Last Updated on January 28, 2025

Two significant pieces of legislation were signed into law on December 23, 2024: the Employer Reporting Improvement Act and the Paperwork Burden Reduction Act. These laws represent a major shift in simplifying employer responsibilities under the Affordable Care Act (ACA). Here’s a breakdown of what these acts entail, the changes they bring and how they impact employers and their organizations.

What Is Changing with the Employer Reporting Improvement and Paperwork Reduction Acts?

Recent updates under these laws include specific provisions aimed at simplifying compliance for employers:

• Simplified Reporting: Currently, employers must report each individual’s name and Social Security Number (SSN) to the IRS. For returns filed after December 31, 2024, if an employer cannot obtain the SSN, they can report the individual’s full name and date of birth.
• 1095 Form Distribution: Employers are no longer required to distribute IRS Forms 1095 to employees. Instead, they must issue a clear, conspicuous and accessible notice informing employees that they may request the form. Employers must furnish the form no later than January 31st of the following year or, if later, 30 days after the request is made.
• Electronic Delivery Options: Employers may distribute individual forms (1095-B or 1095-C) electronically if the employee has consented to electronic delivery. If the employee revokes consent in writing, the form must be provided on paper.
• Extended Response Times: Employers receiving a penalty notice currently have 30 days to respond to the IRS unless an extension is granted. Under the new law, applicable large employers (ALEs) now have at least 90 days from the date of the first letter to respond.
• Statute of Limitations on Penalties: The new law introduces a six-year statute of limitations for assessing penalties. This period begins on the return’s due date or, if later, the date the return is filed.

These updates provide employers with greater flexibility and additional time to comply, ensuring accurate reporting and proper responses to penalty assessments.

What Has Changed for Employers?

The combined effect of these two acts marks a significant shift in the regulatory landscape. Employers can now benefit from:

• Reduced Administrative Burden: The changes mean fewer steps in managing compliance, freeing up time for HR teams and employers.
• Cost Savings: By cutting down on form distribution and reporting complexities, businesses can save on operational expenses.
• Improved Response Times: Extended deadlines for responding to IRS penalty notices and clear guidelines for electronic communications ease the compliance process.

What Employers Should Do Next Regarding the Employer Reporting Improvement and Paperwork Reduction Acts

To take full advantage of these legislative changes, employers should review their reporting processes and audit current systems to align with the updated requirements, ensuring compliance with the new laws.

Employers should also update their communication strategies to inform employees about the changes to form distribution and provide clear instructions on how employees can request documents if needed. Adopting digital solutions that facilitate electronic requests and submissions can help streamline operations further.

Finally, staying informed by keeping up with guidance from the IRS and other regulatory bodies as they roll out specific implementation details will ensure continued compliance.

A Step Toward Simplicity with MyHRConcierge

The signing of the Employer Reporting Improvement Act and the Paperwork Burden Reduction Act is a welcome change for businesses navigating ACA compliance. By reducing red tape and introducing more efficient processes, these laws allow employers to focus on their core operations while maintaining compliance.

MyHRConcierge is here to help ease your ACA reporting pains and maintain compliance with ever-changing laws and regulations. MyHRConcierge’s robust ACACompli service can help you simplify your Affordable Care Act reporting.

If you’d like to sign up for our year-end reporting services, you can do so here. To learn more, contact us today at ccooley@myhrconcierge.com, 855-538-6947 ext. 108, or schedule a free consultation below: