Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance, while applicable large employers (ALEs) are required to offer health benefits to their full-time employees. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers will be required to report on the health coverage they offer. Final instructions for both the1094-B and 1095-B and the 1094-C and 1095-C were released in September 2015, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C.
Reporting will first be due in 2016, based on coverage in 2015. All reporting will be for the calendar year, even for non-calendar year plans. On December 28, 2015, the IRS issued Notice 2016-4, delaying the reporting deadlines.
The reporting requirements are in Sections 6055 and 6056 of the ACA. The 1094-C, 1095-C, 1094-B, and 1095-B were originally due to the IRS by February 28 if filing on paper (February 29, in 2016, because February 28 falls on the weekend), or March 31 if filing electronically. The 1095-C form was due to employees by January 31 of the year following the year to which the Form 1095-C relates (February 1, in 2016, because January 31 falls on a weekend). The 1095-B was due to the individual identified as the “responsible individual” on the form by January 31 (February 1, in 2016, because January 31 falls on a weekend).
The transition relief provided by Notice 2016-4 extended the due date for furnishing Form 1095-B and 1095-C to individuals to March 31, 2016. The due date for filing all forms (1094-C, 1095-C, 1094-B, and 1095-B) to the IRS is moved from February 29, 2016, to May 31, 2016, if filing by paper. If filing electronically, the date is moved to June 30, 2016.
Employers that have difficulty meeting the extended reporting deadlines are encouraged to file late, as the IRS will take late filing into consideration when determining whether to reduce penalties for reasonable causes. The IRS will also take into account if an employer made reasonable efforts to prepare for reporting, such as gathering or transmitting necessary information to a reporting service.
For additional information on how the extension may impact your employees, as well as the extension process, download the UBA ACA Advisor, “IRS Provides Major Delay in 6055 and 6056 Reporting”.