If your business provides health coverage, you should be aware of new regulations put in law by two bills recently signed by President Biden.
These new regulations will impact reporting requirements and include penalty provisions for employers and health insurance providers that provide minimum essential health care coverage under the Patient Protection and Affordable Care Act. Below is a breakdown of the key changes:
1. Form 1095-C furnishing changes
Employers and health insurance providers are now only required to furnish Forms 1095-B and 1095-C to covered individuals if it is requested by said individual. There are certain other requirements that employers or health insurance providers will need to meet for providing notice to these recipients, including:
- Employer or healthcare provider must post a notice on their website detailing the recipients right to request a copy of their form.
- The notice must be posted in the time and manner required by the IRS.
- Employer or healthcare provider must provide a statement no later than January 31st of the following calendar year or 30 days after the request.
Previously, the IRS only permitted this process for furnishing Form 1095-B (and 1095-C in certain cases), however this new legislation extends those furnishing permissions to employers and healthcare providers for all Form 1095-B and 1095-C recipients.
2. Employers and health insurance providers may report date of birth for a covered individual when a tax identification number (TIN) is not available.
The IRS already permits this flexible TIN reporting for Forms 1095-B and 1095-C.
3. Forms 1095-B and 1095-C may be furnished electronically.
4. Employers and health insurance providers have 90 days to to respond to Letter 226-J for a proposed assessment for failure to offer minimum essential coverage.
The IRS currently only provides a 30-day window to respond.
5. A six-year statute of limitations applies to the penalty for failure to provide minimum essential coverage.
These changes start with the tax year 2024 statements (filed in early 2025). Additional information regarding the two new legislations can be found here and here.
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