Paperwork Reduction Act - Information and Sample Notice to Employees

Paperwork Reduction Act - Information and Sample Notice to Employees

 

 

Paperwork Reduction Act – Information for Clients 


The Paperwork Reduction Act amends the Internal Revenue Code, which obliges employers to prepare and furnish Forms 1095-C/1095-B to employees. Employers are no longer required to mail forms to employees if they meet certain requirements. 

Employers can instead opt to provide these forms only upon employee request, provided they meet certain conditions: 
  1. Employee notification: Employers must provide clear, conspicuous, and accessible notice to employees, informing them of their right to request Form 1095-C.  
  2. The new guidance dictates that this must remain on the company website until Oct. 15, 2028.  
  3. Timely furnishing upon request: Upon receiving a request, employers must furnish the employees Form 1095-C by the later of: 
  4. January 31 of the year following the calendar year in which coverage was provided, or 30 days after the date of the request, whichever is later. 

Failure to comply with these employee notification requirements can trigger penalties under the Internal Revenue Code, which govern failures to file or furnish information returns correctly. 

For 2026, the failure to Furnish (Provide to Employee): $330 per return for not furnishing a correct Form 1095-C to the employee by the deadline. 

Key risks for employers include the following: 

  1. Employee complaints or confusion, especially during tax filing season. 
  2. IRS inquiries or audits triggered by non-compliance with notification timelines. 
  3. Loss of eligibility to furnish forms electronically if consent and communication rules are not followed. 

To remain compliant with the new guidance, employers should: 

  1. Review of Your Electronic Furnishing Process 
  2. Confirm that your organization has properly obtained consent from employees to receive Form 1095 electronically 
  3. Ensure your Employer’s intranet or employee portal includes a clear and accessible notification that: 
  1. Describes the employee’s right to request a paper copy of Form 1095 
  2. Explains how to request the form 
  3. Stays visible on the site through Oct. 15, 2028 
  1. Coordinate with your HR, payroll, and legal teams to document this process and verify that all ACA compliance communication materials align with the latest IRS rules. 

  Challenges and Considerations for Employers  

While the new 1095 furnishing rule seems simple in theory, it could introduce significant compliance challenges. Thus, employers should be aware of a few complications that could arise:  
  1. Tracking issues: If employees request their 1095 form, how will you keep track of those instances? Without a formalized furnishing process in place, you risk data inconsistencies over time.  
  2. The burden of proof falls on the employer to establish compliance for seven years after a form has been furnished. Note that ACA Track retains 1095 and 1094 filings for 3 years. 
  3. State ACA Requirements: If an employee lives in or moves to a state with its own ACA requirements and never received a 1095 form during a specific tax year, you could be out of compliance with that state’s furnishing requirements. All states require that 1095 forms be furnished to employees, but these forms can be electronically provided except for the state of New Jersey. New Jersey requires that 1095 forms be furnished via USPS mailing. It is ACA Track’s recommendation that employers utilize printing and mailing services for all employees residing in states that require state reporting to ensure compliance with furnishment requirements. 
  4. Employee turnover: If you utilize the “upon request” method, it becomes more difficult to track and manage when 1095 forms were furnished and to whom, which becomes an unnecessary compliance risk over time. Further, employees who terminated prior to notice postings must receive a paper copy of their 1095 form. 

   

Paperwork Reduction Act - Sample Notice to Employees 


Warning
DISCLAIMER: This sample notice is provided for general informational purposes only and should not be construed as legal, tax, or compliance advice. It is the responsibility of each employer to ensure that any notice provided to employees meets all applicable federal, state, and local requirements. Employers should consult with their legal or tax advisors to ensure compliance. This sample is for reference only and should be customized to reflect your organization’s specific procedures and contact information. 


Important Notice About Form 1095 Availability 
​

Under amendments to the Paperwork Reduction Act effective December 2024, employers are no longer required to automatically mail IRS Form 1095 to employees unless specifically requested. 

​

What is Form 1095? 

Form 1095 provides information about the health insurance coverage offered to you by your employer and may assist you in preparing your federal and/or state tax return. 

​

How to Request a Paper Copy: 

If you would like to receive a paper copy of your Form 1095 for the 20[XX] tax year, you must submit a request using one of the following methods: 

  • Email: [insert contact email] 
  • Phone: [insert phone number] 
  • Mail: [insert office name and mailing address] 

Requests must include your full name, employee ID (or last four digits of your SSN), and a valid mailing address. 

 

There is no charge for requesting a copy. Requested forms will be mailed within 30 days of receipt. 

 

If you have any questions about this notice or Form 1095-C, please contact [insert contact information]. 

 

 

 

 

This document is designed to highlight ACA Reporting matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. 

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