The recently enacted Paperwork Burden Reduction Act (“PBRA”) and the Employer Reporting Improvement Act (“ERIA”) have reduced certain reporting and disclosure requirements for employers and insurers.
Paperwork Burden Reduction Act. Applicable Large Employers are required to file Forms 1094 and 1095 with the IRS to report their compliance with the ACA’s employer-shared responsibility provisions (i.e., the employer mandate). Forms 1094 and 1095 provide certain information to the IRS and individuals who are covered by Minimum Essential Coverage (“MEC”).
For fully-insured group health plans, the insurance carrier is responsible for filing Form 1095-B, and the employer is responsible for filing Form 1095-C, with the IRS. For self-funded group health plans, the employer/sponsor is generally responsible for filing and disclosing both Forms 1095-B and 1095-C.
Previously, employers and health insurance providers of MEC had to disclose this information to employees and covered individuals (through the 1095-B and 1095-C tax forms) by January 31 of each year.
The PBRA has amended this requirement so that employers and health insurance providers are no longer required to send these tax forms to covered individuals, unless the information is requested. To take advantage of this new rule, however, the employer or insurer must notify certain employees and covered individuals (in a manner to be determined by the IRS) of their right to receive this information.
The PBRA applies to returns for calendar years after 2023.
Employer Reporting Improvement Act. Employers and health insurers that provide MEC must report information for each covered individual to the IRS, including the covered individual’s Tax Identification Number (TIN). The ERIA permits an individual’s date of birth to be substituted for the individual’s TIN if the TIN is not available. It also allows employers and insurers to offer 1095-B and 1095-C tax forms to individuals electronically, when the forms are requested.