new recently passed laws, the Employer Reporting Improvement Act and the Paperwork Burden Reduction Act, introduce several significant changes to the reporting and enforcement rules of the Affordable Care Act (ACA).
Alternative Method for Furnishing Form 1095-C to Full-Time Employees and Covered Individuals
Under the “Paperwork Burden Reduction Act,” ALEs are no longer required to send Form 1095-C copies to full-time employees and covered individuals (if self-insured) unless such individual requests the form. To use this alternative method, the ALE must (1) provide clear, conspicuous, and accessible notice (at such time and in such manner as the IRS may provide) that the individuals may request a copy of such form; and (2) furnish the form upon request by the later of (a) January 31 of the year following the calendar year in which such coverage was provided or (b) 30 days after the date of the request.
Note! The new legislation does not make any changes to the IRS filing requirement and 1095-Cs must be generated and sent to the IRS regardless of use of the alternative method of individual furnishing. In addition, many states have their own individual mandate and may impose reporting obligations on coverage providers and sponsors comparable to those under the ACA.
Electronic Consent for Individual Statements and Flexibility for TIN Reporting
The Employer Reporting Improvement Act codifies the ability of reporting entities to send 1095-B and 1095-C statements electronically to individuals if they have affirmatively consented “at any prior time” (unless they have revoked such consent in writing).
The new legislation also codifies the ability under Section 6055 to substitute a covered individual’s birth date in lieu of their taxpayer identification number (TIN), without the requirement to first make reasonable efforts to obtain the TIN.
Other ACA Employer Shared Responsibility Provisions
The new legislation increases the time ALEs have to respond to IRS penalty assessment warning letters from 30 days to 90 days. The legislation also establishes a 6-year statute of limitations for the IRS to assess employer shared responsibility payment that begins on the due date for the return (or the date the return was filed, if later).
MSEB ACA Services
For 2024 ACA reporting, Marshall + Sterling will continue to print and mail 1095-C forms to individuals for our ACA clients. Any changes to our normal practices in future years will be pending further IRS guidance and advance notification.
