As a special holiday treat last December, two bills were signed into law: the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act. These new laws will help ease the burden of Affordable Care Act (“ACA”) reporting and give employers more time to respond to proposed penalty assessments under the Internal Revenue Code Section 4980H Employer Shared Responsibility rules.
Alternative method allowed for distributing Forms 1095-C to full-time employees.
Employers with 50 or more full-time employees (including full-time equivalents) in the prior year (“ALEs”) are required to file Forms 1095-C with the Internal Revenue Service (“IRS”) and distribute these same forms to their full-time employees. These forms provide information on the medical plan coverage that was offered to the employee. Under the Paperwork Burden Reduction Act provisions, ALEs are no longer required to automatically mail Forms 1095-C to employees. Instead, an ALE may provide a “clear, conspicuous, and accessible” notice explaining that Forms 1095-C are available upon request (i.e., the “Notice of Availability”). If an individual requests a copy of their Form 1095-C, the ALE must furnish a copy of the statement on or before January 31st of the year following the calendar year for which the return was required to be made, or 30 days after the date of the individual’s request (whichever is later).
Content of Notice. We currently do not have guidance regarding what content is required in the Notice of Availability. However, it is worth noting that the IRS has issued guidance regarding “alternative methods of furnishing” the ACA Form 1095-B returns (i.e., the ACA returns used by insurance carriers, etc.), and it can be reasonably anticipated it will issue similar guidance with respect to Forms 1095-C. Under the ACA Form 1095-B rules, a participant’s statement is considered properly furnished if it meets requirements such as those listed below.
Deadline for posting Notice of Availability. Generally, the deadline for distributing Forms 1095-C is January 31st of the year following the year in which plan coverage was provided (e.g., January 31, 2025 for 2024 statements). However, the IRS has issued guidance providing for an automatic 30-day extension of time to distribute the Forms 1095-C. In particular, the 2025 Instructions for Filing Forms 1095-C state that “the due date for furnishing Forms 1095-C is automatically extended from January 31, 2025 to March 3, 2025.” It’s not clear whether this 30 day extension also applies to the period of time to provide the Notice of Availability, and/or the deadline for responding to requests for the Form 1095-C. We hope to have more guidance from the IRS on this issue in the near future.
Forms 1094-C and 1095-C must be filed with the IRS. It’s important to note that even though these new rules simplify the Form 1095-C employee distribution requirements, ALEs are still required to file Forms 1094-C and 1095-C with the IRS. For calendar year 2024, Forms 1094-C and 1095-C are required to be filed with the IRS by February 28, 2025, or March 31, 2025 (if filing electronically).
State reporting requirements still apply. Although the Paperwork Burden Reduction Act simplifies the Form 1095-C distribution process at the federal level, this Act does not change the distribution requirements for states with individual health insurance mandates (e.g., California, New Jersey, Rhode Island, etc.) Accordingly, employers should carefully review any applicable state reporting distribution rules to see whether paper distribution is still required in those states.
Note: In California, employers offering medical plan coverage must generally report individual enrollment information to the California Franchise Tax Board (“FTB”), and distribute the Forms 1095-C by January 31, 2025, for California purposes. However, the California rules provide that “if you have already furnished the federal Form 1095-C to an individual for federal purposes, it is not necessary to provide an additional copy to that individual for California purposes.” Now that the federal rules allow an ALE to count posting the “Notice of Availability” as a method of properly “furnishing the Forms 1095-C to employees,” it seems reasonable to take the stance that if an employer provides the Notice of Availability to its employees, it will have satisfied both the federal and California state furnishing requirements (i.e., it is not necessary to separately mail out the Forms 1095-C to California employees).
Form 1095-C TIN requirement simplified.
ALEs are required to report employee and dependent (if applicable) social security numbers/tax identification numbers (TINs) on the Form 1095-C. The Employer Reporting Improvement Act simplifies this requirement by providing that if an ALE is unable to collect such TINs, the individual’s date of birth may be reported instead. This new rule applies to Forms 1095-C due after December 31, 2024 (e.g., 2024 Forms due in 2025).
Note: The current TIN solicitation rules generally require that an ALE request the TIN three times. It’s not clear under the new rules whether an ALE is still required to solicit the TIN three times before reporting the individual’s date of birth. More guidance on this issue would be helpful.
