ACA Reporting: New Legislation Helps Ease Employer Burden

Updated on Feb 25, 2025, with additional information pertaining to Notice n-25-15, published by the IRS on February 21, 2025.

Two new laws signed on December 23, 2024, are set to make Affordable Care Act (ACA) reporting easier and less time-consuming. The 'Paperwork Burden Reduction Act' and the 'Employer Reporting Improvement Act' introduce changes that help streamline reporting requirements for filings due after December 31, 2024. While these updates offer relief, navigating regulatory requirements in this new landscape requires careful planning and the right tools. Here’s help on what employers will want to know - 

Key Legislative Changes Within the Paperwork Burden Reduction Act

Alternative Method for Furnishing Form 1095-C

The Paperwork Burden Reduction Act allows applicable large employers (ALEs) to opt for an alternative delivery method for furnishing Form 1095-C to full-time employees and covered individuals. Instead of sending forms automatically, employers now only need to provide them upon request, as long as they:

1. Provide clear, conspicuous, and accessible notice to individuals about their right to request the form.
2. Furnish the requested form no later than the later of:

• January 31 of the year following the calendar year for which the return was required to be made (i.e., for tax year 2024, form must be furnished by Jan. 31, 2025) ,
• or 30 days after the date of the request.

Additional Details to Consider if Utilizing the Alternative Method of Furnishment

As a follow up to the December, 2024 passage of the Paperwork Burden Reduction Act, the IRS has provided further guidance and clarification on the ‘Alternative Method of Furnishment’ requirements under the Affordable Care Act in notice n-25-15, published on February 21, 2025. Previously, Alternative Method of Furnishment requirements applied only to Forms 1095-B, and while it could be assumed that the same requirements would apply to Forms 1095-C, the IRS has eliminated room for error with the posting of notice n-25-15. 

Highlights from the notice include:

• Sections 6055(c)(3) and 6056(c)(3) have been added to the code, (Title 26 US Code § 6055), and apply to returns required for calendar years after 2023

• A person responsible for reporting coverage shall be treated as timely furnishing the written statements required under 6055(c)(1) or section 6056(c)(1) if the person:

  • Provides clear, conspicuous, and accessible notice that any individual to whom a statement would otherwise be required to be furnished may request a copy of such statement and the copy is timely furnished

    • Timely furnished means by January 31 of the year following the calendar year for which the return was required to be made (i.e., for tax year 2024, form must be furnished by Jan. 31, 2025), or

    • 30 days after the date of the request, whichever is later

    • The notice must be posted on the company’s website that is reasonably accessible to all responsible individuals

    • The notice must be posted by the due date for furnishing the statement (i.e., for tax year 2024, notice must be posted by March 3, 2025)

    • The notice must be posted through October 15 of the year following the calendar year to which the statement relates (i.e., for tax year 2024, notice must be posted through October 15, 2025)

    • Statements may be provided electronically pursuant to Treas. Reg. § 1.6055-2, which states affirmative consent to electronic delivery must be received from the individual

In addition to highlights from n-25-15, Treasury Regulation § 1.6055-1(g)(4)(ii)(B) helps clarify an employer’s notice requirements when utilizing the Alternative Method of Furnishment option. The notice must include an email address, a physical address to which a request for a statement may be sent, and a telephone number that responsible individuals may use to contact the reporting entity with any questions.  

For employers transitioning to this alternative method, compliance requires clear communication and the ability to provide timely access to requested forms. Employers are advised to be cautious when considering the new form furnishment options, particularly for those with employees residing in states with individual healthcare mandates, such as California, Rhode Island, New Jersey, Washington, D.C., Vermont, and Massachusetts. State-level form furnishment rules remain unchanged. Forms 1095 are still required to be furnished to residents of those states, or in the case of the District of Columbia, residents or employees of the District, by the respective state reporting deadlines each year. MA-1099-HC continues to be required to be distributed to residents of the state of Massachusetts by January 31 each year. 

Additionally, for recipients who request a copy of their form, employers will still need to print and mail or hand deliver a hard copy of the form unless the employee has affirmatively consented to electronic delivery, as the new legislation makes no mention of changes to the affirmative consent requirement within both the ACA Employer Mandate or the Alternative Method of Furnishment option that was previously limited to only Forms 1095-B. Employers will want to ensure they continue to have a proper system in place for handling such requests.

Equifax will continue to monitor for further clarification and regulatory guidance from the new administration and will share additional information as it becomes available.

Key Legislative Changes About the Employer Reporting Improvement Act

Flexibility for Tax Identification Number (TIN) Reporting and Electronic Statements

The Employer Reporting Improvement Act now permits:

• The use of an individual’s full name and date of birth if their TIN is unavailable to the person required to provide the return.
• The electronic distribution of ACA forms with the employee’s affirmative consent, unless affirmative consent is revoked by the employee at any time. This extends the affirmative consent to employees post termination from the employer, which is a step toward reducing administrative burden and improving efficiency.

Extended Deadlines for IRS Letter 226J Responses

Employers now have 90 days—an increase from from 30 days—to respond to IRS Letter 226J regarding proposed penalties. This extension provides much-needed time to gather data and respond accurately, helping employers reduce or possibly avoid potentially costly errors, without having to file a request for an extension upon receipt of each 226-J notice.

Establishes a Statute of Limitations for Employer Shared Responsibility Payments (ESRP)

The new law establishes a 6-year statute of limitations for the IRS to assess ESRP penalties. This offers more clarity and helps reduce long-term uncertainty for employers managing their ACA process.

These changes help open the door for more streamlined processes, but adopting new systems—especially for the alternative delivery method—can often be challenging without the right support. Here’s how Equifax can help:

• Electronic Delivery: Our Tax Form Management employee platform, trusted and used by employers and employees for over a decade, helps enable a more accurate and efficient electronic distribution of ACA forms, including accessible notice to employees and easier access for current and former workers.

• Greater Security: We prioritize data security, helping you better meet IRS guidelines and helping minimize potential risks associated with electronic reporting.

• Simplified Form Furnishment: Our solutions help streamline the process of furnishing forms upon request, providing you with a solution to help you meet your required deadlines.

• Expert Support: Our team provides updates on legislative topics and offers hands-on support throughout the transition to electronic delivery.

Employer Next Steps:

1. Assess your current ACA reporting processes.

2. Evaluate your readiness for electronic delivery.

3. Consider Equifax Services to help you simplify your ACA processes.

4. Stay informed about further IRS guidance.

Equifax has years of experience in ACA reporting, providing reliable solutions and expert support. Contact us today to learn how we can help you better optimize your processes, potentially reduce your costs, and help keep you better informed in this evolving regulatory environment.

The information provided is intended as general guidance and is not intended to convey any tax, benefits, or legal advice. For information pertaining to your company and its specific facts and needs, please consult your own tax advisor or legal counsel.  Equifax Workforce Solutions provides services that can help employers reduce their compliance risks. Details on our provision of these services and related support will be contained in your services agreement. Links to sources may be to third party sites. We have no control over and assume no responsibility for the content, privacy policies or practices of any third party sites or services.