In an effort to streamline reporting requirements and improve the process for employers and health insurers, the Employer Reporting Improvement Act (H.R. 3801) introduces significant changes to provisions under the Patient Protection and Affordable Care Act. This legislation impacts how businesses report health coverage information and clarifies key procedures for both employers and individuals.

At the core of the act is the requirement for employers and health insurance providers to report proof of minimum essential coverage (MEC) for each covered individual. This is done using IRS forms 1095-B and 1095-C, which include crucial details like the individual's name and tax identification number (TIN). The forms must be distributed to employees and individuals by March 3, 2025.

One notable change introduced by this act is the option to substitute an individual's date of birth for their TIN on these forms if the TIN is unavailable. The legislation also allows for the electronic delivery of these forms, provided the individual gives prior consent (with the ability to revoke consent at any time).

For large employers—those with 50 or more full-time employees—the act makes an important adjustment regarding IRS assessments. It mandates that these employers receive a minimum of 90 days to respond after being notified of a proposed penalty for failing to provide affordable coverage. Previously, employers were typically given only 30 days unless an extension was granted.

Additionally, the act extends the statute of limitations for assessing penalties related to failures in offering affordable MEC, giving the IRS up to six years to impose fines.

These changes aim to simplify compliance for businesses and enhance the clarity of tax reporting for employees, reducing unnecessary administrative burdens. For employers, especially large ones, this act may offer more time to address IRS inquiries and mitigate penalties for non-compliance. Understanding these adjustments is crucial for businesses striving to navigate the complexities of healthcare coverage and reporting.