The Paperwork Burden Reduction Act (PBRA) gives Applicable Large Employers (ALEs) and health insurance providers a new option for ACA reporting. Instead of automatically mailing Forms 1095-B and 1095-C, you can use an alternative manner of furnishing statements by posting a notice on your website. While this offers flexibility, many organizations find that direct distribution still delivers better outcomes for compliance, efficiency, and customer service.
What Is the Alternative Manner of Furnishing Forms 1095-B and 1095-C?
The alternative furnishing method allows ALEs and insurers to meet requirements by posting a notice online instead of mailing forms to every recipient. IRS Notice 2025-15 provides guidance on this option.
To use this option:
- Post a clear, conspicuous notice on your website accessible to all recipients
- Include a statement that paper copies are available upon request
- Provide email or physical address for requests
- Include a phone number for questions
- Post by March 2, 2026 and keep online through October 15, 2026
What doesn’t change:
- Must electronically file Form 1094 with the IRS by March 31, 2026
- Must respond to individual requests within 30 days
- State requirements may still mandate paper copy distribution
The alternative method only addresses furnishing to individuals. All IRS filing obligations remain in place.
Why Individual Form Requests Create More Work
The alternative furnishing method shifts your workload from one predictable bulk distribution to ongoing individual fulfillment throughout the year. Each request requires staff time to verify identity, confirm health coverage months, locate the correct form, and process individual delivery.
Processing individual requests requires:
- Verifying each requester’s identity
- Confirm months of health coverage
- Locating forms in your system
- Processing individual mailings
- Managing unpredictable request timing
- Handling multi-year retroactive requests
Bulk distribution is a single event. Modern platforms generate all recipient copies when you prepare your IRS filing, requiring minimal additional effort beyond printing and postage.
How Distribution Impacts Customer and Employee Experience
Tax season is already stressful without adding extra steps to obtain necessary documents. Employees and health plan customers expect to receive tax forms automatically, just like they do with W-2s and 1099s.
Alternative furnishing method creates friction:
- Recipients must remember to check your website
- Must navigate request process and wait up to 30 days
- May miss tax deadlines if they request late
- Increases inquiries to HR and customer service teams
Direct distribution improves experience:
- Forms arrive when recipients need them
- No action required from recipients
- Recipients can file taxes immediately
- Reduces HR and customer service inquiries
For health insurers, automatic delivery is a customer service differentiator. For employers, it supports positive employee relations and reduces unnecessary contact during busy tax season.
State 1095 Form Requirements: CA, NJ, RI, MA, DC
While federal law now allows the alternative furnishing method, several states maintain their own health coverage reporting requirements that don’t recognize this flexibility. These states require direct distribution to residents regardless of the federal option.
States requiring form distribution:
- California: Furnish by January 31
- New Jersey: Furnish by March 2
- Rhode Island: Furnish by March 2
- Massachusetts: Furnish MA 1099-HC by January 31
- Washington, D.C.: District-specific requirements
Multi-state challenges:
- Track employee locations for different rules
- Meet varying state deadlines
- Risk state penalties even if federally compliant
Universal distribution simplifies this:
- Single process covers all jurisdictions
- No employee segmentation by state
- Ensures compliance everywhere
For multi-state ALEs and insurers, managing different approaches often outweighs cost savings from the alternative furnishing method.
Using Your AIR System Filing Infrastructure Efficiently
Every ALE already maintains comprehensive systems for IRS filing through the Affordable Care Act Information Returns (AIR) system. Health insurers maintain similar reporting infrastructure to comply with their filing obligations.
Your existing systems handle:
- Employee eligibility and hours tracking
- Coverage offers and affordability calculations
- Premium amounts for all 12 months
- XML file generation and transmission
- TIN matching and address validation
These systems operate regardless of distribution choice. IRS electronic filing by March 31 is mandatory for all filers.
Marginal cost of distribution:
- Data already collected for IRS filing
- Forms already generated
- Platforms produce recipient PDFs automatically
- Only additional costs are printing and postage
Since you must maintain filing infrastructure, anyway, generating recipient copies represents minimal incremental expense.
Preventing 1095 Form Errors Before IRS Penalties
When you distribute forms early, recipients have time to review them and catch errors while correction is still straightforward. This creates an early warning system that helps you avoid costly penalties for incorrect information.
Early detection prevents penalties:
- Errors found in March can be corrected by August 1
- Earlier corrections face lower penalty tiers ($60-$130 vs $340 per form)
- Recipients catch discrepancies you might miss
- Fresh data makes investigation easier
Delayed discovery creates problems:
- Recipients who don’t request forms never review them
- Errors undetected until IRS matching
- Late corrections trigger maximum penalties ($340-$680 per form)
- Name/TIN mismatches surface a year later
Direct distribution creates a quality control checkpoint before penalties escalate.
Frequently Asked Questions
Who must use Forms 1095-B and 1095-C?
Applicable Large Employers (50+ full-time equivalent employees) use Form 1095-C. Health insurance providers and self-insured plans use Form 1095-B. Both can now use the alternative manner of furnishing statements or direct distribution.
Is form distribution required?
No. You can use the alternative manner of furnishing statements as described in IRS Notice 2025-15 instead. However, IRS filing remains mandatory, and state laws may require distribution regardless of federal flexibility.
What are the risks of not distributing forms?
Increased request processing costs, potential state violations in CA, NJ, RI, MA, and DC, reduced satisfaction, and delayed error detection leading to higher penalties.
Do state laws override federal options?
Yes. California, New Jersey, Rhode Island, Massachusetts, and Washington, D.C. require distribution despite federal flexibility.
How does eFileMyForms help?
eFileMyForms handles Form 1094 and 1095 preparation, IRS and state filing, and recipient copy generation and delivery in one integrated platform for both ALEs and health insurance providers.
Additional Resources:
- ACA Forms: A Complete Guide to Filing Form 1095-B & Form 1095-C
- Important Tax Filing Deadlines To Stay on Track
- 1095-B and 1095-C Filing Requirements
- 1095-B IRS Instructions
- 1095-C IRS Instructions
Start your ACA filing today.
eFileMyForms makes IRS filing and recipient distribution simple and compliant.