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This post has been updated as of March 4, 2025.

Seyfarth Synopsis: On December 17, 2024,
the House Ways and Means Committee and the Senate Finance Committee presented
two bills – the Paperwork Burden Reduction Act (HR 3797) and the Employer Reporting Improvement Act (HR 3801) – to President Biden, which he signed into law on December 23, 2024.  Both laws modify provisions under the Patient Protection and Affordable Care Act (the “ACA”) related to the 1095-B and 1095-C tax forms. Subsequently, on February 21, 2025, the IRS released Notice 2025-15, which provides employers with guidance for furnishing the 1095-B and 1095-C tax forms to individuals. Below are some highlights of the acts and subsequent guidance.

The Paperwork Burden Reduction Act

The Paperwork Burden Reduction Act (PBRA) amends the Internal Revenue Code (the “Code”) and reduces unnecessary paperwork related to health insurance coverage reporting for employers and employees. Previously, employers that provided minimum essential coverage were required to report this information to the Internal Revenue Service (“IRS”) and provide each covered individual with a 1095-B or 1095-C tax form by January 31 of each year. Effective for tax forms starting with the 2024 calendar year, the PBRA provides for the following changes:

  • Employers are no longer required to send the 1095-B and 1095-C tax forms to covered individuals unless a form is requested. However, employers must inform covered individuals of their right to request a form; and
  • If a 1095-C tax form is requested, it must be furnished to the individual by January 31 or 30 days after the date of the request, whichever is later.

In sum, the IRS allows the 1095-B tax form to be made available to individuals only upon request. The PBRA extended the same flexibility to the 1095-C tax form. This means that starting with the forms that would have otherwise been required to be sent out in January 2025, they are now only required to be sent upon request, provided the below notice requirements are met.

The Employer Reporting Improvement Act

As mentioned above, previously employers were required to provide each covered individual with a 1095-B or 1095-C tax form by January 31 of each year. Employers must report required information using the covered individual’s Tax Identification Number (“TIN”). Additionally, if a large employer (i.e., that has 50 or more full-time employees) receives a proposed assessment from the IRS (i.e., a Letter 226-J), the employer only had 30 days to respond.

Effective for tax forms due after December 31, 2024, the Employer Reporting Improvement Act (ERIA) provides for the following changes:

  • Codifies the IRS’ current practice of allowing an individual’s date of birth to be substituted for the individual’s TIN if the TIN is not available.
  • Codifies the IRS’ current practice of allowing employers to offer the 1095-B and 1095-C tax forms to individuals electronically if an individual affirmatively consented to receive forms electronically at any prior time. However, an individual may revoke such prior consent in writing.
  • Extends to 90 days the time for employers to respond after receiving its first Letter 226-J regarding a notice of proposed assessment; and
  • Implements a six-year statute of limitations for collecting penalty assessments.

These bills provide relief to large employers and reduce their burden under the ACA’s reporting requirements. Importantly, the new acts do not change the distribution requirements for states that require distribution in connection with their individual health insurance mandates. As of today, the states with individual mandates include California, Massachusetts, New Jersey, Rhode Island, Vermont and Washington, D.C. Many of these states permit employers to meet their state law requirements by delivering federal 1095-C tax forms to individuals. As a result, you may be able to deliver such 1095-C tax forms in accordance with the federal instructions, which permit electronic delivery with consent.

IRS Notice 2025-15

The IRS released Notice 2025-15, which provides that the alternative manner of furnishing statements to non-full-time employees (found in the 2024 instructions for the 1095-C and 1095-B tax forms) now applies to full-time employees effective for tax forms that were otherwise required to be sent out in January 2025. Generally, the guidance provides that the notice must:

  • be “clear and conspicuous” in a location on the employer’s website that is reasonably accessible to all individuals, stating that an individual may receive a copy of their statement upon request;
  • include an email address, a physical address, and a telephone number that individuals may use to contact the employer with any questions or to request a copy of their statement; and
  • be posted no later than March 3, 2025 (i.e., the otherwise applicable deadline to send the paper form) and remain posted through October 15, 2025 (i.e., the deadline for individuals to file their federal income taxes, with extension).

The guidance indicates that a notice on an employer’s website is “clear and conspicuous” if it includes a statement or link on the main page reading “Tax Information” and links to a secondary page that includes a statement, in capital letters, “IMPORTANT HEALTH COVERAGE TAX DOCUMENTS”.

Please contact your employee benefits attorney at Seyfarth if you have any questions.