IRS Extends 2020 ACA Reporting Deadline

The IRS has extended the deadline from January 31, 2021, to March 2, 2021, for providing certain health care information statements to individuals as required under the Affordable Care Act (ACA). 

IRS Notice 2020-76 only extends the deadline for providing Forms 1095-B and 1095-C for 2020 to individuals. It does not extend the deadline for filing Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS. Those forms must be filed with the IRS by March 1, 2021 — or by March 31, 2021, if filed electronically.

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 by employers with 50 or more full-time or equivalent employees, known as applicable large employers (ALEs) and furnished to any individual who is a full-time employee for one or more months of the calendar year. Employers must report that information for all 12 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. The IRS uses this information to enforce the employer mandate. It is also used when determining premium subsidy eligibility in the ACA marketplace. 

Relief for “Good Faith” Effort

Notice 2020-76 provides “good faith” relief for employers that report incorrect or incomplete information, but it also states that 2020 will be the last year the IRS will provide this type of relief. To demonstrate good faith, an employer must show that it made a reasonable effort to comply with the filing requirements. Examples of a “reasonable effort” include gathering and transmitting necessary data to an agent to prepare for data submission or testing its ability to transmit information to the IRS.

Notice 2020-76 also provides relief for failing to provide a Form 1095-B to an individual in cases where these two conditions are met:

  1. The reporting entity must post a notice prominently on its website, stating that responsible individuals may receive a copy of their 2020 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that individuals can use to contact the reporting entity with any questions. 
  2. The reporting entity must furnish a 2020 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received.

ACA Penalties

The penalties for failing to timely provide a Form 1095-B or a Form 1095-C can be substantial. The IRS can impose a penalty of up to $280 per return for failing to timely provide a Form 1095-C or 1095-B to an individual, and an additional $280 per return for failing to provide a Form 1094-C, 1095-C or 1095-B to the IRS. These penalties also apply for providing an inaccurate form to an individual or the IRS.

The experienced, responsive team of ERISA attorneys at Hall Benefits Law helps plan administrators understand what regulations and rulings are relevant and how best to apply these rulings in practice. Learn more by calling 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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