Electronic distribution of Forms 1095-C allowed with consent.
Under current rules, an ALE may distribute Forms 1095-C electronically (e.g., by email or by informing the individual how to access the Form 1095-C on the ALE’s website). However, an ALE must obtain the individual’s prior consent before distributing the Forms 1095-C electronically. The Electronic Reporting Improvement Act clarifies that if an individual has affirmatively consented to receiving their Form 1095-C electronically at any prior time, the ALE can rely on this prior consent unless the individual affirmatively revokes such consent (e.g., the ALE does not need to obtain new consents annually). This rule applies to Forms 1095-C due after December 31, 2024 (i.e., 2024 Forms 1095-C due in 2025).
Extension of time to respond to IRS Letters 226J.
If the IRS has determined that an ALE owes Employer Shared Responsibility penalties (i.e., the penalties an ALE may be subject to if they do not offer affordable, minimum value medical plan coverage to their full-time employees), it will send the ALE a Letter 226J which outlines proposed penalties. If the ALE disagrees with the proposed assessment, it may appeal. The Employer Reporting Improvement Act extends the amount of time that an ALE has to respond to the Letter 226J. Under the new rules, an ALE has at least 90 days from the date of the Letter 226J to respond to the proposed assessment.
Note: ALEs previously had only 30 days to respond to a Letter 226J. Having additional time to analyze the proposed assessment, gather relevant documents, coordinate with ACA reporting vendors, and respond to the IRS is welcome news.
Six-Year Statute of Limitations on Employer Share Responsibility Penalty Assessment.
The Employer Reporting Improvement Act clarifies that there is a 6-year statute of limitations for ACA employer shared responsibility penalty assessments. Effective for returns due after December 31, 2024, the period of assessment will expire at the end of the 6-year period beginning on the due date for filing the associated Forms 1094-C and 1095-C.
Note: The IRS previously took the stance that no statute of limitations applied to these penalty assessments. Accordingly, this clarification is welcome news for ALEs. Further, this clarification will assist ALEs in determining the appropriate period of time for retaining documents related to potential employer shared responsibility assessments (e.g., documents demonstrating that the ALE offered affordable, minimum value coverage to its full-time employees).
If you have questions about these new rules, please contact us.
On May 28, 2025, the U.S. Department of Labor Employee Benefits Security Administration (EBSA) released its first compliance assistance bulletin under the new presidential administration, Compliance Assistance Release No. 2025-01 (the “New Guidance”), announcing and memorializing EBSA’s revocation of its 2022 guidance cautioning against 401(k) plan investments in cryptocurrencies (Compliance Assistance Release No. 2022-01 (the “Prior Guidance”).
The Prior Guidance was issued by EBSA during the last presidential administration in response to a growing number of firms marketing cryptocurrencies as potential 401(k) plan investment options. Citing concerns that cryptocurrencies may have volatile returns, are subject to an evolving regulatory environment, present unique challenges for participants in making informed investment decisions, and have unique custodial, recordkeeping and valuation concerns, EBSA cautioned plan fiduciaries to exercise “extreme care” before considering adding a cryptocurrency to a 401(k) plan investment menu. Notably, in light of EBSA’s concerns, the Prior Guidance warned plan fiduciaries that EBSA expected to conduct an investigative program aimed at plans offering participant investments in cryptocurrencies and related products. More specifically, EBSA informed 401(k) plan investment fiduciaries permitting cryptocurrency investments that they “should expect to be questioned about how they can square their actions with their duties of prudence and loyalty in light of the [associated] risks . . .” This resulted in an immediate and significant chilling effect on pursuing cryptocurrency offerings in 401(k) Plans.
It comes as little surprise that the new presidential administration is a proponent of cryptocurrency, with Vice President Vance announcing the same day as the release of the New Guidance that “crypto finally has a champion and an ally in the White House… crypto and digital assets… are part of the mainstream economy, and are here to stay.” But what does the New Guidance mean for plan fiduciaries and the prudent analysis they must undertake in considering whether cryptocurrencies are an appropriate 401(k) plan investment options?
