The Affordable Care Act ("ACA") imposes various reporting requirements on insurers, self-insuring employers, and other providers of "minimum essential coverage" and imposes penalties on coverage providers that do not comply. The IRS recently issued Notice 2016-4, which grants extensions of certain important reporting deadlines.1 These deadline extensions are intended to ease the transition under ACA so that employers and others have additional time to adapt and implement systems and procedures to gather, analyze and report the relevant information. These extensions apply to the requirements both to furnish information to individuals and to file information with the IRS.
Specifically, Notice 2016-4 does the following:
- Extends the due date from February 1, 2016 to March 31, 2016
for furnishing the following forms to individuals:
- The 2015 Form 1095-B, Health Coverage, and
- The 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage; and
- Extends the due date from February 29, 2016 to May 31, 2016 (if
not filing electronically), and from March 31, 2016 to June 30,
2016 (if filing electronically), for filing the following forms
with the IRS:
- The 2015 Form 1094-B, Transmittal of Health Coverage Information Returns,
- The 2015 Form 1095-B, Health Coverage,
- The 2015 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and
- The 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.
Employers with 50 or more full-time employees (or members of groups of employers with 50 or more full-time employees, in the aggregate) are subject to the "shared responsibility" mandates of the ACA. These entities must furnish and file Form 1095-C (and must file Form 1094-C for transmittal of Form 1095-C to the IRS). Insurers and self-insured employers that are not subject to the employer "shared responsibility" mandate must furnish and file Form 1095-B (and must file Form 1094-B for transmittal of Form 1095-B to the IRS).
The Notice also provides that the IRS is prepared to accept the forms as early as January 2016 and encourages employers and other coverage providers to furnish statements and file information returns as soon as they are able. The IRS will not impose penalties on reporting entities that can show they have made good-faith efforts to comply with the requirements, but only in situations where the reporting entity has furnished or filed incorrect or incomplete information, rather than having failed to timely furnish or file any statement or return at all. However, the Notice provides that penalties may be waived if the reporting entity demonstrates its failure to timely furnish or file a statement or return was due to significant mitigating factors or events beyond the reporting entity's control, and that the entity acted responsibly.
Finally, Notice 2016-4 provides guidance to individuals who, due to these extended deadlines, might not receive a Form 1095-B or Form 1095-C by the time they file their 2015 tax returns. For 2015 only, individuals who rely upon other information received from employers about their offers of coverage for purposes of filing their income tax returns need not amend their returns once they receive their Forms 1095-B or 1095-C. Employers subject to these reporting requirements may want to review their procedures to ensure that they are in line with the Notice, but in general, the Notice will likely provide welcome relief to employers trying to comply with the requirements.
Footnote
1 For a complete discussion of what ACA has in store for employers in 2016,seeIlyse W. Schuman, Russell D. Chapman and Steven J. Friedman, ACA Outlook: What Will 2016 Hold for the Affordable Care Act and Employers?, Littler Insight (Dec. 31, 2015).
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