The Affordable Care Act (ACA) reporting requirements have seen significant updates, and these changes directly impact how many of your clients—those classified as applicable large employers (ALEs)—navigate compliance this reporting season.
As an employee benefits broker, it’s crucial to understand these updates so you can guide your clients effectively and position yourself as a trusted advisor. Here’s what you need to know.
New 1095-C Distribution Option
Employers required to file 1095-C forms now have a new way to fulfill their obligation to distribute these forms to employees. Instead of mailing a form to every eligible employee, they can:
Post a notice on a public-facing website, allowing employees to request a copy of their 1095-C form.
This change can save your clients significant time and mailing costs. However, the notice must meet specific criteria:
It should be easy for employees to locate and access.
Employers can link the notice to another platform, like their HRIS system or a shared platform, for seamless management.
While this approach introduces efficiencies, the requirement for a public-facing notice may feel unconventional. Helping your clients navigate these nuances can solidify your value as their compliance partner.
Extended Deadlines for ESRP Letters
The Employer Shared Responsibility Payment (ESRP) 226-J letters from the IRS notify employers of potential penalties. A key update now gives employers:
90 days to respond to these letters, up from the previous 30 days.
This extended response time is a win for employers, as these letters often face internal delays before reaching the right individuals. Additionally, there’s now a six-year statute of limitations for these penalties, requiring employers to retain records for at least that period. Helping your clients implement robust record-keeping processes will ensure they’re prepared to respond promptly if a letter arrives.
How Brokers Can Add Value
These updates are opportunities for you to proactively support your clients:
Educate Your Clients: Ensure they understand the new 1095-C distribution option and the extended ESRP letter deadlines. Highlight the potential time and cost savings while advising on compliance requirements.
Audit Distribution Processes: Help your clients determine if the public notice option for 1095-C forms is right for them. Offer guidance on how to create and maintain a compliant public-facing notice.
Advocate for Record Retention: Stress the importance of maintaining six years of records to protect against penalties and ensure quick responses to IRS inquiries.
Position Yourself as a Compliance Partner: Use these updates as a way to deepen your client relationships. By demonstrating your knowledge and offering actionable guidance, you become an invaluable resource.
Why These Changes Matter
ACA compliance remains a critical aspect of your clients’ operations, and these updates offer new ways to streamline their processes.
By staying ahead of these changes and helping your clients adapt, you not only strengthen their compliance efforts but also position yourself as an indispensable partner in their success!
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