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IRS Announces Limited Filing Extension for 2017 ACA Reporting

As you know, the Affordable Care Act (ACA) requires health insurers, self-insured employers, government agencies, and other providers of minimum essential coverage to furnish annual informational statements to individuals whom they cover, as well as annual informational returns to the IRS. This is furnished through the preparation of Forms 1094-B and 1095-B. If you are fully insured, you receive these forms from your insurance company.

The ACA also requires applicable large employers (those with 50 or more full-time equivalent employees) and small employers who are self-insured to file a return and furnish statements to their full-time employees as to the coverage, if any, that they offer to full-time employees. This is furnished through the preparation of Forms 1094-C and 1095-C.  

Penalties exist for failure to timely file, or failure to file at all, any of these applicable forms. 

Recently the IRS in Notice 2018-06 announced a 30-day automatic extension for the furnishing of 2017 IRS Forms 1095-B (Health Coverage) and 1095-C (Employer-Provided Health Insurance Offer and Coverage), from January 31, 2018 to March 2, 2018 to employees.  This extension is similar to the extension provided by the IRS last year and this is the third straight year some type of extension was granted. There is no additional extension granted beyond March 2, 2018 for providing these disclosures.   

It is imperative to note that Notice 2018-06 does not extend the due date for employers, insurers, and other providers of minimum essential coverage to file 2017 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS.  The filing due date for these forms remains February 28, 2018 (April 2, 2018, if filing electronically).  Thirty day and hardship extensions for filing remain available as permitted for these forms under the regulations.

Other relevant aspects of this IRS Notice 2018-06 include: 

  • The “good faith” reporting standards will apply once again for 2017 reporting. This means that reporting entities will not be subject to reporting penalties for incorrect or incomplete information if they can show that they have made good faith or reasonable efforts to comply with the 1094 and 1095 information-reporting requirements. Similar to prior years, no relief is provided where there has not been a good faith effort to comply with the reporting requirements or where there has been a failure to file or furnish reports by the applicable due date. 
  • Individual taxpayers may once again may rely on other information received from the employer or coverage provider for purposes of filing an individual tax return. Thus, there is no need to submit a copy of the Form 1095 with a tax return.
  • The IRS reiterated that, while failure to furnish and file these forms on a timely basis may subject employers and other coverage providers to penalties, entities should still attempt to furnish and file even after the applicable due date. The IRS has stated repeatedly that it will take such action into consideration when determining whether to abate penalties.

In Notice 2018-06 the IRS also stated that it does not anticipate granting this transition relief for 2018 or future years.   Ironically, they stated this same position the past two years before subsequently granting extensions so who knows what will happen this time next year.

Obviously, the best approach would be to complete, file and furnish your applicable reporting forms as soon as practicable in 2018.  Pushing up to the deadlines can easily result in late filings and result in unnecessary penalties.

See how BarFly Ventures went from fully insured to self-funded to gain more control of their employee benefits program:

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Topics: HR / Employee Benefits