November 30, 2018
The IRS has released Notice 2018-94, extending the due date for insurers, self-insured employers, other providers of minimum essential coverage and employers with 50 or more full-time equivalent employees (Applicable Large Employer, or ALE) to provide Form 1095-B ("Health Coverage") and/or Form 1095-C ("Employer Provided Health Insurance Offer and Coverage") to applicable individuals, from January 31, 2019 to March 4, 2019.
In addition, the IRS also extended good-faith transition relief from penalties under Code Sections 6721 and 6722 to the 2018 information reporting requirements under Code Sections 6055 and 6056.
The extension is automatic. Employers and providers do not have to request it. However, Notice 2018-94 does not extend the due date for filing forms with the IRS for 2018. The due date for filing with the IRS under Sections 6055 and 6056 remains February 28, 2019 (April 1, 2019, if filing electronically).
Under Code Section 6055, health insurance issuers, self-insuring employers, government agencies, and other providers of minimum essential coverage, are required to file an annual return with the IRS reporting information for each individual that is provided with this coverage to substantiate their compliance with the individual mandate provision under the Affordable Care Act (ACA). Related statements must also be provided to these individuals. The mechanism used for fulfilling the reporting and disclosure requirements under Code Section 6055 is Form 1095-B.
Under Code Section 6056, most ALEs are required to report information to the IRS and provide statements to its full-time employees regarding the employer-sponsored health coverage they were offered. The IRS will use the information that ALEs report to verify employer-sponsored coverage and to administer the ACA's employer shared responsibility provisions. The mechanism that is used for fulfilling the reporting and disclosure requirements under Code Section 6056 is Form 1095-C.
To simplify the reporting process, the IRS permits ALEs with self-insured plans to use a single combined form for reporting the information required under both Code Sections 6055 and 6056.
Written statements must be provided to employees no later than January 31 of the year following the calendar year in which coverage was provided. Thus, Notice 2018-94 extends the deadline to furnish the 2018 statements from January 31, 2019 to March 4, 2019.
Returns must be filed with the IRS by February 28 (or by March 31, if filed electronically) of the year after the calendar year to which the returns relate. This means that the returns for the 2018 information year are due to the IRS on or before February 28, 2019, or by April 1, 2019, if filed electronically (March 31, 2019 falls on a Sunday). The IRS has not extended these deadlines.
Employers and other coverage providers that do not comply with the March 4, 2019 extended due date for furnishing Forms 1095-B and 1095-C, or who fail to comply with the related IRS reporting requirements are subject to penalties for either failing to file correct information returns (under Code Section 6721) and/or failing to furnish correct payee statements (under Code Section 6722).
Notice 2018-94 extends transition relief from these penalties to the 2018 reporting year as long as the reporting entity can show that they made a good faith effort to comply with Code Sections 6055 and 6056, both for furnishing statements to individuals and for filing with the IRS. The relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other required information. It does not apply to reporting entities that do not make a good-faith effort to comply with the regulations, or fail to file an information return or furnish a statement by the due dates (as extended). In determining good faith, the IRS will take into account whether the employer or other reporting entity made reasonable efforts to prepare for reporting and furnishing the required information. The IRS will also take into account the extent to which steps are being taken to ensure compliance for 2019.
In addition, taxpayers will not need to receive a Form 1095-B and/or Form 1095-C in order to file their 2018 individual tax returns. Instead they may rely on other information received from their employer or other coverage provider to substantiate they were eligible for a premium tax credit in the marketplace or had minimum essential coverage.
The IRS is encouraging reporting entities to furnish statements as soon as they are able. No request or other documentation is required to take advantage of the extended deadline.
For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:
Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.