IRS Grants Extension for Affordable Care Act Reporting
Before ringing in the New Year, the Internal Revenue Service (IRS) sent a belated Christmas present to employers by announcing an extension in the 2016 Affordable Care Act (ACA) reporting requirements. Believing that some employers, insurers and other providers of insurance coverage need additional time to adapt, the IRS issued Notice 2016-4 on December 28th moving reporting deadlines back a couple of months.
The Affordable Care Act requires health insurance issuers, self-insuring employers, government programs and other providers to provide Form 1095-B to employees verifying that they have minimum essential coverage that complies with the individual responsibility requirement. Form 1095-C must be provided by large employers with 50 or more full-time or full-time equivalent employees. Form 1095-Cs are also important in establishing employee eligibility for premium tax credits when individuals are not offered affordable minimum value coverage by their employers.
Additionally, transmittal Forms 1094-B and 1094-C must be used to report the individual 1095-Bs and 1095-Cs to the IRS.
These reports were originally scheduled to be filed in early 2015 for the 2014 reporting year, but were delayed a year.
The due date for providing 2015 Forms 1095-B and 1095-C has been moved from February 1, 2016 to March 31, 2016. The due date for filing 2015 Forms 1094-B and 1094-C with the IRS has been delayed from February 29, 2016 to May 31, 2016 for non-electric filers and from March 31, 2016 to June 30, 2016 for electronic filers.
Employers and other coverage providers who miss the extended deadlines are subject to IRS penalties, but the IRS will consider whether reasonable efforts were made to comply and whether steps are being taken to ensure future compliance.
The change in the due date may result in some employees receiving their forms after the April 18, 2016 tax filing deadline. If that is the case, these employees will not need to file an amended tax return. They should, however, keep their forms on file should they need them later.
It should also be noted that these extensions for the calendar year 2015 have no effect on reporting provisions for other years or on the effective date of other ACA provisions.