Employee Benefits
IRS Notice 2025-15: Update To ACA Reporting Requirements Signed Into Law Under Biden Administration
IRS Notice 2025-15: Update To ACA Reporting Requirements Signed Into Law Under Biden Administration
Updated March 2025
Congress recently passed, and the President has signed, two laws impacting ACA reporting and employer-shared responsibility penalties. The summary below analyzes those rules.
Background
The Internal Revenue Code (the “Code”) imposes requirements on employers and insurance carriers to report medical coverage information to both the IRS and employees/covered individuals. Section 6055 of the Code requires (1) the insurance carrier of fully insured coverage to file Forms 1094-B/1095-B with the IRS and furnish Forms 1095-B to covered individuals and (2) plan sponsors of self-insured coverage to file Forms 1094-B/1095-B with the IRS and furnish Forms 1095-B to covered individuals. In addition, under Section 6056 of the Code, ALEs (defined as an employer that averaged 50 or more full-time and full-time equivalent employees in the previous year) are responsible for filing Forms 1094-C/1095-C with the IRS and furnishing Forms 1095-C to employees/covered individuals. Previously, the IRS required ALEs to furnish paper copies of these forms to every full-time employee. Employers and insurance carriers were also required to make three attempts to secure an employee’s dependent’s social security number before being able to substitute the dependent’s date of birth for the dependent’s social security number or Tax Identification Number (TIN) on the applicable 1094/1095 form.
Under Section 4980H of the Code, ALEs are subject to an employer shared responsibility penalty if they fail to offer sufficient coverage to their full-time employees. When the IRS believes an ALE owes such a penalty, it sends a letter (i.e., Letter 226-J) to the ALE informing it of the IRS’ intent to assess the penalty. The law currently provides that an ALE must respond to the 226-J letter within 30 days. Furthermore, the IRS can pursue employer shared responsibility penalties against an ALE into perpetuity, with no statute of limitations as to how long the IRS could pursue those penalties from an ALE.
