A provision of the Patient Protection and Affordable Care Act (“Health Care Reform”) requires that all providers of Minimum Essential Coverage (MEC) and Applicable Large Employers (ALEs) provide reporting to individuals as well as the IRS showing when health coverage was in place. The “Tax Cuts and Jobs Act” eliminates the individual mandate penalty effective with plan years after 12/31/18, however, ACA reporting continues to be required.
6055 Reporting applies to providers of MEC. Providers should provide coverage information to participants on Form 1095-B and should provide coverage information to the IRS using Form 1094-B. 6056 Reporting applies to ALEs. ALEs should provide coverage information to participants on Form 1095-C and should provide coverage information to the IRS using Form 1094-C.
IRS Extends Deadline for 2019 Forms 1095-B and 1095-C and Issues “Good Faith” Reporting Relief
The IRS recently released Notice 2019-63 which provides an extension of up to 30-days for ALEs to distribute the 2019 Affordable Care Act (ACA) reporting forms to employees and covered individuals. These Forms must now be provided to individuals by March 2, 2020, instead of January 31, 2020 and the IRS also confirms that additional 30-day extensions will not be granted. The IRS encourages employers and other coverage providers to furnish the Forms “as soon as they are able,” but can use the automatic extension if necessary by submitting Form 8809, Application for Extension of Time to File Information Returns. The extension is automatic; employers and other coverage providers need not apply for or specifically request it.
This notice also extends good faith transition relief from section 6721 and 6722 penalties to the 2018 information reporting requirements under sections 6055 and 6056. As in the prior filing periods, this notice confirms that this relief applies to missing and inaccurate information (i.e. taxpayer identification numbers, dates of birth, and other required information) required on the forms. No relief is provided where there has not been a good faith effort to comply with the reporting requirements, or where there has been a failure to file an information return or furnish a statement by the applicable due date.
Penalties waived for Failure to Provide From 1095-B if Two Conditions are Met
Due to the individual shared responsibility payment having been reduced to zero for months beginning after December 31, 2018, individuals no longer need the information on Form 1095-B. As a result, the Treasury Department and the Internal Revenue Service have determined that for 2019, relief is available from the penalty under section 6722 for failure to furnish Form 1095-B if two conditions are met.
- The reporting entity posts a notice prominently on their website stating that responsible entities may receive a copy of their 2019 Form 1095-B upon request.
- The reporting entity provides the 2019 Form 1095-B within 30 days of a request.
This relief does not extend to ALEs required to provide a 1095-C.
How does this impact individuals filing their income tax returns?
The extension to provide Forms 1095-B and 1095-C to covered individuals may mean that some people will not receive their Forms 1095-B or 1095-C by the time they are ready to file their 2019 income tax return. In addition, individuals covered by MEC plans may not receive a 1095-B unless they expressly request this. Although the information contained on Forms 1095-B and 1095-C may be used by individuals to confirm that they had “minimum essential coverage” and to determine eligibility for a premium tax credit, the Forms are not required in order to file an individual income tax return. Consequently, taxpayers wanting to file returns early in the year may have to refer to other information about their health coverage for 2019 when completing their return.
What is not extended?
This extended deadline applies only to distributing the 2019 ACA reporting forms to employees and covered individuals and not to the deadline for filing the forms with the IRS. Notice 2019-63 does not extend the deadlines for ALEs to file the 2019 ACA reporting forms with the IRS. ALEs filing less than 250 returns may file in paper. The deadline for paper filing is February 28, 2020. ALEs filing 250 or more returns must file electronically through the IRS's AIR system. The deadline for electronic filing is March 31, 2020.
Reminder: For fully-insured group health plans, the insurance carrier is responsible for furnishing the Forms 1095-B to the IRS and employees, and the employer is responsible for furnishing Forms 1095-C to the IRS. For self-funded group health plans, the employer/sponsor is generally responsible for issuing and filing both Forms 1095-B and 1095-C.
Links to 2019 Forms:
Instructions for Forms 1094-B and 1095-B
Instructions for Forms 1094-C and 1095-C