The Paperwork Reduction Act (H.R. 3797) (“PBRA”), passed by the 118th Congress on December 11, 2024, is legislation aimed at reducing the administrative burden on businesses and individuals. This legislation aims to significantly reduce the administrative burden faced by businesses and individuals.

Here’s a breakdown of the Paperwork Reduction Act key provisions:

– – Focus on Employer Reporting: A central focus of the act is to ease the reporting requirements for employers, particularly those related to health insurance coverage.
– – Simplified 1095-C Forms: The act modifies provisions under the Affordable Care Act. Employers will no longer be obligated to send physical copies of the 1095-C form, which provides employees with information about their health insurance coverage.
– – Alternative Reporting Methods: Employers will have the option to provide employees with clear and accessible instructions on how to request a copy of their 1095-C form. This shift from mandatory physical distribution to an “on-demand” system is intended to streamline the process.
– – Reduced Administrative Costs: By simplifying reporting requirements and eliminating the need for mandatory paper forms, the act aims to reduce administrative costs for businesses of all sizes. This could translate into cost savings that can be reinvested in other areas of their operations.
– – Improved Efficiency: The streamlined reporting process is expected to improve efficiency for both employers and employees. Employers will spend less time on administrative tasks related to health insurance reporting, allowing them to focus on other priorities. Employees will have greater flexibility in accessing their coverage information.

The Paperwork Reduction Act represents a significant step towards reducing the administrative burden on businesses. By simplifying employer reporting requirements related to health insurance coverage, the act aims to create a more efficient and less costly system for both employers and employees.

And employers may benefit from another new federal law. The Employer Reporting Improvement Act (H.R. 3801) (“ERIA”) was passed alongside the Paperwork Reduction Act in December 2024. It focuses on streamlining Affordable Care Act (ACA) reporting requirements for employers, specifically:

– – Codifying Existing IRS Regulations: The ERIA codifies certain IRS regulations designed to simplify ACA reporting for employers. This provides legal certainty and reduces the risk of future regulatory changes that could increase the burden on businesses.
– – Establishing a Statute of Limitations: A crucial provision of the ERIA establishes a six-year statute of limitations for penalty assessments related to ACA coverage failures. This provides much-needed clarity and limits the potential for indefinite liability for employers.
– – Flexibility in Reporting: The ERIA allows employers greater flexibility in fulfilling their reporting obligations. For example, it permits electronic delivery of 1095-B and 1095-C forms to employees who consent to receive them electronically.
– – Alternative Identifier for Social Security Numbers: The ERIA allows employers to use an individual’s date of birth as an identifier in certain situations where the Social Security Number is unavailable. This helps to ensure accurate reporting even in cases where obtaining a Social Security Number may be challenging.
– – Extended Response Time for IRS Notices: The ERIA allows employers more time to respond to Employer Shared Responsibility (ESR) letters from the IRS, giving them additional time to investigate and address any potential issues.

The ERIA complements the Paperwork Reduction Act by providing specific, targeted improvements to ACA reporting requirements. By codifying existing regulations, establishing a statute of limitations, and increasing flexibility for employers, the ERIA aims to significantly reduce the administrative burden associated with ACA compliance. The specific provisions and their impact may vary depending on individual circumstances and the specific requirements of the IRS.

Two New Federal Laws Reduce Employer Administrative Burdens