Summary: On February 21, 2025, the Internal Revenue Service (IRS) released clarifying guidance in Notice 2025-15 regarding an “alternative manner” notice method of providing Affordable Care Act (ACA) reporting forms to covered individuals, including full-time employees (otherwise known as “Forms 1095-B and 1095-C”), for the 2024 calendar year reporting due in early 2025.
Read on for more information and employer considerations for the 2024 ACA reporting season.
ACA Reporting Background
The Affordable Care Act (ACA) created reporting requirements under Internal Revenue Code (Code) Sections 6055 and 6056.
- Section 6055 applies to providers of minimum essential coverage, such as employers with self-insured health plans (and health insurance carriers). These entities use Forms 1094-B and 1095-B to report information about the coverage they provided during the previous year.
- Section 6056 applies to applicable large employers (ALEs). ALEs use Forms 1094-C and 1095-C to report information relating to the health coverage that they offer (or do not offer) to their full-time employees.
These reporting requirements provide the IRS with information to administer the employer shared responsibility payment (ESRP or “pay-or-play”) rules, which impose penalties on applicable large employers (ALEs) that do not offer affordable, minimum value coverage to their full-time employees. It also provides information to help employees determine whether they are eligible for a premium tax credit for coverage purchased through an ACA Exchange (or Marketplace). Click here for a Risk Strategies article detailing the ACA pay-or-play penalties for 2025.
Applicable Large Employer (ALE):
An applicable large employer (ALE) is one with at least 50 full-time employees, including full-time equivalent employees, on average during the prior calendar year.
Full-time employee generally means an employee who averages 30 or more hours of service per week.
Related Employers
ALEs include all related employers within the same controlled group.*
Note: Although related employers are combined to determine ALE status, each entity is separately responsible for the ACA pay-or-play requirements. Penalties assessed on one entity do not apply to other entities in the controlled group.
*Controlled group definition under Internal Revenue Code §414 generally includes parent-subsidiary groups, brother-sister groups, nonprofit organizations under common control, trades, and businesses under common control.
ALEs with self-funded group health plans use a combined reporting method by filing Forms 1094-C and 1095-C (see table directly below).
Refer to the table below for a refresher summary of ACA reporting requirements:
|
Employer Size & Plan Type
|
Reporting Entity
|
IRS Transmittal Form
|
IRS Return
|
Individual Statement
|
|
ALE with fully insured group health plan (50 or more full-time employees)
|
Health insurance carrier
|
Form 1094-B
|
Form 1095-B
|
Form 1095-B
|
|
Employer
|
Form 1094-C
|
Form 1095-C
|
Form 1095-C
|
|
ALE with self-funded/level-funded group health plan (50 or more full-time employees)
|
Employer
|
Form 1094-C
|
Form 1095-C
|
Form 1095-C
|
|
Non-ALE with fully insured group health plan (1-49 full-time employees)
|
Health insurance carrier
|
Form 1094-B
|
Form 1095-B
|
Form 1095-B
|
|
Non-ALE with self-funded/level-funded group health plan health plan (1-49 full-time employees)
|
Employer
|
Form 1094-B
|
Form 1095-B
|
Form 1095-B
|
ACA Reporting Deadlines
The deadlines for 2024 ACA reporting are outlined in the table below:
|
Deadline
|
ACA Reporting Requirement
|
Employer Actions
|
|
March 3, 2025*
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Forms provided to full-time employees/other individuals (e.g., part-time employees, retirees, COBRA enrollees)
|
ALEs (and non-ALEs who offer self-funded/level-funded plans) must distribute Forms 1095 to employees by March 3, 2025.
|
|
March 31, 2025
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File Forms 1094 and Forms 1095 electronically** with the IRS
|
ALEs (and non-ALEs who offer self-funded/level-funded plans) must electronically file Forms 1095 and 1094 to the IRS by March 31, 2025.
|
* Although the 30-day extended deadline is typically March 2 of each year, the deadline for the 2024 calendar year is March 3, 2025, since March 2, 2025 falls on a Sunday.
** Employers must aggregate all tax information returns and are required to electronically file all tax information forms, including Forms 1095, if that number exceeds 10. Click here for a Risk Strategies article with more information.
Notice 2025-15 & Related Recent Federal Legislation
As we previously reported late last year here, federal legislation was enacted on December 23, 2024 providing Affordable Care Act (ACA) reporting-related relief for employers. One of the bills, titled The Paperwork Burden Reduction Act (H.R. 3797), provides that reporting entities, including ALEs, are no longer required to mail Forms 1095-B and 1095-C to covered individuals and full-time employees unless a form is requested.
