IRS Extends Deadlines for ACA Reporting
January 20, 2016
By Susan Bahme Blumenfeld
The IRS recently extended two Affordable Care Act (ACA) deadlines for employers and other providers of health coverage to report minimum essential coverage and for employers to report offers of health coverage to full-time employees.
The ACA requires providers of “minimum essential coverage” under that law to report such coverage to both the IRS and the individuals receiving the coverage. Providers subject to this requirement include insurers, employers who offer self-insured coverage and multiemployer health and welfare funds. The reporting obligation is significant because individuals with minimum essential coverage are not liable for the “individual shared responsibility payment” under the ACA, also called the “individual mandate” or “individual penalty.”
The ACA also requires “applicable large employers” (meaning, employers with 50 or more full-time employees, including full-time equivalents, in the prior calendar year) to furnish reports to their full-time employees disclosing the health coverage offered (or not offered) by them to their full-time employees, and to provide these reports to the IRS. These reports are used to determine whether employers owe penalties under the “employer shared responsibility provisions” of the ACA for failing to offer health coverage to their employees, and also to determine an individual’s eligibility for premium tax credits for coverage purchased in the health insurance marketplace.
Both of these ACA reporting obligations were optional for coverage in 2014 but now are mandatory for 2015 coverage.
In Notice 2016-4, the IRS granted two extensions of time for reporting 2015 health coverage and employer offers of coverage: (1) a two-month extension for furnishing information reports to individuals and employees; and (2) a three-month extension for filing these reports with the IRS.
- For providers of minimum essential coverage, the information report must now be furnished to covered individuals by March 31, 2016. A multiemployer fund that provides self-insured coverage must use IRS Form 1095-B to report the coverage to the individuals. (For insured coverage, the health insurance issuer has the reporting obligation.) The multiemployer fund must file all information returns with the IRS (using IRS Transmittal Form 1094-B) by May 31, 2016 (or June 30, 2016, if filing electronically).
- For an applicable large employer (including a union that meets this definition), the information report now must be furnished to its full-time employees by March 31, 2016 using IRS Form 1095-C. All reports must be filed with the IRS, using IRS Transmittal Form 1094-C, by May 31, 2016 (or June 30, 2016, if filing electronically).
Notwithstanding the two extensions, the IRS has stated that it will accept the 2015 reports starting in January 2016. The IRS also has encouraged employers and other providers of minimum essential health coverage to furnish the forms to individuals and file them with the IRS as soon as they are ready, especially since these forms include important information for individuals’ tax returns.
If you have any questions regarding the recent IRS extension or any other reporting obligations under the ACA, please contact the Employee Benefits attorneys at Willig, Williams & Davidson at (215) 656-3600.