The recently enacted Paperwork Burden Reduction Act and the Employer Reporting Improvement Act made various changes to the reporting process under the Affordable Care Act (ACA). [1] Among the changes, these laws 1) establish a new optional method to provide IRS Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) only upon request, and 2) address rules for using a taxpayer’s name and date of birth (DOB) when a taxpayer identification number (TIN) is not available.
Below are some clarifications and responses to questions about these new laws, including implications for state reporting, using name and DOB instead of TIN, and other issues.
Q: Does the new option to provide the Form 1095-C only upon request apply in states that require distribution of the form to administer and enforce their state individual mandate?
No. The new option established by the Paperwork Burden Reduction Act applies only for federal law purposes of providing the Form 1095-C to individuals under the ACA. Employers will still need to meet the requirements in states that mandate reporting on the Form 1095-C related to their own minimum essential coverage rules.
Q: Does the Paperwork Burden Reduction Act change how an applicable large employer reports to the IRS?
No. The act does not change the rules that govern how applicable large employers (ALEs) report to the IRS, meaning that the forms must still be prepared and submitted to the IRS annually. The filings to the IRS are due February 28, 2025 (if filing on paper) or March 31, 2025 (if filing electronically).
Q: Can employers use this new optional method right away?
The provision to provide the Form 1095-C only upon request is effective for returns for calendar years after 2023 (2024 forms due in 2025). However, the act requires that employers provide “clear, conspicuous and accessible notice.” Guidance on this notice requirement has not been issued yet.
Under previous IRS guidance allowing Form 1095-B to be provided only upon request, 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:
Q: If employers adopt this optional method, can they provide requested forms electronically?
This question may be answered in future guidance. Existing guidance clarifies that forms may be provided electronically if the individual has consented to electronic distribution. If the IRS adopts a similar rule for optional distribution of the Form 1095-C, ALEs could be required to provide paper copies if they have not obtained consent for electronic distribution.
Q: The Employer Reporting Improvement Act allows employers to use the full name and DOB in place of a TIN. Does this mean employers can stop soliciting TINs?
Employers should continue to solicit TINs. The Employer Reporting Improvement Act provides that “the Secretary [of the Treasury] may allow” the full name and DOB to be used when the employer or insurer cannot obtain a TIN. Guidance from the Secretary requires employers to solicit a TIN three times (one initial attempt followed by two annual attempts).