The New Guidance focuses on the reference to “extreme care” in the Prior Guidance as a rationale for its revocation, stating that “extreme care” is not a standard found in ERISA, and differs from ordinary fiduciary principles thereunder. Under ERISA, the fiduciary principles describing standards of care are the duties of loyalty and prudence. Specifically, ERISA’s duty of loyalty provides that fiduciaries must act solely in the interest of plan participants and beneficiaries with the exclusive purpose of providing benefits and defraying reasonable plan expenses, and the duty of prudence provides that fiduciaries are to carry out their duties with the care, skill, prudence, and diligence that a prudent person familiar with such matters would use (described by the courts as an expert standard).
The New Guidance emphasizes that the Prior Guidance deviated from EBSA’s “historic neutral approach to investment types and strategies” (e.g., imposing a uniform standard of care for different investments), and that revocation of the Prior Guidance “restores [EBSA’s] historical approach by neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate.”
For a responsible 401(k) plan fiduciary, the revocation of the Prior Guidance does not give the green light to add cryptocurrency as an investment option; rather, it simply places cryptocurrency on a level playing field with any other potential investment option. In other words, it removes EBSA’s prior heightened scrutiny of cryptocurrency as a 401(k) plan investment option. This means a potential cryptocurrency investment should be reviewed and vetted by plan fiduciaries in the same manner as any other investment, by conducting a prudent process and adhering to the duty of loyalty. Such process may include analyzing and documenting whether the investment option:
In issuing the New Guidance, EBSA did not dismiss the concerns listed in the Prior Compliance release regarding returns, regulatory development, participant comprehension, and unique custodial, recordkeeping and valuation considerations, which will still present challenges when evaluating cryptocurrencies in the same way as other investment options. However, EBSA was clear that it no longer “disapproves” of cryptocurrency as an investment consideration, and a plan fiduciary’s decision should consider all relevant facts and circumstances and will “necessarily be context specific” (referencing Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 425 (2014)). In other words, the appropriateness of cryptocurrency as an investment should focus on the specific needs of the plan, the unique characteristics of the population, and the reasonableness of the fiduciaries’ judgment.
In light of these changes, those in charge of plan administration must carefully review the applicable disclosure obligations and work closely with the plan actuary and legal counsel to ensure accurate and timely compliance. Plan fiduciaries that wish to consider cryptocurrency as a potential 401(k) plan investment option should work with their investment advisor to evaluate whether such an investment option is appropriate for their plan, taking into account the relevant facts and circumstances for their plan population, and analyzing the various considerations solely in the interest of plan participants in a prudent manner with a well-documented demonstration of their decision-making process. This should include a process to appropriately monitor the cryptocurrency investment, understand and evaluate the reasonableness of its fees, and assess whether sufficient education on the investment can be provided to the participant population.
If you have questions about the New Guidance, please contact us.
The Prior Guidance was issued by EBSA during the last.
Since its founding in 1980, Trucker Huss has built its reputation on providing accurate, responsive and personal service. The Firm has grown in part through referrals from our many satisfied clients, including other law firms with which we often partner on a strategic basis to solve client challenges.
The Trucker Huss Benefits Report is published monthly to provide our clients and friends with information on recent legal developments and other current issues in employee benefits. Back issues of the Benefits Report are posted on the Trucker Huss website (www.truckerhuss.com)
Editor: Nicholas J. White, nwhite@truckerhuss.com
In response to IRS rules of practice, we inform you that any federal tax information contained in this writing cannot be used for the purpose of avoiding tax-related penalties or promoting, marketing or recommending to another party any tax-related matters in this Benefits Report.
135 Main Street, 9th Floor
San Francisco, California 94105-1815
15760 Ventura Blvd, Suite 910
Los Angeles, California 91436-3019
329 NE Couch St., Suite 200
Portland, Oregon 97232-1332
Tel: (415) 788-3111
Fax: (415) 421-2017
Email: info@truckerhuss.com
Website: www.truckerhuss.com
Copyright © 2026 Trucker Huss. All rights reserved. This newsletter is published as an information source for our clients and colleagues. The articles are current as of the date of publication, are general in nature and are not the substitute for legal advice or opinion in a particular case.
135 Main Street, 9th Floor
San Francisco, CA 94105-1815
15760 Ventura Boulevard, Suite 910
Los Angeles, CA 91436-2964
329 NE Couch Street, Suite 200
Portland, OR 97232-1332
