The IRS Grants a Short Reprieve to ACA Reporting Deadlines
Just before Christmas the IRS published Notice 2018-06, announcing an extension of the impending January distribution due dates of IRS Forms 1095-B and 1095-C required under the Affordable Care Act (ACA). This is certainly welcome relief for insurers and employers gearing up to navigate another year of complex ACA reporting obligations.
What is the impact of Notice 2018-06?
Current IRS regulations are as follows:
- January 31, 2018: Distribution deadline for Forms 1095-B and 1095-C
- February 28, 2018: IRS paper filings due
- April 2, 2018: IRS electronic filings due
Notice 2018-06 extends the deadline to distribute Forms 1095-B and 1095-C to employees and insured members until March 2, 2018.
However, it is important to note the deadlines to file these forms with the IRS is not extended. IRS filing deadlines remain February 28, 2018 (paper submission) and April 2, 2018 (electronic submission). The IRS is encouraging those who are ready to file to do so as soon as possible.
What is “Information Reporting” under the ACA?
As a refresher, all “Applicable Large Employers” (those with 50+ full time equivalent employees) must report on IRS Form 1095-C whether they offered affordable, minimum value health coverage to full-time employees and their dependents for at least one month during 2017. This includes employers who provide coverage through an insured group health policy.
In addition, any employer (regardless of size) sponsoring a self-funded medical plan must report on Form 1095-C all employees and their dependents who enroll under the plan (including part-time employees, directors, and COBRA participants).
Form 1095-C is distributed to employees similar to Form W-2 and is then filed with the IRS along with a transmittal form, 1094-C. Insurance companies are also obligated to distribute IRS Form 1095-B to all insured members and then file Forms 1094-B and 1095-C with the IRS.
This complex reporting structure serves two purposes:
- The 1095-B and 1095-C forms that employees and insured members receive provide documentation of compliance with the Individual Mandate.
- The IRS filing by employers provides documentation of compliance with the Employer Mandate in order to avoid ACA tax penalties.
What are recommended next steps?
Although the extension of these deadlines allows more time to gather data and revisit reporting systems and processes, employers should continue to prepare without delay. For assistance with this process, please refer to our recent Compliance Alert, and contact your FirstPerson account team with any questions.