Alternative Distribution of Form 1095-C

Simplify ACA Reporting with Our Affordable and Accurate Solution

On December 23, 2024, President Biden signed into law two bills that simplify the Affordable Care Act (ACA) reporting requirements for employers. These landmark changes, effective immediately, are designed to reduce administrative burdens while maintaining compliance with ACA mandates. See our prior article by clicking here.

Employers should take note of the updated requirements which apply to the 2024 reporting year.

Key Changes

Under the ACA, employers must furnish some forms to individuals and file other forms with the IRS. The new law modifies the requirements for furnishing forms to individuals but does not change IRS filing requirements.

The following requirements are still in place:

1. Applicable Large Employer (ALE) Reporting. ALEs must produce a Form 1095-C for every employee who was full-time for any month in 2024, regardless of whether the plan is fully insured or self-funded.
2. Coverage Reporting. Employers of any size with a self-insured health plan must document coverage under that self-insured plan for any month of the year. Coverage is identified either in Part III of Form 1095-C or on Form 1095-B.
3. IRS Transmission. Employers must transmit Forms 1095-C and Forms 1095-B to the IRS.

Employers now have 3 options for furnishing 1095 forms to employees and covered individuals:

1. Physical Delivery. Employers can still provide forms by first-class mail or in-person delivery.
2. Electronic Delivery. Employers can still send forms electronically if the individual consents.
3. NEW: Alternative Option. Employers can now forego automatically furnishing Form 1095-B or Form 1095-C and instead provide the form only upon request if (a) the employer posts a notice on the employer’s website saying that forms are available upon request; and (b) upon receiving a request, the employer provides the form within 30 days or by January 31, whichever is later.

Steps for Employers Opting for the Alternative Option

Specific guidance for compliance with the alternative method for 1095-C distribution has not been finalized, but it is widely believed that the requirements will follow the rules already in place for alternative distribution of Form 1095-B. Employers who decide not to mail Form 1095-C and instead provide it upon request are advised to take the following steps:

1. Post a Notice on the Employer Website. Clearly state that the forms are available upon request and include instructions for making a request. Ensure the notice is accessible and prominently displayed.
2. Establish a Request Process. Set up a system for receiving and tracking requests, whether through email, phone, or an online form.
3. Fulfill Requests Promptly. Provide the requested form within 30 days of receiving the request or by January 31, whichever is later.
4. Communicate the Option. Notify employees of this alternative option through company newsletters, emails, or employee portals.

The new distribution option is expected to reduce the administrative workload for employers while ensuring employees retain access to forms, making a significant step forward in reducing compliance complexities and giving employers greater flexibility in managing ACA reporting.