IRS Extends Deadlines for Employers to Furnish and File 2015 ACA Information Returns
The IRS has announced an extension of the deadlines for applicable large employers (i.e. employers with 50 or more full-time employees, including full-time equivalents) to furnish and file 2015 information returns required by the Affordable Care Act (the “ACA”). Under the notice, the deadline for an applicable large employer to provide IRS Form 1095-C (“Employer-Provided Health Insurance Offer and Coverage”) to its employees is extended from February 1, 2016 to March 31, 2016. The deadline to file these returns with the IRS is extended from March 31, 2016 to June 30, 2016 for employers filing electronically, and from February 29, 2016 to May 31, 2016 for employers filing on paper. IRS Notice 2016-4.
The IRS has similarly extended the deadlines to furnish and file ACA information for providers of health coverage (i.e. insurance companies and self-insured plans) using IRS form 1095-B (“Health Coverage”).
Background. The ACA imposes on applicable large employers the obligation to furnish certain information to individuals who were full-time employees in the prior year relating to the offer of health coverage, if any, that the employer made to the employee in that year. The ACA also requires the applicable large employer to report that information to the IRS. The ACA also requires providers of coverage, such as insurance companies and self-insured health plans, to furnish and file reports of coverage actually in place during the prior year. The IRS uses the information contained on these returns to administer various provisions of the ACA, including the premium assistance tax credit, the individual shared responsibility payment and the employer shared responsibility payment. The IRS has released forms 1095-C (“Employer-Provided Health Insurance Offer and Coverage”) and 1095-B (“Health Coverage”) to implement these reporting requirements.
The ACA categorizes these forms as “information returns,” similar to IRS forms W-2 and 1099. Accordingly, employers and health coverage providers that do not timely furnish these returns to the individual or file them with the IRS are subject to information return penalties. The penalty for failing to furnish form 1095-B or 1095-C to the individual recipient is $30 per return if corrected within 30 days after the due date, and $100 per return if not corrected within 30 days. Higher penalties ($250 per return) apply if the IRS determines that the failure to furnish the information return is due to intentional disregard of the of the obligation to furnish the information return. Identical penalties apply to late filing of the information returns with the IRS.
Other Information. The IRS Notice provides that the IRS is prepared to accept filings of the ACA information returns beginning in January 2016. The IRS Notice encourages employers and providers of coverage to furnish and file their ACA information returns as soon as the returns are ready, notwithstanding the extensions to the deadlines provided in the Notice.
Further Extensions of Time. The IRS announcement does not mention currently available extensions of time to furnish and file the ACA information returns. Under IRS regulations in existence prior to the IRS Notice, an employer or health coverage provider may apply to the IRS for an automatic 30-day extension of time to file the ACA information returns. Employers and coverage providers cannot obtain an automatic extension of time to furnish information returns to individual recipients. However, employers and health coverage providers may request a 30-day extension by application to the IRS explaining the reason the extension is required. It appears that the IRS Notice does not affect these extensions.
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