Guidance Released for Form 1095-C Alternative Distribution Option

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At the end of 2024, President Biden signed the Paperwork Burden Reduction Act into law, which amended the Affordable Care Act to provide that employers are no longer required by default to deliver Forms 1095-C/1095-B to recipients if a series of criteria are satisfied. Instead, employers will be in compliance with the ACA’s furnishing requirement as long as they provide a “clear, conspicuous, and accessible notice” that recipients may request a copy of their Form 1095 and, upon receipt of request for a Form 1095, provide the statement to the recipient.

Guidance for how employers must provide such notice to their employees about their Forms 1095-B was already available, but at the time the Paperwork Reduction Act was signed into law, instructions for Forms 1095-C had not been released.

At the end of last week, the IRS confirmed that previous guidance set forth for the distribution of Forms 1095-B can now also be relied upon for distribution of Forms 1095-C.

The notice requirements for both types of forms are as follows:

A clear and conspicuous notice must be posted on a website that is reasonably accessible to all possible Form 1095 recipients. The employer’s public-facing website is likely the most appropriate location for this notice.

The employer may post a statement reading “Tax Information” on the website’s main page, which can link to a secondary page with the header IMPORTANT HEALTH COVERAGE TAX DOCUMENTS that includes the actual notice.

The notice must include an email address, physical address, and telephone number that can be used to request a copy of Form 1095.

For the 2024 reporting year, the notice should have been posted by March 3, 2025. The notice must remain in the same location on the website through October 15, 2025.

If, after posting notice of availability, the employer receives a request for a Form 1095, the Form 1095 must be provided within 30 days. Of note, the employer would need to hand-deliver or mail the form unless they obtain specific consent from the individual to provide the Form 1095 electronically.

Applicable Large Employers (ALEs) that wish to continue furnishing their Forms 1095-C to all recipients as part of their standard ACA reporting process (e.g., by mail) can continue to do so. The Act and the newly released instructions simply provide an alternative furnishing option for ALEs to consider. Given the March 3, 2025 posting deadline for employers to take advantage of this relief for 2024 Forms 1095-C, interested ALEs may want to begin first utilizing this alternative for the 2025 filings due in 2026.

Notably, this relief does not imply that employers responsible for furnishing and filing Forms 1095 should hold off on creating such forms unless/until employees request them. All ALEs and those non-ALEs with self-insured or level-funded health plans are still required to file their 2024 Forms 1094/1095 with the IRS by March 31, 2025. Similarly, state-level ACA form furnishing requirements remain unaffected by this alternative to the federal distribution requirement. As a reminder, MZQ furnishes Forms 1095 to recipients at no additional cost to our ACA reporting clients.

Content provided to Q4intelligence members by MZQ Consulting, LLC

Photo by mehaniq

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