22 November 2016

Happy Thanksgiving from the IRS: ACA Reporting Delayed Again!

Many of us will gather with friends and family this week to celebrate Thanksgiving. For those individuals who are responsible for making sure your organization timely completes its ACA reporting, the IRS gave you additional things to be thankful for:

  • The deadline to furnish Forms 1095-C and 1095-B to individuals was extended 30 days from January 31, 2017 to March 2, 2017; and
  • The IRS renewed the “good-faith” compliance relief for reporting penalties.

Deadline Extension
Applicable large employers that are subject to the pay or play penalty (generally, those with 50 or more full-time employees including full-time equivalent employees) must report certain information to full-time employees and to the IRS. Additionally, employers that sponsor self-funded group health plans must report certain information to enrolled employees (and beneficiaries) and the IRS.

These reporting obligations are generally satisfied using Form 1095-C for applicable large employers, regardless of whether the employer’s group health plan is self-funded or fully insured. (However, for non-applicable large employers that sponsor self-funded group health plans, Form 1095-B is used)

Forms 1095-C and 1095-B for the 2016 calendar year were required to be furnished to individuals by January 31, 2017. These forms must also be filed with the IRS (along with the applicable transmittal statement) by February 28, 2017 (if filed on paper) or March 31, 2017 (if filed electronically).

On November 18, 2016, the IRS issued IRS Notice 2016-70. Notice 2016-70 extended the date that Forms 1095-C and 1095-B must be furnished to individuals to March 2, 2017. The IRS did not extend the deadlines by which these forms must be filed with the IRS. These deadlines remain February 28, 2017 and March 31, 2017, depending on whether or not the forms are filed electronically. (Organizations may, however, request individual extensions to file these forms with the IRS.)

Good-Faith Reporting Relief
The IRS may impose penalties of up to $260 per form for failing to furnish an accurate Form 1095-C or 1095-B to an individual and $260 per form for failing to file an accurate Form 1095-C or 1095-B with the IRS. For reporting in the 2015 calendar year, the IRS indicated that it would not impose these penalties for incomplete or inaccurate forms, if the employer could show that it “made good-faith efforts to comply with the information reporting requirements.” (This good-faith reporting relief did not apply to forms that were untimely furnished to individuals or filed with the IRS.)