ACA Reporting to Employees on FORM 1095-C is Now Optional

Under the recently passed Paperwork Burden Reduction Act (H.R. 3797), effective for 2024 reporting, employers are no longer required to furnish paper copies of IRS Form 1095-C to employees (reporting requirements to the IRS is unaffected) provided employees are given proper notice of the ability to request Forms 1095-C, and employers provide such copies within 30 days of any such request.

Please note that Form 1094-C and Form 1095-C reporting requirements to IRS are unaffected and still apply in full force.

Details of the New Law and Additional Insights are as Follows:

The recently enacted law provides employers an alternative to providing paper Form 1095-C’s to all employees.  Under the new law, an employer may instead meet its obligations by:

• Providing “clear, conspicuous, and accessible notice (at such time and in such manner as the Secretary may provide)” that an employee may request a copy of such Form 1095-C statement, and
• Upon any such request, the employer furnishes such paper Form 1095-C to an employee no later than the later of: (i) January 31 following the calendar year, or (ii) 30 days after the date of such request.

We are awaiting further guidance on certain key details such as what constitutes “clear, conspicuous, and accessible notice.”  However, although ultimately uncertain, we expect the IRS to issue guidance similar to that for other information return reporting that would allow employers to meet these notice obligations by:

• posting a notice on its website that is reasonably accessible to all employees, stating that employees may receive a copy of their Form 1095-C statement upon request;
• posting such notice on the employer’s website by January 31, 2025, and retaining the notice in the same location on its website through October 15, 2025;
• providing a copy of Form 1095-C to any employee requesting one within 30 days of the date the request is received; and
• by providing the Form 1095-C electronically if the employee affirmatively consents.

Note that the due date for submitting paper copies of Form 1095-C to employees is March 2, following year-end, but any employer taking advantage of this change should have forms prepared by January 31 in the event the employee requests a paper copy.

Also, as previously mentioned, this law made no changes to employers’ obligations to furnish Forms 1094-C and 1095-C to the IRS.  Those forms are due to the IRS by February 28, 2025 (or March 31, 2025, if filing electronically).