Both houses of Congress have recently passed, and President Biden is expected to sign, legislation that includes significant changes to Affordable Care Act (ACA) reporting requirements.

It is important to note that while this legislation will significantly alter federal ACA reporting requirements, it does not impact state-specific reporting obligations. California, New Jersey, Rhode Island, and Washington, DC all require Forms 1095-B/1095-C to be provided to covered individuals, and Massachusetts requires distribution of Form 1099-HC.

Background

• The Affordable Care Act requires all applicable large employers (ALEs), meaning employers with 50 or more full time/full time equivalent employees, to provide Form 1095-C to covered individuals as proof of minimum essential coverage.
• Non-ALEs (employers with fewer than 50 full time/full time-equivalent employees) with a self-funded plan are required to provide Form 1095-B to covered individuals on their plan.
• Issuers of fully insured medical plans are also required to provide Form 1095-B to covered individuals. Previous changes to reporting requirements for these plans were similar in nature in that they allowed for the 1095-B to be provided upon request, with the stipulation that issuers were required to notify participants of the availability of the form.

Paperwork Reduction Act

• The Paperwork Reduction Act removes the obligation for employers to send Form 1095-B/1095-C to all employees covered under their health plan.
• While the Form 1095-B/1095-C will no longer have to be provided to every covered individual, it will be required to be provided to any covered individual who requests it. If requested, the form must be provided by the later of January 31 or within 30 days of the request.
• Employers are required to inform covered individuals of their right to request a copy of Form 1095-B/1095-C.

Employer Reporting Improvement Act

• The Employer Reporting Improvement Act (ERIA) incorporates IRS regulations allowing forms 1095-B/1095-C to be provided to individuals electronically.
• The ERIA will allow for a date of birth to be substituted if a Tax Identification Number (such as Social Security number) is unavailable.
• Notably, the ERIA also requires that ALEs be given at least 90 days to respond to 226-J letters (ACA penalty letters) when an employer shared responsibility payment is imposed. This extends the previous 30-day window for employers to respond.
• The ERIA establishes a statute of limitations of six years on the collection of employer shared responsibility payments.