ACA Reporting

As employers close out another year and prepare to adjust for another year of regulatory updates, we are reminded of some items that loom large for this year and next: Changes to this year’s Affordable Care Act (ACA) reporting requirements and a new Form W-2 for next year. Below is a closer look at the changes and what your organization can do to stay ahead of the regulatory curve. Changes to ACA and 1095-C Requirements Late 2024, Congress passed an act designed to allow applicable large employers some flexibility in how they furnish forms 1095-C to their employees. Employers are no longer required to automatically send 1095-C forms to all full-time employees. Employers wishing to take advantage of the new process must instead follow the specific alternative notice methodology enacted under the 2024 laws. Essentially, employers are considered compliant if they have posted a “clear, conspicuous and accessible” notice on their benefits website informing employees that they may request a copy of the form and how they may do so. If such a copy is requested, the employer must provide the copy by either January 31 or within 30 days of the request, whichever is later. The deadline for furnishing the 1095-C or posting the notice as to how to obtain the form is March 2, 2026. Employers opting for the alternative methodology must post the “how-to” notice by that time and leave it posted through October 15, 2026. It is important to note that employers wishing to use the alternative furnishment methodology ensure they adhere to the guidance provided in IRS Notice 2025-15, which states that employers wishing to provide the requested form in electronic format, first obtain electronic consent from the employee, much as they would prior to providing an electronic W-2. New Form W-2 for 2026 In addition to changes to ACA reporting, the IRS recently released a draft Form W-2 for Tax Year 2026. The new form, which has already been edited three times, introduces new codes for Box 12, and a new box 14b to account for items introduced in the One Big Beautiful Act. The new codes are TA, for newly created “Trump Accounts”, TP, for reporting qualified tips, and TT, for reporting qualified overtime.While no changes were made to the W-2 for this tax year, employers can take some solace in the IRS announcement that no penalties will be levied regarding OBBA reporting for the current tax year. Compliance minded employers should review these items and adjust their processes accordingly. At a minimum, preparation should include a) updating employee communications regarding requesting Form 1095-C, b) coordinating with payroll providers/vendors to prepare for 2026 W-2 changes, and c) ensure they are monitoring the IRS website for any changes or updates.

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