On Dec. 23, 2024, President Joe Biden signed two bills into law that will streamline the Affordable Care Act’s (ACA) reporting requirements under Internal Revenue Code Sections 6055 or 6056. Under these reporting rules, certain employers and health coverage providers (reporting entities) must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees. They must also provide related statements to individuals regarding their health plan coverage.
Individual Statements Only Required Upon Request
Electronic Consent for Individual Statements
The IRS currently allows reporting entities to offer Forms 1095-B and 1095-C to individuals electronically. The Employer Reporting Improvement Act codifies this flexibility and provides that statements can be provided electronically to individuals if they have affirmatively consented “at any prior time” (unless they have revoked such consent in writing).
Substituting Birth Dates for TINs
The new legislation 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 Pay-or-Play Provisions
Applicable large employers, or ALEs (generally those with 50 or more full-time employees), are subject to IRS penalties if they do not offer affordable minimum essential coverage under the ACA’s employer shared responsibility (“pay-or- play”) rules. 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 imposes a six-year time limit on when the IRS can try to collect assessments.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2024 Zywave, Inc. All rights reserved.
