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Due Date Extension for Furnishing Forms 1095 and Related Relief

In a move that caught many in the benefits community by surprise, the IRS issued Notice 2016-70 on Nov. 18, giving employers subject to the Affordable Care Act's (ACA's) 2016 information-reporting requirements up to an additional 30 days to deliver these forms to employees. To view Notice 2016-70 please click here https://www.irs.gov/pub/irs-drop/n-16-70.pdf

The relief applies to: Applicable Large Employers required to furnish employees with information and file information with the IRS under the Internal Revenue Code (Code) Section 6056 reporting requirements; health insurers; employers that sponsor self-insured health plans; and other providers of Minimum Essential Coverage that are required to furnish individuals with information and file information with the IRS under Code Section 6055 reporting requirements.

This extension was made in response to requests by employers, insurers, and other providers of health insurance coverage that additional time be provided to gather and analyze the information required to complete the Forms. Notwithstanding the extension, the IRS encourages employers and other coverage providers to furnish the Forms as soon as possible.

The notice affects upcoming deadlines for ACA information reporting as follows:

  • The IRS extended the deadline to deliver ACA reporting forms to employees from Jan. 31, 2017 to March 2. The extended deadline applies to furnishing to individuals the 2016 Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) and Form 1095-B (Health Coverage). 

    The Treasury Department and the IRS determined that a substantial number of employers and other insurance providers needed additional time "to gather and analyze the information [necessary to] prepare the 2016 Forms 1095-C and 1095-B to be furnished to individuals," Notice 2016-70 states.
  • This extension applies for tax year 2016 only, and does not require the submission of any request or other documentation to the IRS.
  • The IRS did not change the deadline for filing Forms 1094 and 1095 with the agency.This means there is likely to be no automatic extension to file the 2016 Form 1094-B (Transmittal of Health Coverage Information Returns) along with copies of Form 1095-B, and Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) along with copies of Form 1095-C.

    Employers filing these forms by mail will still need to do so by Feb. 28, 2017. Employers filing electronically (as those submitting 250 or more forms are required to do) must do so by March 31. While the date for filing with the IRS was not extended, employers can obtain a 30-day extension by submitting Form 8809 (Application for Extension of Time to File Information Returns) by the due date for the ACA information returns.

Action Needed by Employer

Previous IRS Due Date

New IRS Due Date

Deadline to distribute ACA reporting forms to employees and covered individuals

January 31, 2017

March 2, 2017

Deadline to file ACA reporting forms with the IRS

February 28, 2017 (paper)

March 31, 2017 (electronic)

No change

Again, Notice 2016-70 does not extend the due date for employers, insurers, and other providers of minimum essential coverage to file 2016 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS. The filing due date for these forms remains February 28, 2017 (March 31, 2017, if filing electronically), unless the due dates are extended pursuant to other available relief.

GOOD-FAITH RELIEF FOR ERRORS – Employers and Individual Taxpayers

Additionally, Notice 2016-70 provides that good faith reporting standards will apply for 2016 reporting. This means that reporting entities will not be subject to reporting penalties for incorrect or incomplete information if they can show that they have made good faith efforts to comply with the 2016 Form 1094 and 1095 information-reporting requirements.

No relief was available to employers who did not timely file the forms at all, so coverage providers and employers should continue to work toward meeting these filing deadlines. Notice 2016-70 extends that good-faith relief to the 2016 reporting year. The notice clarified that the relief includes "missing and inaccurate taxpayer identification numbers and dates of birth," and other required return information.

In order to determine good faith, the IRS will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information and furnishing it to employees and other covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission, or testing its ability to transmit information to the IRS. In addition, the IRS will take into account the extent to which the employer or another coverage provider is taking steps to ensure that it is able to comply with the reporting requirements for 2017.

The Notice also provides guidance and relief to individual taxpayers who might not receive a Form 1095-B or Form 1095-C, as applicable, by the time they file their 2016 tax returns. Notice 2016-70 states that taxpayers may rely on other information received from their employer or other coverage provider for purposes of filing their returns, including determining eligibility for the premium tax credit under Section 36B, and confirming that they had Minimum Essential Coverage.

Thus, individual taxpayers should not wait to receive Forms 1095-B and 1095-C before filing their returns. If employers take advantage of the extension in Notice 2016-70 and receive employee requests for 2016 Forms 1095-C before the extended due date, they should refer their employees to the guidance in Notice 2016-70.

ACA Reporting is Still Required

Applicable large employers—those with 50 or more full-time or equivalent employees—are subject to the ACA's employer mandate and its related tracking and reporting requirements.

During his campaign, President-elect Donald Trump had made repealing and replacing the ACA a top priority, although the extent to which his administration and the GOP Congress can accomplish that goal is subject to debate based on some of his recent comments.

And while even short of full repeal the employer mandate is seen as a likely, early, target, "the ACA is still the law of the land," said Scott Behrens, an ERISA compliance attorney at Lockton Companies, a benefits brokerage based in Kansas City, Mo. "Prudent employers will want to continue to comply with the ACA, including the play-or-pay mandate and reporting requirements until formal guidance relieves them of those compliance obligations."

Small employers with fewer than 50 full-time employees are exempt from some, but not all, of the ACA's reporting requirements. For example, those with a self-insured health plan must complete and file Forms 1095-B and 1094-B with the IRS, as well as provide employees with a copy of Form 1095-B. Small employers also are required to file Forms 1095-C and 1094-C if they are members of a controlled or affiliated service group that collectively has at least 50 full-time employees.

For additional information about the extension and completing the IRS forms, please contact your Poms & Associates broker, or send your question and contact information to us through “Ask Poms.”

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