IRS Extends Affordable Care Act Reporting Deadlines

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Diane Juffras

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Good news for employers scrambling to prepare their first set of Affordable Care Act-required health coverage information returns in time for the IRS’s deadlines! The February 1st deadline for giving information to employees and the February 28th and March 31st deadline for reporting to the IRS have been extended by two months. 

Background

The Affordable Care Act requires virtually all individuals to secure health insurance or pay a penalty. That is what is known as the “individual mandate.” The ACA also requires employers with 50 or more full-time employees to offer health insurance to those employees who work an average of 30 hours or more per week or pay a penalty. That is what is known as the “employer mandate.” In order to impose the penalty on individuals and employers who do not comply with these mandates, the IRS requires that individuals report coverage on their tax returns and that employers give information about offers of coverage to their employees (for use in preparing their tax return) and report offer of coverage to the IRS.

Employers with 50 or more employees who offer their employees health coverage through a fully-insured plan (that is, a plan offered under an insurance contract with an insurance company) must complete Parts I and II of IRS Form 1095-C for each employee offered coverage. The employer must file each of those Forms 1095-C (together with Form 1094-C, a summary transmittal sheet) with the IRS. Employees will also receive an information detailing their coverage (Form 1095-B) from the insurance company.

Employers with 50 or more employees who offer their employees health coverage through a self-insured plan (that is, a plan under which the employer is using its own funds to provide health benefits to its employees, although it may use a health insurance company to administer the plan) must complete Parts I, II and III of Form 1095-C for each employee offered coverage. The employer must file each of those Forms 1095-C (together with Form 1094-C, a summary transmittal sheet) with the IRS.

The original deadline for giving Form 1095-C to employees was February 1, 2016. The original deadline for filing Form 1094-C and Forms 1095-C with the IRS was February 28, 2016, for employers filing hard copies and March 31, 2016, for employers filing electronically.

Employers with fewer than 50 employees are not covered by the ACA’s employer mandate. But many such employers offer health insurance coverage anyhow. Employers with fewer than 50 employees who offer coverage through a fully-insured plan do not have to file information returns of any kind. After all, the purpose of Forms 1094-C and 1095-C reporting is to assist the IRS in administering the employer mandate, and smaller employers are exempt. The insurance company will give to their employees and file with the IRS the information the IRS needs to administer the individual mandate.

Employers with fewer than 50 employees who offer coverage through a self-insured plan, however, do have ACA reporting obligations (small employers who are insured through the League of Municipalities Municipal Insurance Trust are considered self-insured for ACA reporting purposes). As self-insured organizations they stand in the shoes of an insurance company and must report the information required by the individual mandate. Self-insured small employers must give Form 1095-B to each employee who is covered under their plan and must file all of the Forms 1095-B (together with Form 1094-B, a summary transmittal sheet) with the IRS.

The original deadlines for Forms 1094-B and 1095-B were the same as those for Forms 1094-C and 1095-C, the employer mandate reporting forms.

The Extensions of the Filing Deadlines

In Notice 2016-4, published on December 28, 2015, the Internal Revenue Service extended by two months the deadlines by which covered employers must file Forms 1094-C and 1095-C and self-insured employers not covered by the employer mandate must file Forms 1094-B and 1095-B. This extension applies only to 2016 filings for the 2015 calendar year. Next year, employers will be held to the original filing deadlines.

The new deadlines are as follows:

For Information Returns Sent to Employees

  • Form 1095-C (reporting offers of health coverage by employers with 50 or more employees, including self-insured employers) must be given to employees by March 31, 2016.
  • Form 1095-B (reporting offers of health coverage by self-insured employers with fewer than 50 employees) must be given to employees by March 31, 2016.

For Information Returns Filed with the IRS as Hard Copies

  • Transmittal Form 1094-C and accompanying Forms 1095-C must be filed with the IRS by May 31, 2016 (employers with 50 or more employees).
  • Transmittal Form 1094-B and accompanying Forms 1095-B must be filed with the IRS by May 31, 2016 (self-insured employers with fewer than 50 employees).

 For Information Returns Filed with the IRS Electronically (remember — employers with 250 or more employees must file electronically)

  • Transmittal Form 1094-C and accompanying Forms 1095-C must be filed with the IRS by June 30, 2016 (employers with 50 or more employees).
  • Transmittal Form 1094-B and accompanying Forms 1095-B must be filed with the IRS by June 30, 2016 (self-insured employers with fewer than 50 employees).

For more information on the Affordable Care Act reporting required of employers, register for the School of Government’s on-demand webinar, Complying with the IRS’s Affordable Care Act Reporting Requirements, here.

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