For over a decade, Applicable large employers (ALEs), those with 50 or more full-time equivalent employees, have been required to annually report health insurance coverage information to the IRS...
For over a decade, Applicable large employers (ALEs), those with 50 or more full-time equivalent employees, have been required to annually report health insurance coverage information to the IRS and to employees on Form 1095-C, and to distribute the Form 1095-C to employees. On December 23, 2024, Public Law 118-167, known as the "Paperwork Burden Reduction Act" (the Act) was enacted to simplify this reporting process. The IRS issued a notice with guidance on the Act that provides that employers are no longer required to automatically furnish Forms 1095-C to individuals, and that there is now an alternative way for employers to provide these forms and satisfy the reporting requirements.
While these changes are not brand new, the timing of enactment in late 2024 meant that it was too late for many employers to implement the alternative reporting format in time for reporting of 2024 coverage in 2025. However, employers who did not already make the switch may want to consider this option for the upcoming 1095-C reporting season in 2026 for 2025 coverage.
Alternative Reporting Option: The Act introduces a more flexible approach to delivering Form 1095-C health insurance statements. Under the Act:
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