Administrators--if your rockstar business official has given you the luxury of handling all of the PPACA/Obamacare reporting on your behalf, please forward this on to them!
Two new pieces of federal legislation have been signed into law. Oftentimes, the words “new,” “federal,” and “legislation” can cause a bit of heartburn. Thankfully, no antacid is needed today because these pieces of legislation are intended to decrease the burden of Affordable Care Act reporting. (Insert a chorus of business managers rejoicing here!)
Since the inception of PPACA reporting, all “applicable large employers” have had to provide a copy of the applicable 1095 forms to all full-time employees and to the IRS. The Paperwork Burden Reduction Act (H.R. 3797), passed recently, now provides some flexibility in terms of providing a copy of the applicable 1095 forms to employees.
If an employer follows the requirements of this new law, the employer is no longer required to provide employees with a copy of the form(s). Instead, an employer must provide a “clear, conspicuous, and accessible notice” that employees can request a copy of their form. The IRS is in charge of releasing guidance on how to fulfill this notice requirement. Unfortunately, they haven’t done that yet.
If the IRS uses “notice” rules for this new reporting option that are similar to other PPACA notice rules the IRS has used, it may look something like this:
“The employer must provide clear and conspicuous notice, in a location on its website that is reasonably accessible to all individuals, stating that individuals may receive a copy of their statement upon request.”
“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 individuals may use to contact the employer with any questions.”
“The employer must post the notice on its website by March 3, 2025, and retain the notice in the same location on its website through October 15, 2025.”
The new law is effective “to statements with respect to returns for calendar years after 2023,” meaning you could take advantage of it for your 2024 PPACA reporting. If you would like to do so, following the IRS’s notice posting rules outlined above may be your best bet given that the IRS has not yet put out guidance on the new law. So, it’s a bit aggressive but may be worth it if you dread sending out all those 1095 forms to your employees. However, that notice may be subject to change based on what the IRS eventually decides regarding this provision. We will keep you updated on the release of that guidance.
If you opt to go this route, once an employee requests their 1095 form, you must provide a copy within 30 days or, if later, by January 31. Don’t forget that the new law did not change filing requirements with the IRS, so all applicable large employers must still file their 1094 and all 1095 forms with the IRS.
We’ve heard from a few of you who have already sent 1095 forms to their employees. That’s great! Even though this new flexibility exists, there is no requirement that you take advantage of it. You can always choose to do it next year even if you continue sending the forms to employees this year, as you have in the past.
The second piece of legislation, the Employer Reporting Improvement Act (H.R. 3801), amends various sections of the Internal Revenue Code. One amendment to be aware of is that employers can now report an individual's full name and date of birth on 1095-B forms and Part III of 1095-C forms if that individual’s taxpayer identification number (TIN) is missing. Additional amendments include the provision of consent for electronic delivery of 1095-B and 1095-C forms, which is indefinite until revoked, meaning forms can be provided to individuals electronically year after year without having to obtain new consent annually. The employee consent for electronic delivery of these PPACA forms can be a bit clunky, so if you need a refresher you should contact your school attorney or tax professional.
Even better, for districts that have received an IRS Letter 226J assessing penalties under the Affordable Care Act, we now have 90 days to respond to the letter instead of 30 days. This new deadline applies to assessments and penalties proposed in taxable years after December 23, 2024. (Reminder, if you get a 226J letter, call us ASAP to help you.) Lastly, there is now a six year statute of limitations for the IRS’s assessment of ACA penalties beginning with returns filed in 2025 and beyond.
As we wait for IRS guidance to clarify the notice requirements for this act, please do not hesitate to contact us with any questions at ksb@ksbschoollaw.com or (402) 804-8000.
P.S. We are expecting the incoming Trump Administration to begin issuing Executive Orders right away today. We are tracking the executive orders and will put out another blog post soon with any pertinent information educators and boards need to know!