The IRS Releases New 1095 Draft Instructions for 2024

Not too long ago, during the summer, the IRS released drafts of the 1095 forms for 2024. They are now following this up with newly drafted instructions for 2024 as well. 

While these are not the finalized instructions that employers will use in 2024 when completing their Affordable Care Act (ACA) reporting for the 2023 tax year, they give great insight into any updates that employers can expect. 

The IRS generally finalizes these drafts as their deadlines approach, so we can likely expect this in the coming months. In the meantime, here is an overview of the drafted instructions and any potential updates that may affect your organization’s ACA reporting process in the new year. 

Form 1095-B vs. 1095-C: What’s the Difference? 

Before we dive into the new drafts, let’s first take a look at the differences between the forms 1095-B and 1095-C. Determining which form your organization is required to file will determine which set of draft instructions will apply to you. 

Form 1095-B is often used by health insurance providers to provide the IRS with detailed information about the coverage they offer and the individuals who were enrolled in this coverage for the tax year. This form is also required to be filed by employers that offer their eligible employees self-funded/self-insured health insurance. 

Form 1095-C is designed specifically for Applicable Large Employers. The IRS defines Applicable Large Employers (ALE)  as any employer with 50 full-time or full-time equivalent employees. These employers are required by law to provide their eligible employees with health insurance coverage that meets the minimum essential coverage (MEC) requirements as well as the affordability requirements laid out under the Affordable Care Act (ACA). 

What’s New in the 1095-B/1095-C Drafts for 2024? 

If you have been completing your organization’s ACA reporting process for previous tax years, we have good news – there are not any major changes to the process of completing Forms 1095-B or 1095-C. The only major change from the IRS for the upcoming reporting season is how you file these forms. 

So, what does that mean? It means that the IRS has made some major changes to the IRS e-filing thresholds that will go into effect when the 2024 calendar year begins. 

What is the New E-filing Threshold for 2024? 

In the past – meaning the 2023 calendar year and earlier- businesses were permitted to file up to 250 paper forms with the IRS. This was a collective number, meaning a business could file up to 249 paper W-2 returns, as well as 249 paper 1095 returns without penalty. This is no longer the case. 

Effective on January 1, 2024, businesses are only permitted to file up to 10 paper copies of information returns. This is a pretty dramatic decrease, especially considering that this is no longer a collective number of forms. For example, if a business files 9 W-2s, it must e-file all other information returns for the rest of the calendar year, regardless of the form type. 

Bridging the Gap – How ACAwise Helps Businesses Adapt!

ACAwise has been helping businesses meet and maintain their ACA compliance with the IRS since Affordable Care Act reporting was first enacted. Our team of experts is able to assist with the intricacies that come with filing forms 1095 with the IRS, required states, and distributing copies to employees and recipients.  

Given the drastic changes to e-filing requirements, we can help your business not only adapt but streamline your reporting process!

Choose ACA Core for simplified ACA reporting 1095 generation and e-filing. Our team will generate your information based on the information you provide (complete with ACA 1095-C Codes). 

Choose ACA Elite for a complete solution for 1095 filing, with the Elite service, our team generates your Forms 1095 and generates the required codes on Form 1095-C. 

Both the ACA Core and ACA Elite options allow you to upload your data conveniently,  and add additional services, such as TIN Matching,  Postal Mailing for recipient copies, online access to recipient copies, and state e-filing.

Interested in learning more about what ACAwise has to offer your business? Reach out today to talk to our team about your filing needs and lock in your spot for tax year 2023 reporting!