Late in 2022, the IRS released final regulations addressing extended deadlines for certain information-reporting requirements of the Affordable Care Act (ACA). The final regs generally apply to calendar years beginning after December 31, 2021.
If your organization is an applicable large employer (ALE) under the ACA, or could be in the immediate years ahead, now’s a good time to review the recently finalized rules.
Required forms
To report health insurance coverage information in accordance with Internal Revenue Code Section 6055, minimum essential coverage providers (insurers, government-sponsored programs and some self-insuring employers) must file Forms 1094-B and 1095-B with the IRS and provide the information to employees. Likewise, under Sec. 6056, ALEs need to file Forms 1094-C with the IRS and send Forms 1095-C to employees to provide information that the IRS needs to administer employer shared responsibility penalties and determine eligibility for premium tax credits.
Whether an employer can be defined as an ALE is determined in any given year by its number of employees in the previous year. Generally, if your organization has 50 or more full-time or full-time equivalent employees on average during the previous year, you’ll be considered an ALE for the current calendar year. A full-time employee is an individual who provides, on average, at least 30 hours of service per week.
Deadline for furnishing statements
The final regs permanently extend the deadline for furnishing a given year’s Forms 1095-B and 1095-C to individuals until 30 days after January 31 of the immediately following year. If the 30th day falls on a Saturday, Sunday or legal holiday, the deadline moves to the next business day. The extension replaces the 30-day extension that could be requested for good cause and the IRS’s ability to provide blanket automatic extensions.
Because the individual shared responsibility payment was reduced to zero, the final regs also provide an alternative to automatically furnishing statements in certain situations. A reporting entity is treated as having timely furnished Form 1095-B to an individual so long as:
- A “clear and conspicuous” notice with information about how the individual can request the form is prominently posted on the reporting entity’s website, and
- A Form 1095-B is furnished within 30 days after the individual’s request is received.
The notice must be posted by the deadline for furnishing statements and remain in the same location on the website until October 15 of the year following the calendar year to which the statement relates. Similar relief is available to ALEs with respect to furnishing Forms 1095-C to non–full-time employees and non-employees enrolled in the ALE’s self-insured health plan, but not for furnishing statements to full-time employees. This relief doesn’t apply to reporting information to the IRS.
Penalty relief eliminated
ALEs should take their information-reporting responsibilities seriously. The transitional good faith relief from penalties for reporting incorrect or incomplete information on returns or statements isn’t available for tax year 2021 or subsequent tax years. Contact us for help navigating the tax and information-reporting rules of offering health care coverage.