HB Counsel Client Alert: “IRS Announces Extension for Distributing Forms 1095-C and 1095-B”
As a brief reminder, the Affordable Care Act (“ACA”) requires that applicable large employers (“ALEs”) complete information reporting to both employees and participants in employee benefits plans, as well as to the IRS regarding health care coverage, if any, they offered to full-time employees. This reporting must be completed annually, with the reporting to employees and plan participants scheduled a little over a month away. This alert provides notice of extensions issued by the IRS regarding ALE information reporting requirements.
Automatic Extension for Employer and Participant Reporting
On December 2, 2019, the IRS announced it is extending the deadline for employers and insurers to distribute 2019 Forms 1095-C and 1095-B to employees and plan participants once again. The original deadline of January 31, 2019 has been extended 31 days out to March 2, 2020. The IRS has indicated that because it has automatically extended the deadline to distribute, it will not grant any requests for further extension.
No Automatic Extension for Reporting to IRS
While the deadline to furnish forms to employees has been extended, the deadline to file Forms 1094-C and 1095-C has not.
|The deadlines for filing 2019 Forms 1094-C and 1095-C with the IRS remain:
For Electronic filings, the deadline is March 31, 2020.
For Paper filings, the deadline is February 28, 2020.
Note: Paper filings are only permitted for entities filing 250 or fewer Forms 1095-C.
A 30-day extension of the filing deadline may be obtained by filing IRS Form 8809 before the original due date.
Automatic Extension of Goof Faith Transition Relief
The IRS has also extended the good faith transition relief for an additional year. This means that the IRS may grant relief from certain penalties for incorrect or incomplete information on Form 1095-C, as long as the employer makes a good faith effort to comply, and timely files the forms. In determining whether or not the employer showed a good faith effort, the IRS considers whether the employer made reasonable efforts to gather and transmit data for submission to the IRS in order to meet their reporting obligations.
New Relief Due to $0 Individual Mandate in 2019
In addition, there is a new type of transition relief this year. The Tax Cuts and Jobs Act of 2017 zeroed out the individual mandate penalty as of January 1, 2019. However, the related reporting requirement remained intact. Since there is no individual penalty for not having minimum essential coverage (“MEC”), individuals will not need Form 1095 in order to file their taxes or calculate their penalty.
As a result, the IRS is permitting insurance carriers and small employers (those with fewer than 50 full-time employees) who sponsor self-insured plans to “skip” sending Form 1095-Bs to individuals who were not considered full-time employees. In order to take part in this new relief, certain conditions apply:
- The individual was not classified as full-time for any month in 2019;
- The reporting entity must prominently post a notice on its website that includes:
- A statement that the individual may receive a copy of his/her 2019 Form 1095-B upon request;
- An email address where the individual can send a written request to;
- A street address where the individual can mail a written request to; and
- A telephone number where the individual can call with any questions.
- Upon request, the reporting entity must furnish the Form 1095-B within 30 days.
ALEs, those with 50 or more full-time employees, are still required to furnish Form 1095-C to full-time employees, as well as submit those statements to the IRS. The IRS uses this information to determine whether the ALE met their obligations, or if an employer-shared responsibility payment should be assessed.
However, a self-insured plan that covers part-time employees or COBRA enrollees would be extended relief for failure to furnish Form 1095-C to any enrollees in the plan who were not a full-time employee for any month in 2019.
State Reporting Requirements May Apply
Employers with employees residing in California, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington, DC should review reporting requirements under individual coverage mandates in those states.
The content herein is provided for educational and informational purposes only and does not contain legal or tax advice. Please contact our office if you have any questions regarding ACA employer mandate reporting requirements that may apply to your employee benefit plans.
Dated: December 12, 2019