IRS Extends ACA Deadline for Employers to Furnish Forms to Employees
- On Dec. 22, 2017, the IRS issued a notice extending the deadlines for certain entities to furnish forms 1095-C or 1095-B to employees and covered individuals about the health insurance coverage offered to them.
- The notice also extends good-faith transition relief for the 2017 filing year from penalties for incorrect and incomplete reporting on Forms 1094-B, 1095-B, 1094-C, and 1095-C.
On Dec. 22, 2017, the Internal Revenue Service (IRS) issued a notice extending the deadlines for certain entities to furnish forms 1095-C or 1095-B to employees and covered individuals about the health insurance coverage offered to them. The notice also prolongs good-faith transition relief from penalties for incorrect and incomplete reporting on forms 1094-B, 1095-B, 1094-C, and 1095-C for the 2017 filing year.
In general, applicable large employers (ALEs) are employers that had an average of at least 50 full-time employees, including full-time-equivalents, in the preceding calendar year. Bear in mind that new employers determine their status using their anticipated employee count and look at their current year data as opposed to their lookback.
ALEs must report the health insurance coverage information they offered on a Form 1095-C for each full-time employee. These forms are all filed with a transmittal Form 1094-C. Additionally, ALEs that sponsor self-insured health plans report health coverage information for each individual enrolled on a Form 1095-C. This includes the employee, employee’s family members, and non-employees. They have the option to report health coverage information for non-employees such as retired employees on a Form 1095-B, which are filed with the transmittal Form 1094-B. Non-ALEs that sponsor self-insured health plans report coverage information on 1095-B, not 1095-C.
Here are the key points for employers. The IRS notice:
- Extends the deadline to furnish to individuals the 2017 Forms 1095-B and 1095-C. The due date went from Jan. 31, 2018 to March 2, 2018.
- Does not extend the deadline to file the 2017 Forms 1094-B, 1095-B, 1094-C, and 1095-C. That date remains Feb. 28, 2018, for paper filing and April 2, 2018, for electronic filing.
- Allows filers to still apply for an automatic extension for filing returns using Form 8809.
- Extends the good-faith transition relief that was available in 2015 and 2016 for incorrect and incomplete information reporting to the 2017 filing year. Good-faith transition relief does not apply to entities that don't file their returns on time.
The IRS does not anticipate extending the furnishing deadline or good-faith transition relief to 2018. Keep in mind, employers that do not provide accurate or complete information may be required to respond to IRS notices and correct any errors. The process for responding to IRS 226J letters, which provide preliminary calculations for employer shared responsibility payments (ESRP), are time-consuming and onerous. If 1094/1095-C filings were incorrect, the employer will need to determine the correct filing and complete a lengthy process of resolving any discrepancies with the IRS. Ultimately, it will be easier to complete these forms correctly and completely the first time, rather than to go back and fix mistakes.
Businesses that need help managing due dates and compliance with other employer shared responsibility provisions of the Affordable Care Act can turn to Paychex.