The Affordable Care Act (ACA) reporting under Internal Revenue Code (Code) Section 6055 and Section 6056 for the 2021 calendar year is due in early 2022. Specifically, reporting entities must:

• Furnish statements to individuals by January 31, 2022 (automatic extension to March 2, 2022); and
• File returns with the IRS by February 28, 2022 (or March 31, 2022, if filing electronically).

A proposed rule issued on November 22, 2021 would permanently extend the annual furnishing deadlines to individuals under both Code Sections 6055 and 6056 for an additional 30 days (to March 2). However, this rule is in proposed form and has not yet been finalized. In either case, reporting entities are generally encouraged to furnish statements to individuals as soon as they are able.

The proposed rule would also provide an alternative method for furnishing statements to individuals under Code Section 6055. Under this alternative manner of furnishing, the reporting entity must post a clear and conspicuous notice on its website stating that responsible individuals may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request may be sent and a telephone number to contact the reporting entity with any questions. Reporting entities must generally retain the website notice until October 15 of the year following the calendar year to which the statement relates. However, applicable large employers (ALEs) may not use the alternative method of furnishing for full-time employees who are enrolled in a self-insured plan.

Keep in mind that nothing has changed with respect to filings required to be made to the IRS. Furthermore, several states, including Massachusetts, California, New Jersey and Rhode Island, in addition to the District of Columbia, have their own furnishing and filing requirements to comply with their respective state individual mandates. Thus, the extension and proposed permanent extension, as well as the alternative method for furnishing statements, may not be applicable in those situations.

The proposed rule also eliminates the good-faith transition relief from penalties that have been available for reporting entities that could show that they made good faith efforts to comply with information reporting requirements. This means that relief from penalties under Code Sections 6721 and 6722 for the reporting of incorrect or incomplete information on information returns or statements is not available for reporting for the tax year 2021 and subsequent years. However, the IRS noted in the proposed regulations that the reasonable cause exception under Code Section 6724 already provides adequate relief from penalties under Code Sections 6721 and 6722 for filers who have reasonable cause for failing to timely or accurately complete their reporting requirements. Either way, filers should be extra diligent in preparing their information forms for 2021 and beyond.

The Proposed Regulations are available here. The Final IRS Instructions for the completion of Forms 1094-C and 1095-C are here.

ADDITIONAL INFORMATION

Please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.

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.