Last month, we discussed an overview of the coverage requirements and penalties under the Affordable Care Act (ACA). Generally, ACA reporting requires applicable large employers (ALEs) and small employers of self-insured medical plans to report coverage offered to full-time employees using Forms 1094 and 1095. The deadlines for furnishing these forms are set annually but are often extended to grant employers as much time as possible to gather the appropriate information.
As has been done previously, the IRS extended the deadline to furnish the ACA reporting forms to employees and covered individuals. The deadline to file with the IRS, however, was not extended.
This week, the Internal Revenue Service (IRS) and Department of the Treasury announced transition relief relating to the reporting requirements for the 2019 tax year. This transition relief applies only to the 2019 reporting year; it does not extend to previous years.
Transition relief expanded.
The transition relief extends the due date for furnishing Forms 1095-B and 1095-C to employees from Jan. 31, 2020 to March 2, 2020. All forms must be furnished to employees by March. An additional 30-day extension will not be granted.
Please note: the transition relief does not extend the due date for filing applicable Forms 1094-B, 1095-B, 1094-C or 1095-C to the IRS.
Individual mandate penalty reduction.
To account for the reduction of the individual mandate penalty to zero, the Department and IRS are extending relief from the penalty for failing to furnish a Form 1095-B to individuals if the following conditions are met:
- The employer posts a notice prominently on its website stating that individuals may receive a copy of their Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that individuals can use to contact the employer with questions.
- The employer furnishes a Form 1095-B to any individual within 30 days of the date the request is received.
Please note: this second transition relief applies only to Forms 1095-B and does not provide relief from penalties for ALEs who fail to furnish Forms 1095-C to full-time employees.
Last, the Department and IRS are extending relief from penalties for incorrect or incomplete forms to taxpayers who can show that they made good faith efforts to comply with the reporting requirements.
How PrimePay can ensure compliance.
At PrimePay, we are committed to making your business run more efficiently. That is why we offer free eBooks like our ACA Toolkit and our ACA Compliance Navigator solution. Our ACA Compliance Navigator solution helps with variable hour employees, file and provide IRS Forms 1094/1095, and provides penalty exposure warnings, checklists and more. Sign up today!
Disclaimer: Please note that this is not all-inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.