By: HUB’s EB Compliance Team

Following on the enactment late last year of two bills to simplify employer reporting under the Affordable Care Act (“ACA”), the IRS has now released its first bit of guidance in the form of Notice 2025-15. The notice provides guidance on how employers can avoid providing individual Forms 1095-C to their employees. Perhaps unsurprisingly, it essentially piggybacks on existing guidance that applies to insurance carriers and other coverage providers.

Background

Under the ACA employer reporting rules, applicable large employers (i.e., those subject to ACA’s employer mandate) generally must provide a Form 1095-C to the IRS and to each full-time employee. The Paperwork Reduction Act, enacted late last year, allows employers to instead post a clear, conspicuous, and accessible notice that allows individuals owed a notice to request them. In other words, instead of sending the form, individuals can be told it is available on request. If an individual makes a request for a form, it must be provided within 30 days (if it is for a prior year) or by next January 31 (if it is for the current year).

Note that the forms still must be provided to the IRS as they assist the IRS in determining which individuals are eligible for premium tax credits to pay for individual health insurance coverage.

Similar rules apply to insurance carriers and other providers of coverage. They are required to issue Forms 1095-B and the regulations applicable to them already provided for a notice-in-lieu of distribution method before these new laws were passed. Even so, the relief provided by these new laws also applies to them.

The Guidance

The notice provides that applicable large employers (ALEs) can meet the notice-in-lieu of distribution by following with the existing rules that apply to insurance carriers and other coverage providers. Specifically, the requirements are:

  1. The employer must post a clear, conspicuous, and accessible notice on a website accessible to all full-time employees.
  2. It must be written in plain, non-technical terms and be in letters large enough to call their attention to the fact that it pertains to a tax statement. For example:
    1. an employer’s website could include a statement on the main page--or a link on the main page, reading “Tax Information”, to a secondary page that includes a statement--in capital letters, “IMPORTANT HEALTH COVERAGE TAX DOCUMENTS'”;
    2. explains how responsible individuals may request a copy of Form 1095-C; and
    3. includes the employer’s email address, mailing address, and telephone number.
  3. The statement must be posted by no later than the deadline for furnishing the Forms 1095-C, plus extensions. Since there is an automatic 30-day extension available, the notice can be posted by March 3 of a given year (or March 2 in leap years).
  4. As noted above, if an individual requests a copy of the Form 1095-C, it must be provided within 30 days (if the request is for a prior calendar year’s form) or by January 31 of the following year (if it’s for the current year’s form). Notably, the deadline for furnishing the forms on request does not appear to include the automatic 30-day extension.

These changes are effective beginning with forms for the 2024 calendar year. However, given that the deadline for providing those forms was March 3, it seems unlikely that most employers were able to take advantage of it for 2024.

Takeaways

This simplification of reporting is welcome relief to employers, even if they could not utilize it for the 2024 forms. Employers should begin working now with their reporting vendors to suppress mailing the forms for 2025 and post a relevant notice on their website. Given that the forms have little tax impact for anyone not receiving a premium tax credit, request for forms will likely be few and far between. As a result, this simplification will hopefully lead to significant cost reduction for employers.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER 

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.