Pursuant to the December IRS Notice 2019-63 (the “Notice”), the deadline for providing forms 1095-C and 1095-B to covered individuals has been extended from the end of January until March 2, 2020. These forms must also be filed electronically with the IRS by March 31, 2020. These forms are part of the Affordable Care Act’s (ACA) reporting requirements.
Employer Shared Responsibility
Under IRS Code Section 4980H, employers are required to offer health insurance coverage to employees if their business is an applicable large employer (ALE) (i.e., generally any business with 50 full-time employees and full-time equivalents, as defined under the ACA). Pursuant to Code Section 6056, these ALEs must report the offering of health insurance coverage. Form 1095-B is used for reporting certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment. Form 1095-C is filed with the IRS and furnished to any employee of an ALE who is a full-time employee for one or more months of the calendar. ALEs members must report that information for all twelve months of the calendar year for each employee. These two forms must be furnished, as appropriate, to individuals for their coverage in the prior calendar year, as well as to the IRS.
Even with the repeal of the individual mandate, 1095-B reporting is still required. This information is used by the IRS to enforce the employer mandate. It is also used when determining premium subsidy eligibility in the ACA marketplace. The IRS understands that employers and insurers may need additional time to comply with the ACA’s reporting requirements and extended the deadline. The IRS has the right to extend the deadline by thirty days each year but not beyond that point.
Penalty Relief
The Notice that extended filing deadlines also outlined relief for companies for penalties otherwise imposed for failure to timely furnish and file complete and correct Forms 1095-B and 1095-C. While the IRS may require these forms for tax purposes, individuals no longer need these forms to determine whether they are liable for the individual mandate penalty. Providers that fail to automatically furnish Forms 1095-B to individuals will not be assessed penalties so long as a Form 1095-B is furnished within 30 days after an individual’s request. Reporting entities must prominently post a notice on their website with information about requesting Form 1095-B. Relief also applies to ALEs that fail to automatically furnish Forms 1095-C to employees who were not full-time for any month in 2019, so long as the form is furnished on request and the website notice is provided.
Penalty relief is not available to entities that:
- Fail to furnish statements or file returns;
- Miss an applicable deadline; or
- Are otherwise not making good faith efforts to comply with applicable ACA reporting requirements.
Evidence of good faith efforts may include gathering necessary data and transmitting it to a third party to prepare the required reports and testing the ability to transmit data to the IRS. ALEs that fail to automatically furnish Forms 1095-C to employees who were not full-time for any month in 2019 are extended relief as long as the form is furnished on request and the website notice is provided.
Employers should continue their efforts to streamline compliance with ACA reporting requirements as there is no guarantee that the IRS will extend the deadline in future years. While the IRS will currently consider whether a business made a good faith effort to comply with meeting the furnishing and filing deadlines for previous years, companies should look at how they are gathering data and what their timelines are to be able to provide the information in a prompt fashion in the future.
Putting in place the processes and procedures necessary for legal and regulatory compliance is an important part of how the attorneys at Hall Benefits Law help our national client base. We understand what information is needed and work with business owners and HR teams to ensure compliance processes are up to date. To learn more, call our Georgia-based team today at 678-439-6236 or visit the Hall Benefits Law website.
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