How SAP Organizations Can Manage the Paperwork Burden Reduction Act

SAP organizations are tasked with keeping up with the latest regulations to ensure compliance and avoid penalties. For HR organizations, one of the most important updates is the Paperwork Burden Reduction Act (PBRA).  The new law dictates that “certain health insurance providers and employers to provide 1095-B tax forms to individuals only upon request.” The rule also extends to 1095-C tax forms for larger employers.

The PBRA is ultimately designed to simplify the operations of HR teams, reducing the effort and cost associated with producing paperwork for every employee. While this sounds like a positive development, it also comes with some potential complicating factors.

Understanding PBRA Requirements

To help organizations better understand their requirements and options associated with the PBRA, the HR experts at PlanSource issued some guidance to help manage the new law.

One key issue PlanSource highlighted is that the rule lacks specific guidelines on how exactly organizations should execute this new law. For instance, it dictates only that employees must be informed of this new law and must supply the requested form by January 31 or 30 days after the request — whichever of the two is later. Yet it does not dictate what type of notice required, nor does it spell out when the notice should be given.

The process is further complicated by the fact that certain states and territories with individual health insurance mandates may still force companies to offer the paper form. While this may be seen as inconvenient and confusing, the risk of non-compliance could be penalties from the IRS, which would be even more disruptive to an organization.

Expert Recommendations

Given the confusion around the PBRA, PlanSource says that “the safest course of action for employers is to continue providing paper forms for the 2024 reporting year. This approach ensures compliance and minimizes administrative burden until more specific requirements are released.”

It also says that continuing to provide paper forms gives companies another change to collaborate with their ACA compliance partner about how best to go about providing employees with their full range of options.

What This Means for SAPinsiders

Remain vigilant to remain compliant. There are constant updates like the PBRA that organizations must keep track of in order to be compliant. Companies may be unable to track all of these changes themselves. Many are turning to partners like PlanSource to ensure that they maintain ACA compliant.

Err on the side of caution. While many SAP organizations are committed to digitalization and removing manual paperwork, they may be wise to continue providing paper options. With the confusion around the PBRA, it is likely more straightforward to continue with paper options than risk being non-compliant.

You don’t have to go it alone. The PBRA is just one of many regulatory and compliance hurdles that companies need to clear. Some vague and confusing language can cause concern, as individuals may not know how to best accommodate new rules. Companies with these concerns should find trusted partners like PlanSource that can offer assistance and expert recommendations to remain compliant and avoid penalties.