H.R. 3797 formally codifies existing ACA reporting regulations from 2022, which provided this optional “alternative manner” notice method for Forms 1095-B, and extends this flexibility to Forms 1095-C provided to full-time employees of ALEs sponsoring group health plans.
NOTE: Prior to the enactment of H.R. 3797, an ALE sponsoring a self-funded group health plan was not permitted rely on this “alternative manner” notice method to provide Forms 1095-C to their full-time employees, since Form 1095-C also provides affordability and minimum-value information applicable to a full-time employee’s eligibility for a premium tax credit.
Notice 2025-15 provides the detailed guidance from the IRS that ALEs were waiting for with respect to the “alternative manner”[1] notice method referenced in H.R. 3797 for their 2024 Forms 1095-C and future ACA reporting forms.
This recent guidance confirms that the “alternative manner” notice method detailed in the existing ACA reporting regulations from 2022 can be relied upon by ALEs to provide Forms 1095-C to their full-time employees upon request[2]. Notably, the IRS does carve out an exception in Notice 2025-15 for ALEs to disregard the language in this regulation requiring that the individual mandate is set to $0 (as it is currently for 2025 and scheduled to expire at the end of 2025, absent Congressional action).
Alternative Manner Guidance in Notice 2025-15
The alternative manner notice method detailed in Notice 2025-15 allows ALEs to disregard the mailing requirement for Forms 1095-C and provide the Forms only upon request to a full-time employee as long as the following conditions are satisfied:
- An ALE posts a clear and conspicuous notice on its website by March 3, 2025, stating that full-time employees may receive a copy of their statement upon request.
- The location on the ALE’s website must be reasonably accessible to all employees.
- The notice must be written in plain, non-technical terms and in a font size large enough, including any visual clues or graphical figures, to signal to the reader that the information pertains to ACA reporting forms.
- The March 3, 2025 date is for 2024 ACA reporting forms. The deadline is typically March 2 each year.
- The notice must include:
- An email address;
- A physical address to which a request may be sent; and
- A telephone number to contact the ALE with questions along with informing employees how they may request a copy of their Form 1095-C.
- An ALE retains the notice in the same location on its website through October 15, 2025.
- If October 15 lands on a weekend or holiday in subsequent years, this notice retention deadline will be the next business day.
- When requested by a full-time employee, an ALE provides Form 1095-C within 30 days or by January 31 of the year following the applicable calendar year, whichever is later.
- Form 1095-C may be provided electronically if the full-time employee consents to electronic receipt[3].
Safe Harbor Example
ALEs may rely on the "safe harbor" example provided in the 2022 final regulations to satisfy this notice requirement by:
- Including a statement or link on the ALE’s main website page with the words “Tax Information” and
- If a link is provided on the main webpage (rather than a statement), it must link to a secondary webpage with the words "IMPORTANT HEALTH COVERAGE TAX DOCUMENTS" in capital letters.
- Including explanatory language on how full-time employees may request a copy of their Form 1095-C, as well its email address, mailing address, and telephone number.
Employer Considerations
Notice 2025-15 arrives as the 2024 ACA reporting season is wrapping up for many employers who have already completed their Forms 1095 distribution requirements by mailing them to employees ahead of the upcoming March 3, 2025 deadline. As such, the IRS guidance in Notice 2025-15 will likely be helpful next year for those ALEs interested in taking advantage of this optional “alternative manner” notice method for the 2025 reporting season in early 2026.
For those ALEs who have not yet distributed their Forms 1095-C to full-time employees and wish to rely on this optional “alternative manner” notice method for their 2024 Forms 1095-C, this recent IRS guidance will be very helpful for compliance efforts.
Reminder: This “alternative manner” notice method detailed in Notice 2025-15 is completely optional for ALEs (and other reporting entities).
ALEs are still permitted to rely on the mailing and electronic disclosure options (with employee consent) to provide Forms 1095-C to their full-time employees by March 3, 2025 for the 2024 ACA reporting season.
On a final note, employers with employees residing in certain states and localities (namely California, Massachusetts, New Jersey, Rhode Island, and Washington, D.C.) are required to continue complying with applicable state/local health coverage reporting requirements since Notice 2025-15 applies only to federal ACA reporting requirements. As of the date of this article publication, these jurisdictions have not yet released any guidance with respect to how the “alternative manner” notice method under federal ACA reporting requirements will impact applicable state/local reporting requirements.
Contact your Risk Strategies account team with any questions or contact us directly here.
[1] H.R. 3797 includes language stating that the IRS will provide guidance “at such time and in such manner” in connection with the “requirements of the alternative manner” notice method.
[2] In accordance with Treas. Reg. § 1.6055-1(g)(4)(ii)(B)(1)-(3).
[3] In accordance with Treas. Regulation § 301.6056-2.
